Paying an extra 1% in annual 401K expenses could reduce your nest egg by about one-third come retirement. So take advantage of the cheapest option in your plan. A basic S&P 500 index fund. Some charge as little as 0.1 % vs. 1% or more for actively managed funds. If your 401K doesn't offer other low cost investment options, diversify elsewhere. Save enough to get the company match. Then fund an IRA, where you can choose which bond funds or foreign funds to go with. While you're at it, dump company stock. About $1 out of every $7 in 401K is invested in employer shares. But your income is already tied to that company. Your retirement shouldn't be too.