"Americans are not necessarily saving too little for retirement, and the traditional rule of thumb that one should aim to replace 80 percent of pre-retirement income is clearly misguided," Nichols writes. "Instead, one should aim to save enough so that spending does not need to drop precipitously in retirement."

Why might 80 percent be too high? Nichols says the traditional figure may be more misleading for older savers who, in the shorter run-up to their target retirement date, would have to begin a more aggressive savings pattern to get to that level of income replacement. They don't realize they're putting away too much and aren't focusing on leveling out their spending before and after retirement.

Nichols explains, "If one aimed to replace four-fifths of pre-retirement income in retirement and saved two-thirds of income for 20 years to hit that target, for example, spending would more than double at the moment of retirement, which is clearly not optimal. Who wants to double their spending the day they retire? Target spending in retirement should be lower. Yet advice to pursue this suboptimal oversaving strategy is ubiquitous."

"There is abundant advice about how much to save, much of which urges individuals to aim to replace 80 percent of their preretirement pretax income," Nichols continues. "However, those who wait to save for retirement and follow this rule of thumb would save far too much of their gross income, and many would see their annual resources spike upward when they retire. The constant savings rate required to equalize consumption across the preretirement and postretirement years generally is much lower than the 80 percent rule."

Yes, the recession has left many people approaching retirement with far less than they had anticipated and so they'll need to work longer to make up for it. And yes, Social Security benefits will almost certainly be lower in the future for workers. But, "it would be a mistake for current workers to overreact."