NEW YORK (Money Magazine) -- When it comes to 401(k) plans, what doesn't work is pretty evident: Retirement investors tend to be lousy at picking the right mix of stock and bond funds. Many opt for either supersafe, low-returning choices, such as stable-value funds, or the most risky investment of all, company stock.

Those findings have spurred 401(k) providers to offer workers more help with investing, in one of two ways: target funds, which give you a premixed portfolio that becomes more conservative as you near retirement, or accounts managed by professional advisers.

A smart portfolio let Brad Hall retire early and start a second career in classic cars.

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Early data suggest that these new options are having a powerful impact on retirement wealth. Consider the results at Financial Engines, an advisory firm founded by Nobel-prizewinning economist William Sharpe that runs managed accounts for 401(k) plans.

An analysis of returns at 65 companies found that the switch to managed accounts boosted returns by as much as 3% annually after expenses.

The key: more money in stock funds. "With a better asset mix, you have more potential for building wealth," says Financial Engines chief investment officer Christopher Jones.

Evidence is emerging that target funds are also delivering strong results. Analyzing returns at two 401(k)s, Hewitt Associates found that in each of the three years from 2001 through 2003, investors in funds with preset portfolio mixes, including target funds, had higher returns than those who chose their own portfolios.

Those investors also kept more of their money in stocks - 65% vs. 54% - than those who invested on their own.

Does this mean you have to let someone else do the driving? No, but it does illustrate the power of picking a suitable stock and bond allocation and sticking with it.

Putting together an effective mix helped Brad Hall save enough to retire early. During a 29-year career as a financial executive at Koch Industries, Hall held an aggressive 90% of his 401(k) in stocks.

"When the market goes down, I don't mind. I know it will go back up," says Hall, 56, who lives with wife Cathy, 55, in Wichita.

Still, he was careful to stay well diversified, holding large- and small-cap funds as well as foreign funds.

Two years ago, tired of the frequent international travel his job required, Hall decided to quit. His retirement savings had grown to seven figures, so he was free to launch Hall Motors, which deals in high-end classic cars.

"It's something I've always loved," he says. His portfolio, which he rolled over into an IRA, remains aggressive. "I'm still investing 80% in stocks," says Hall. "But I have fixedincome and alternative assets too."

To have an expert determine the right combo of stocks and bonds for your age and risk tolerance, the simplest solution is to switch your 401(k) holdings into the appropriate target fund.

If such funds aren't available, use these broad guidelines: Early in your career, keep at least 75% to 80% in stocks for growth. Reduce that stake to 60% to 70% in your forties and early fifties to cut risk.

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