Not So Negative Savings

In layman's terms, this means that retirees are generating no income and spending to live. So their expenditures naturally far exceed their nonexistent earnings.

Salisbury adds that the proportion of the population over the age of 65 is currently at 13%. By the time the boomers are all retired, they will comprise 22% of the overall population.

"At that point, you can expect to see a negative savings rate every year," he says.

The same Retirement Research study shows that the amount spent last year by retirees, was enough to offset the amount saved by the working population, meaning people between the ages of 21 and 64, Salisbury says. The Retirement Research Center found that the latter group saved at a rate of roughly 8%.

And while it's true that economists are scratching their heads over the health of the real estate market, Scott Brewster, a certified financial planner and head of Brewster Financial Planning in New York, believes the odds are good that homes will continue to gain in value by the time retirement comes, even if appreciation is no longer skyrocketing.

Moreover, the formula used by the government to calculate the savings rate is an inaccurate reflection of how people save, says Madeline Schnapp, director of macroeconomic research at TrimTabs.

She points out the fact that government economists simply tabulate income, subtract outlays and looks at what's leftover in people's bank accounts. Meanwhile, higher-return savings vehicles including 401(k) plans, stocks, bonds and real estate are not counted as savings.

"No one's just putting their money into a savings account anymore," says Brewster.

"The government numbers are out of date... If you go back 20 years, people couldn't invest in stocks as easily because commissions were so high. Even mutual funds are a relatively new invention," says Brewster.