Editor's note: This column first appeared in

The Save Safe Plan

on Friday, April 11. For more information on

The Save Safe Plan

, click here.

Planning for retirement used to be so easy.

You could work hard for a few decades and then retire with a nice, healthy pension.

These days you still have to work hard. But to get the nice, healthy pension, you're going to spend your free time trying to figure out your 401(k) plan and invest your own money so you can retire at all.

Sure, saving through regular 401(k) contributions is simple. Money comes right out of your paycheck and goes into investments of your choosing.

But that's the frustrating, time-consuming part: the choosing.

You only need to find a couple of decent mutual funds. But to do that, you might have to dig through a lot of dreck. To make this chore easier, here are a couple of problems you might encounter with your 401(k) and some quick solutions.

More Choices

Today the average 401(k) plan offers about a dozen investment options, up from three in the early 1990s. But more isn't necessarily better. Frankly, having a handful of good, diverse funds in your 401(k) would be a blessing. Instead, many people face plans loaded with dozens of mediocre, if not awful, choices.

I know. I have seen them -- plans with plenty of expensive funds whose hot streaks went cold long ago. Equally insulting is the lack of guidance you get when you try to wade through this morass.

What do you do? You should try to zero in on one cheap, diversified stock fund and one cheap, diversified bond fund. Despite the naysayers, an index fund is a solid choice for your stock allocation. You don't have to dig up dirt on the manager or the style of the fund. You can track the performance in the newspaper every day. And you have a good chance of finding one in your plan. About three-quarters of 401(k)s now offer an equity index fund.

A fund that tracks the

S&P 500

index might be the easiest to locate. This index is dominated by large-company stocks, but it does cover various sectors of the U.S. economy from health care and energy to financial services and technology. Or maybe you can find an option called a Total Stock Market fund that tracks the Wilshire 5000 index. And like the name says, you get exposure to the entire U.S. stock market, from large stocks down to small ones.

Sticking with a stock index fund should also solve another major problem you might face in your 401(k): high expenses. The index fund you locate in your plan may not be as cheap as the ones run by Vanguard. But it should be less expensive than the funds managed by actual stock pickers. Those pros must get paid, and as a shareholder, you're the one paying them.

As for a bond fund, look for a short-term or diversified bond fund. You can search for names like Pimco and Vanguard, two skilled bond managers. If you cannot find a fund that makes sense, a money market fund is one alternative to add some safety to your portfolio.

If you only want one fund, you can funnel your money into a balanced fund or its close cousin, a life-cycle fund. Both of these types of funds will give you a portfolio of stocks and bonds. The asset allocation in a balanced fund is usually fixed. In a life-cycle fund, it's typically tailored to meet a general risk profile or future retirement date.

Either way, you pick one fund and you're done.

In case you've allowed the

Enron

debacle to become a distant memory, consider this a gentle reminder: You should pay attention to how much of your money is in your company's stock. You already work at that company. Your livelihood depends on its success or failure. You don't need to load up on the stock as well. Imagine what would happen if the company hit the skids. You'd lose your job and your retirement savings.

In your 401(k) plan, you may not have a choice. Your company might match your contributions in stock. Don't turn that matching down. It's free money. And these days more and more companies like

Charles Schwab

(SCH)

have stopped matching 401(k) contributions. Take it if you can get it.

But you do need to know how long you have to wait to get out of the stock. If you can sell tomorrow, do it.

If you're forced to hold that stock for years, try to avoid buying it in other places -- through a regular brokerage account, for example. At most you only want 10% of your portfolio in company stock. And that's only if you happen to work for a company like

Wal-Mart

(WMT) - Get Report

.