"What's the difference? you ask. A lot - over $280,000. That's how much less someone stashing $250 a month into a retirement portfolio would earn over 40 years if the annual return dropped from 8% to 7% - or just one percentage point. Even more startling, however, is that one out of four Americans isn't saving or investing anything for retirement. And 35% of Americans aren't contributing the maximum amount allowed to their retirement plans. Statistics like these prompt worries about a "retirement crisis" for today's workforce.

There are three main reasons for this concern:

1) too many people aren't planning for retirement at all;
2) of those who are, too many don't know how much money they'll really need at retirement; and
3) many don't know how much to invest to ensure they'll have the money needed to get through the retirement years.

SET GOALS
The first logical step: setting a goal of how much will be needed to live comfortably at retirement. A good benchmark is 70% or 80% of the income earned during the year before retirement (don't forget to factor inflation into the calculations).

GETTING FROM HERE TO THERE
The keys to success are relatively simple: First, start planning and investing now. Second, continue investing on a regular basis. And third, allocate investment assets wisely. Studies have shown that more than 90% of investment performance is determined by how assets are divided among stocks, fixed-income investments, and cash equivalents.

THE "SAFETY" MYTH
Unfortunately, many Americans assume they'll be better off placing their retirement funds in safe fixed income investments such as Treasury bonds or money market accounts. A recent study found that 32% of retirement investments are in "stable value" assets, with another 23% in company stock. This "safety" assumption can be dangerous, since GIC and money market returns have historically average only around 5%-6% per year - barely enough to keep up with inflation. .