According to a recent Bankrate survey, the number one financial regret among Americans is not saving enough for retirement. If that doesn’t concern you, maybe it should.

The Great Social Experiment

The Revenue Act of 1978 ushered in the modern era of the 401(k) along with its cousins 403(b), 457(b), and TSP. These employer-sponsored plans provide a pre-tax method to save for retirement, usually with the added benefit of an employer match. In the 40 years since its inception, the number of U.S. companies that provide a traditional pension plan has plummeted 350%. Today only about 1 in 10 companies offer a pension.

It’s a bit of an experiment because no one knew if the average American could plan and save for their own retirement. Of course there is Social Security, but it was never meant to be a retiree's sole source of income. To carry the average middle-class lifestyle into retirement, an infusion of savings is needed to supplement Social Security retirement benefits.

Are we capable of saving for retirement? The same people who overeat even though we know it makes us gain weight, become couch potatoes when we know if gives us heart disease, drive drunk when we know we could kill someone or lose our license, smoke when we know it gives us cancer, and abuse drugs when we know it can kill us?

Turns out we can't. The instant gratification of spending money now outweighs the vague notion that we might retire someday. Less than half of those eligible to participate in their employer’s retirement plan actually do so. Of those, 20 percent are not saving anything because they are busy paying back loans that they took out against their plans.

Course Correction

Do not despair. Unless you are already retired there is still time to right the ship. Ever heard of Warren Buffet? Considered by many to be the greatest investor of all time, the Oracle of Omaha is worth more than $100 billion. The interesting part is he amassed most of his fortune after he turned 50. Prior to that he was only worth a paltry $300 million. The point is, as long as you are still earning a living you can save for retirement.

Get it Right

If you are not participating in your employer’s retirement plan, you need to get started right away. Fill out the forms and begin by saving the minimum if that is all you can afford. Set your contribution rate to automatically increase 2 percent each year and you will be on your way. If your employer doesn't offer a retirement plan, you can open an IRA.

If you are participating in your employer’s plan but you plucked your contribution rate out of the air, you can do better. Doing better doesn’t necessarily mean saving more, you might be saving too much.

How can anyone save too much for retirement? Go have a look in the mirror. You won’t look that way in 20 years. Neither will you be able to do the things you can do today. Life is short, you have to do what you can while you still can.

What does that have to do with saving too much for retirement? Plenty. That trip to Europe you promised your significant other but never took, all the weekend getaways you’ve skipped, the gifts you never gave – all because they cost too much. They didn’t cost too much, maybe you were saving too much for retirement.

Fast-forward to the end and you are too old to do anything. Too late you realize you’ve been doing it all wrong. You regret not experiencing more of what life has to offer when you were still young enough to enjoy it. That’s what saving too much for retirement looks like.

The fact is, you have no idea how much to save. Absent a plan your contribution rate has more to do with your personality than any basis in fact. If you are a free spirit who has lots of friends and loves to shop and you’re always late for everything and your phone is always dead, chances are you’re not saving enough. On the other hand, if you are hard-working and smart and you hate to dance and on-time to you means 15 minutes early, you may be saving too much. Saving too much or too little leads to regret, and worrying about retirement can keep you up at night.

So what’s a person to do? The best way to plan for retirement is to hire a financial advisor or avail yourself to sophisticated software that can perform a detailed analysis of your financial situation. Either approach will give you the best shot at maintaining your current lifestyle into retirement. Programs like Eggstack analyze your unique situation and provide guidance on how much to save. Rather than relying on retirement rules of thumb, modeling software performs a year-by-year simulation to deliver real retirement planning.

Don’t waste your time on free online calculators that ask few questions and spit out a one-size-fits-all answer. Does someone who retires at 55 and lives to 95 needs 4 times as much money as someone who retires at 65 and passes at 75? Of course they do. Did the free online calculator ask you about that? No, it didn’t. Does someone whose mortgage is paid off by the time they retire need less money than someone whose isn’t? Yes again. Your financial situation unique, seek a solution that honors that.

Develop a plan and monitor it closely so you can make corrections along the way. You can’t predict everything but that does not give you license to shrug your shoulders and hope for the best. Implement a winning strategy before it’s too late.

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