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Jennifer W. is a late-40-something single woman from just south of Tacoma, Wash., who is worried about her investment future and puzzled by her investment past.

Like a lot of people her age, she was encouraged to save as much as possible, to grow her own retirement nest egg through individual retirement accounts and 401(k) plans. She started doing that as early as she could, with as much money as she had.

Along the way, however, there were kids and a divorce, job loss and change. Coupling some financial setbacks with 10 years of market volatility that has mostly resulted in flat-line long-term results, and Jennifer’s mutual fund accounts look better than when she started, but hardly look great.

“I would have thought that, by now, I’d be a lot farther along toward retirement,” she said in an e-mail. “I hate debt, so I try not to have any, and I don’t mind saving, but I do mind struggling, and having accounts that don’t seem to be going anywhere.”

“I’m not comfortable with mutual funds now,” she added, “but I know so little about stocks that I would probably do worse on my own.”

And so her response to the problems is a fairly common one: She’s not going to contribute to the company retirement plan this year — her employer does kick in a small amount on behalf of all employees — and she’s not funding an individual retirement account.

She won’t wind up “another year older and deeper in debt,” because she’s paying off remaining debt and setting aside some cash for savings. But she also isn’t likely to get much closer to her goals this way.

There’s the rub, and it’s one that investors everywhere are feeling.

A survey released this week by Putnam Investments showed that nearly 40 percent fewer Americans will fully fund their IRAs in 2010, compared to 2009. More than half of the people who did not make any set aside in 2009 said they lacked the cash to invest or preferred to keep the cash available. Another 25 percent did not invest because they are worried about market risk.

In overall savings — going beyond IRAs to look at other investment options — the survey showed that 60 percent of respondents are not increasing the amount they set aside this year.

It’s no surprise, therefore, that more than 60 percent of the group thinks that their savings “are unlikely to provide … a sizable retirement nest egg.”

Clearly, Jennifer is the personification of the survey, because she understands the disconnect between the need to save more and the hardship of getting it done.

At the very least, she is making some progress by paying down the debt — which could otherwise forever eat into her income — but many people have become completely frozen by disappointment and circumstance. They’re giving up the accumulation edge they get from the federal government when it comes to tax-advantaged accounts like IRAs and 401(k)s. While statistics show that consumers have stepped up their debt reduction and savings, that’s still not the norm.

Doing nothing is a death sentence for your retirement savings.

In the boom years of the 1990s, investors could do minimum set-asides and “let the market save for me,” meaning they were getting such oversized gains that smaller contributions were less of a problem. Those days are not coming back any time soon. Even the most optimistic investment strategists aren’t calling for long-term returns above historic norms any more.

“All of the numbers can be scary, so you really need to understand what you will need in retirement and then work back from that number,” said Jeffrey R. Carney, head of retirement and global products at Putnam. “You need to know what it will cost to maintain the lifestyle you want, and then you need to create a portfolio that delivers that income.”

That sounds simple and intuitive, but, as Jennifer’s case shows, a lot of people still can’t bring themselves to follow the generally prescribed retirement-savings path.

“There is a spectrum of solutions that need to meet two key things,” Carney said. “First, what kind of resources you need to have based on your goals and assets and, then, how much risk you are comfortable taking to get there. Right now, many people are not comfortable taking investment risks, so they have to scale back, be more conservative and at least be comfortable getting through the accumulation period with as much as they can save.”

Obviously, investors can try to learn stocks, bonds, mutual funds and see if they can’t increase their comfort level, but the bottom line for the foreseeable future is that investing just isn’t going to be something many average investors get “comfortable” with. That won’t make it any less necessary.

Chuck Jaffe can be reached at cjaffe@marketwatch.com..

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