401(k) plans have come a long way since they were first launched in 1978. The creation of the 401(k) plan represented a dramatic shift in the way individuals became involved with their personal retirement investments. Responsibility for choosing and monitoring investment performance also shifted from the employer to the employee. Over the years, many employers have worked to ensure that employees have access to simplified information and to experienced financial professionals who can help them take the guess work out of designing plans and choosing investment options.

This is a good start to helping you invest like a professional and cash in the largest retirement plan savings possible. (To learn about the basic concepts of 401(k) plans, see The 4-1-1 On 401(k)s .)

Read on for more tips on how to make the most of your retirement savings.

Benefits of 401(k)s

Next, establish a long-term asset allocation based on those parameters and just like the pros, write it down! You may want to draft an informal investment policy statement for that allocation, with guidelines for rebalancing. This will help you remove the temptation to jump in and out of the markets or make dramatic asset allocation shifts. You can estimate what your long-term performance may be based on historical ranges of various portfolios.

Your employer may offer tools to help you familiarize yourself with risk/reward relationships. The key again is to act like the pros, stick to your allocation and make strategic asset allocation adjustments just like the pros make at least semiannually. This means that your asset allocation does not change just because the market changes, but only if the premise for building your allocation changes. (For more insight, read Rebalance Your Portfolio To Stay On Track .)

For those who enjoy spending the weekend reading the prospectus distributed by the fund managers, it’s fine to spend some time going over this. However, it’s important to keep in mind that your plan administrator has already done the lion’s share of the due diligence. In other words, the funds offered to you have been thoroughly reviewed and evaluated for fees, expenses, performance and investment. This doesn’t mean you can close your eyes and toss a dart when choosing your investments, but if you have a choice between two large-cap funds. chances are they will be similar in many respects. Even though you will have no choice but to pay the internal fees, it’s important to know what they are. There will undoubtedly be outliers with higher fees; you may want to stay away from funds with higher fees if you feel the fees are greater than the fund is worth. You may also pay higher fees for international investments as those funds tend to charge higher fees. It is likely that a professional firm has determined that the fees for the funds are within reasonable ranges, but you should check them anyway to be sure. (For more on fees, read Stop Paying High Mutual Fund Fees .)

What the Pros Look At