Online Retirement Calculators: Hit and Miss

4. Pump up your replacement income level. It's tricky to estimate how much income you'll need in retirement, usually expressed as a percentage of your current income. Financial planners have long championed setting aside enough to generate 70 to 80 percent of preretirement income. But some advisers now think that's low. "Very few people spend less in retirement," says financial planner Marc Schindler of Pivot Point Advisors in Bellaire, Texas. "People are living longer. They have more time to spend money in retirement, and healthcare costs are rising." He advises planning to spend just above 100 percent of current gross income.

Yet Laurence Kotlikoff, an economics professor at Boston University who has developed his own tool, ESPlanner (available at esplanner.com for $149), contends that "the calculators have so many assumptions that they are dangerous. The financial industry is interested in scaring you into thinking you won't have enough money, and then they offer to help you get there by selling you investments. It's a form of financial malpractice."

5. Watch for sales pitches. Financial services company websites are full of ads for setting up an IRA account or purchasing mutual funds. But there are few shortcuts in retirement planning. Try different calculators, and if you're ready to retool your retirement plan, start by asking friends for references of trusted advisers or consult groups like the Certified Financial Planner Board of Standards.

Above all, take control of your retirement finances. As Dartmouth's Lusardi says, "Doing nothing is simply not a good idea in this economy."