Costs compound just like returns. Paying 1% annually can siphon roughly a third of potential wealth over decades.

Favor broad-market index funds with expense ratios near 0.05%–0.10% instead of pricier funds above 1%. Every 0.10% saved each year is money that stays invested and working for you.

Build Core

A simple four-fund core covers the globe: total US stocks, total international stocks, total US bonds, and international bonds. Adjust the stock/bond split to match risk tolerance and time horizon. Keep each fund low-cost and broadly diversified; avoid overlapping niche funds that add complexity without clear benefit.

One-Fund Option

Prefer ultra-simple? A balanced fund around 60% stocks and 40% bonds delivers meaningful growth with gentler declines. Look for a long, consistent track record and expenses under 0.30%. This single-fund approach reduces tinkering and helps investors stay invested through rough patches.

Robo Help

Robo-advisors can build and rebalance a diversified, low-cost portfolio automatically. Fees often sit at or below 0.35% of assets, on top of underlying fund costs. They’re useful beyond a 401(k) when you want automation, tax-loss harvesting, and periodic rebalancing without heavy lifting.

Max Workplace

Contribute enough to your 401(k) to capture the full employer match—free money with immediate return. If the plan lacks strong bond or international options, fill those gaps in an IRA where you control fund selection and costs. Keep contributions steady through market swings.

Dump Concentration

Heavy employer stock in a 401(k) magnifies risk: your paycheck and portfolio both hinge on one company. Cap any single-company exposure to a small slice of total assets. Redirect contributions to diversified funds to reduce single-stock vulnerability.

Hold Broadly

Chasing hot themes often means buying high and selling low. A broad buy-and-hold approach to major asset classes has historically beaten the average behavior-driven return. Set targets, automate contributions, and resist switching strategies based on headlines or last year’s winners.

Be Patient

Value-oriented funds can lag when popular stocks surge. That delay doesn’t equal failure. Evaluate across full market cycles—ideally 7–10 years—before abandoning a disciplined approach. Monitor process, costs, and risk controls; avoid reacting to a single difficult year.

Pay Less Active

If using active funds, be ruthless on fees. Some large-cap managers with expenses near 0.35% or less have outpaced benchmarks over time. Scrutinize long-term, risk-adjusted results, manager tenure, and stewardship. Pay for skill only when there’s durable evidence.

Rebalance Smarter

Rebalancing manages risk but done too often can clip returns. In early accumulation, where equities dominate, a wide band or every-few-years cadence is reasonable. Tighten rebalancing frequency approaching retirement to keep risk aligned and harvest gains systematically.

Cut Advice Costs

Advisory fees around 1% bite harder when expected returns are modest. Consider lower-fee options: hybrid advice services near 0.30% or hourly planners for situational help. Ask exactly what’s included—investment management, planning, tax strategy—and compare the all-in cost.

Coordinate Accounts

View household portfolios together. If one partner sits at 100% stocks while the other holds a 60/40 mix, the combined risk may be misread. Use the strongest fund lineups across plans to build the desired overall allocation, not duplicate mediocre options in each account.

Tax Placement

Put tax-efficient stock index funds in taxable accounts and tax-inefficient assets—bonds, REITs, active strategies with turnover—inside IRAs/401(k)s. This asset location can lift after-tax returns without extra market risk. Revisit annually or after major tax law changes.

Reality Check

New products promise “smart” edges, but higher returns usually come from taking different risks. Before buying complex funds, revisit classics like broad indexes and time-tested guidance. Make sure any “edge” is clear, persistent, and appropriate for your goals and temperament.

Put It Together

Start with costs and coverage: pick low-fee core funds that span stocks and bonds globally. Decide on a stock/bond split you can stick with in bear markets, then automate contributions and set a sensible rebalancing rule. Trim advisory costs where possible, coordinate across accounts, and place assets tax-smart. Simplicity improves consistency—and consistency is the real edge.