Even as investors warily eye the “fiscal cliff” and the ongoing Euro crisis, they are still focused on saving for retirement, according to a recent survey from T. Rowe Price.

That’s the good news. The bad news is most investors are unwilling to take on the necessary risk to improve their retirement savings.

Among investors aged 21 to 50, 72% report that saving for retirement is their top financial goal, a priority applauded by T. Rowe Price’s resident retirement guru, senior financial planner Christine Fahlund.

“Retirement savings must come first for younger investors,” she said, noting that starting to save young boosts the compounding of earnings over a decades-long period.

Still, retirement was battling with other concerns for primacy, including improving their current lifestyles, cited by 50% as the top priority, creating or adding to an emergency fund, cited by 36%, paying off debt, cited by 34% and saving for college, the top worry of 27%.

Yet, in spite of investors grasping the importance of retirement, they are not saving enough to make a comfortable retirement a reality.

T. Rowe Price recommends investors save at least 15% of annual income. But the survey finds the reality to fall far short. About two-thirds of those investors with access to a 401(k) plan are contributing 10% or less of their salaries to their plan. Making matters worse, they don’t seem to realize how much they should be saving, with 42% guessing less than the 15% benchmark to be an ideal amount.  Worse still, just under one-third did not know how much they were contributing to their plan.

This lack of interest is surprising given how many believe they are unlikely to receive Social Security benefits – long considered a key leg in the retirement stool, along with savings, and, for previous generations, corporate pensions. Only 16% of investors believe they will receive Social Security benefits, with another 48% suspecting they will receive reduced benefits, and 36% thinking they will get none at all.

“Hopefully, their concern that they may have to rely solely on their investments in retirement becomes another motivating force that encourages them to save as much as they can,” Fahlund said.

Not surprisingly, their tolerance to risk dropped after the last few years of roller-coaster markets. Thirty percent report having a lower tolerance for risk, while 37% say they are steering clear of stocks. They cite many reasons for their trepidation, including the snail’s pace of the US economic recovery, health care costs and political uncertainty. While the last problem got solved earlier this week, the first two will likely linger for some time to come. Fahlund and nearly every other commentator notes equities have historically given better returns than nearly any other asset class over the long term.

“Younger investors in particular have an important ally on their side – time,” she said. “However fresh the crisis might linger in their minds, they would be well served to remember that because they are investing for decades, they should actually be taking advantage of down markets by increasing their equity exposure while stock prices appear attractive.”

Still, even with their reservations, roughly half the investors surveyed say their portfolio is allocated along similar lines as it was before the crisis; 31% say their investments are more conservative. Three quarters of fixed income investors are only somewhat or not at all willing to take on more risk to gain a higher yield.