You don't have time to own a dozen funds. And you don't need to. You can get a diversified portfolio with just one target-date fund. This hands-off investment changes allocation and strategy as you progress toward retirement. Last year, more than three-quarters of 401(k) plans had target funds, reports benefits consultant Hewitt Associates.
If a target fund isn't an option, trim your portfolio to three index funds: one total domestic stock market, one total foreign and one bond. For recommendations, see the Money 70; for your ideal mix, use the asset-allocation calculator to the right.
If your plan offers automatic rebalancing - 42% do, according to Hewitt - sign up for it; the account will periodically shift investments to get back to your desired allocation.
NEXT: Week six: Automate the rest of your investments