In January, The New York Times ran a provocative article titled "A Contrarian View: Save Less and Still Retire With Enough." It certainly provoked me enough to read it.

In a nutshell, the piece noted that there are a number of economists out there who have suggested that we're saving more than we need to for retirement. But it also offered some data points that seem to suggest otherwise, such as this: "Fidelity, the nation's largest provider of workplace retirement savings plans, says the average 401(k) account balance is only $62,000."

Imagine that that $62,000 belongs to a 45-year-old who hopes to retire in 20 years. If it grows at 10% per year, it will become nearly $420,000. I have learned in our Rule Your Retirement newsletter that between 4% and 5% is a reasonable annual withdrawal rate in retirement, so if you withdraw 4.5% of that $420,000 in your first year of retirement, you'll have nearly $20,000. Along with Social Security payments, whatever they may be in 20 years, will that be enough to live on? Maybe not. (Of course, if you have $62,000 and you can add $8,000 per year for the next 20 years, and it all grows at 10%, it will total nearly a million smackers. Still, that would yield just $45,000 in your first golden year -- not a princely sum.)

I hear now and then from readers tired of my harping on our general lack of preparation for retirement. I realize that some of us have indeed been saving and investing responsibly, but too many people haven't. Remember that $62,000 figure? It was just an average. That means many people have much less.

Surprising numbers
Here are some of the provocative numbers offered in the article:

  • "[Some] studies of the savings and spending habits of the generation born between 1931 and 1941 revealed that at least 80% had accumulated more than enough wealth for retirement."
  • "A study last October by another group of economists, including two working for the Federal Reserve Board, found 88% of retirees age 51 and older had adequate wealth."

How would I answer those statistics? Well, I'd note that these groups include many in their 70s, 80s, and 90s -- not exactly the same generations that are saving now for retirement. Also, these older folks may not end up facing (or having faced) the skyrocketing medical costs that are facing those retiring now. Many of these people own their own homes, while many people today are living in homes bought with precarious mortgages. Times are simply different.

Speaking of timing...
Another odd retirement recommendation I've seen referenced is that you're squandering your youth when you save as much as you can. Yowza. To me, if you end up oversaving, you'll simply be able to enjoy a more comfortable retirement. (And remember, for many of us, retirement may be several decades of our lives.) If you end up undersaving, you'll be in financial dire straights. That's not a gamble I'd want to take. And perhaps most importantly, the earliest dollars you save are the ones with the most growth potential, because they have the longest time to grow. If a 25-year-old can put away $5,000 and it grows at 10% for 40 years, until age 65, it will become more than $225,000! Just a few investments like that can yield a million dollars. Why turn your back on such wealth and security just to go on a few more ski trips?

Better still, if you invest effectively, you can probably beat that 10% average annual return. Carefully selected individual stocks can easily top that, and so can some top-notch mutual funds. The Bruce Fund (FUND:BRUFX), for example, has averaged 20% growth over the past 10 years. The Bridgeway Large-Cap Value Fund (FUND:BRLVX) has returned an annual average of 15% over the past three years and recently included the following among its top holdings: AT&T (NYSE:T), Qwest Communications (NYSE:Q), MetLife (NYSE:MET), and Lehman Brothers (NYSE:LEH).

Be smart about retirement
Don't end up facing the unhappy possibility that you didn't save enough to live well later in life. Be prudent and plan. You probably won't need to save every penny you can -- just be sure that you're saving enough. We can help you learn more about this vital topic. Our Retirement Center is a good place to start.

Also, check out our Rule Your Retirement newsletter service -- it's prepared by Robert Brokamp, a smart and witty guy who distills what you really need to know into a manageable volume each month. A free trial will give you full access to all past issues, allowing you to gain valuable tips and even read how some folks have retired early and well.

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AT&T is a former Stock Advisor pick.

Longtime Fool contributor Selena Maranjian owns shares of no company mentioned herein. Her favorite discussion boards include Book Club, The Eclectic Library, Television Banter, and Card & Board Games. For more about Selena, view her bio and her profile. The Motley Fool is Fools writing for Fools.