There's only one problem with this popular perception: It's wrong. While it's true you generally cruise at your top-end speed while in the highest gear, attaining that burst of acceleration to get to the top-end speed is not the function of the highest gear. Indeed, to get the burst needed to pass someone, you might often slip into a lower gear. No, the highest gear has only one objective: efficiency.

Shifting into the top-end gear isn't meant to do all those sexy things we think it should do. It's only meant to allow us to pleasantly cruise along. It maintains the pace the engine has worked so hard to achieve. In the process, it reduces the wear and tear on the engine. It also saves on gas.

The same misconception applies to 401k investments. Everyone seems to think 401k plans are all about investments. That's not true. The 401k concept is all about savings. Investments just help you cruise along more efficiently to a happy retirement. If anything, investments (or, more specifically, poor investments) are more likely to harm retirement savings than to help it achieve the lofty goals people generally need.

As a 2012 study shows, starting to save early, saving more and when you retire all have a greater impact on whether you'll be ready to retire than does investments.

So, should we be concerned with investments at all? The answer is still "yes" – if only to prevent investors from destroying their retirement nest eggs. But this doesn't mean we've got to give 401k investors a PhD. education in investing. No, most employees only need to understand one simple concept: the only way to achieve great returns is to risk subjecting yourself to greater losses (see "The One Single Most Important Investing Concept a 401k Fiduciary Must Teach Every Employee Investor," FiduciaryNews.com, November 12, 2013).

Everything else about investing doesn't matter if the 401k plan participant fails to understand this concept. Not taking enough risk can be just as damaging as taking too much risk. In addition, there are times in your like when you must take risk (and can better afford to take risk) and there are times in your life when you really should avoid risk.

There are a lot of emotions that drive investor behavior. These emotions can often overwhelm the cold logic of the risk-return relationship, often to the detriment of an investor's retirement savings. A plan fiduciary – whether the 401k plan sponsor or the investment adviser – should never assume employees can remove the emotions by themselves. The fiduciary must regularly reveal the ongoing threat of emotional decision-making and reinforce how to best take advantage of the risk-return relationship.

Without this disciplined approach, even someone who has saved early and often may find all their efforts were for naught as a result of one tragic investing error.