I totally agree that the variables make these figures questionable. You can't pop numbers into a two-minute equation and expect to get a quality answer.
Using myself as an example, these factors weren't considered:
- My mortgage is paid-off; thus, my cost of living is greatly reduced.
- I am 2/3 of the way to earning a pension that's as sure as anything is these days; yes, I'm a bit worried about it, but there's nothing I can do to make it 100% certain.
- The women in my family tend to live a looong time; thus, I need to be prepared to support myself a long time in retirement.
- We've always been frugal, and I expect that when we retire we'll actually live week to week on LESS than we do now (the kids'll be gone, we're going to downsize our house, we'll have only one car, and we'll have time to do more things like growing vegetables).
Each of these things alters my retirement number a bit!
That's our goal too: Use my pension and our social security to pay our bills, and reserve our savings for necessary but out-of-the-ordinary expenses (like a new car) and occasional vacations.
The thing is, you hear stories like this . . . and you also hear stories about people (usually women) who've outlived their savings and who are forced to choose between groceries and medicines.
The only right answer is a balance between saving and splurging, but that's not easy to manage when the number of years you'll live is an unknown!
Don't count yourselves short just yet. I know that at your age my husband and I were just making it (though we did max out our 401K money every single month), and in our early 30s suddenly everything became so much easier -- which made no sense because we'd added another child to our household. But it was at that point that our salaries really stepped up beyond "entry level", and we started to see the benefit of compound interest working on our side.
Yeah, it's easy to say, "But today's economy . . . ", and there's some truth to that. But every decade has its own issues. We graduated from college in the late 80s, when jobs were easy to find and stocks were paying well . . . but at the same time, home prices were skyrocketing and our first mortgage was at 11.5%. Also, there was great pressure among young college graduates to spend, spend, spend -- credit card debt's nothing to worry about! -- and frugality was something at which to laugh.
What you need to do at your age is focus on making good choices, and know that it'll fall into place -- even if it doesn't seem like it will. Key points:
- Avoid debt
- Max out your 401K every month; something in your budget can be cut, and someone lives on a couple hundred/month less than you do -- you can do it
- Pay something extra towards your house every month
This is why I'm fully convinced that the first step in financial security is choosing a college path that DOES NOT include debt.
Just another thought 
It seems most people expect their children to go to college. There are many trades that pay much more than those that require college degrees. I think too many students head off to college because no one looks to see where a child's abilities could take them. Especially here in the south where it is so easy to get into college,schools expect all kids to have that goal. It is such a disservice to children and parents. In America we are loosing talented craftsmen for this very reason. 
ok I'm off my soap box.
Seems like tax free municipal bonds are a great way to go
The 1st thing I would have to do is get out of NJ
