"There is a lot of hand-wringing about the state of Americans' retirement savings, particularly in the wake of large wealth losses during the recent recession," Nichols says. "But the concern is based in part on implausible targets for expenditures in retirement."

Nichols warns of the dangers of saving too much, saying the traditional rule of thumb advocated by many financial planners -- replacing 80% of preretirement income -- is misguided. Instead, Nichols suggests lowering target spending in retirement.

"If one aimed to replace four-fifths of preretirement income in retirement, and saved two-thirds of income for 20 years to hit that target, spending would more than double at the moment of retirement, which is clearly not optimal," Nichols says. "Who wants to double their spending the day they retire?"

Let's say you're 50 years old and you have the money to spend on a trip around the world that you've been meaning to take with your spouse. Should you postpone that trip in order to put more money in your retirement account?

"If you're focusing on replacing a large percentage of your retirement income, and in doing so you make uncomfortable and unnecessary sacrifices now, you could lose out," Nichols says. "You don't want to be saving excessively for a future that may never come."

A 2009 report by the Brookings Institution and University of Wisconsin-Madison found that most Americans are generally saving enough for retirement. This is in stark contrast to discussions in the popular media and in policy circles that Americans are doing a poor job preparing for retirement.

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