You get it. You should be saving for retirement. You’re supposed to take advantage of your 401(k) match. You have your head in the right place and want to do the best thing for your financial future.

Investing shouldn’t take hours of planning and head-scratching, but there’s a reason so many people are stressed out about their 401(k)s. These retirement accounts might be offered through your employer, but your boss probably isn’t going to sit down and walk you through your investing options. (And, unless she’s an expert, you probably don’t want her to.)

People ask us all the time: “What investments should I have in my 401(k)?”

Our answer: Everyone’s situation is unique. But unique doesn’t have to mean complicated or time-consuming.

Even if your employer doesn’t offer a 401(k) from Betterment for Business, we can help you. Here’s how we recommend choosing your 401(k) investments—without the stress.

Generally, you should choose a target-date fund, unless one of these circumstances is true for you:

  1. Your 401(k) plan doesn’t offer a target-date fund or the ones it does offer are expensive. As a comparative data point, the average expense ratio is 0.78% across all target-date funds in 2014, according to data published by Morningstar.
  2. You really want to manage your own investments.

If you’re new to investing, don’t have a lot of time or interest in doing it yourself, or simply want a one-click easy decision to ‘set it and forget it’ for your current 401(k), then you’ll probably do best with a target-date fund. These funds are designed to “glide” you to retirement with investment advice that automatically updates and rebalances your portfolio as the years go by, guided by the date on when you plan to retire.

Pick the Right Target-date Fund

To pick the right target-date fund, consider what age you’re planning to retire. For example, if you’re planning to retire at 65 and you’re 30 years old today, your target date is 35 years from now. That’s year 2050. The target-date fund is likely have the year (e.g., 2050) in the name of the fund.

Your next step: If you’ve selected and invested in a target-date fund, you’re done. If you’re being asked to use a pre-programmed risk profile and don’t know how aggressive you should be—or if you want to get more hands-on with your investments—read on.

Or Determine the Right Risk Level for Your Goals

If your 401(k) lacks a target-date option, look for a pre-programmed risk profile. For example, some plans will ask you to simply choose whether you want to be “aggressive,” “conservative,” or something in between.

Investing risk depends on a number of factors, including how many years you have until you’ll need your money. Typically, the longer you have until you need your money back (say, when you’re in your 20s and starting to save for retirement), the more risk you can handle.

If you’re trying to determine what your correct level of risk should be, you can use Betterment’s advice tool. (Yes, this is a hack, but our tool is extremely useful even for the money you don’t invest at Betterment, such as your 401(k)).

How to “Hack” Your 401(k) Using Betterment’s Advice:

1) Open a Betterment account and create a Retirement goal, entering your desired retirement age.

2) Review the allocation recommended on the Advice tab.

  • If you have more than 20 years until your desired retirement age, Betterment’s advice recommends a portfolio with 90% stocks—that likely corresponds with an “aggressive” portfolio, but you will need to look your provider’s definition to be sure.
  • If you have less than 20 years until your desired retirement age, Betterment’s advice recommends a portfolio comprising fewer stocks, based on the number of years you have until retirement.
  • If you want to be more conservative than Betterment’s advice, drag the slider and see how the mix of stocks and bonds changes. (If you want to know more about how we construct our advice, you can learn more here.)

3) Simplify Betterment’s advice so you can find corresponding options within your 401(k).

Betterment provides a detailed view of the assets that comprise the mix of stocks and bonds in a portfolio. To correspond with the offerings available through your 401(k) plan, you may need to group asset classes. For example, if Betterment recommends four different U.S. stock funds, you might want to add those up to arrive at a grand total for how much U.S. equity you should hold in your 401(k).

  • Similarly, if Betterment recommends you put a certain percentage of your portfolio in emerging markets but your 401(k) doesn’t offer emerging markets, simply add that percentage to your total international allocation.

4) Write down what percentage Betterment recommends you invest in key asset categories, like large-cap stocks, mid- and small-cap stocks, international equities, and bonds.

Your next step: If you only needed to figure out which pre-programmed risk profile to choose, you have your answer based on steps one and two. If you’re planning to manage your own investments, continue reading and keep your notes from steps three and four.

Build Your 401(k) Portfolio

Many 401(k)s have a limited number of choices; you might only have one or two choices for large-cap U.S. stock funds, one or two choices for a bond fund, and so on. Your goal should be to do the best with what you’ve got.

Search your 401(k)’s offerings to match the options as closely as you can to your Betterment game plan with the percentage for each kind of investment.

Whenever possible, we recommend searching for the lowest-cost, most broadly diversified funds in each asset class. These funds often are often index funds, so look for “index” in the name. You can always search Morningstar.com to get performance data or compare funds if you’re trying to make a decision between similar funds.

Hypothetical Case Study: A 35-year-old Investor

Erin is 35 years old and plans to retire at age 65, so she has more than 20 years before she’ll need her money back. When she makes a Betterment account, here’s the hypothetical plan she receives:

Screen Shot 2015-06-10 at 11.46.53 AM

For illustrative purposes only. Not representative of any specific account or investments.

She can’t duplicate those exact choices in her 401(k) because they’re not offered by the 401(k) provider her company chose, so now she needs to do her best to approximate the big takeaways—like the percentage of stocks versus bonds, the percentage of domestic versus international investments—and implement them within her 401(k).

So Erin looks at what is offered within her 401(k). She doesn’t have many different options for U.S. stocks, but her 401(k) does offer an S&P 500 index fund, which aims to follow the progress of the broader S&P 500 stock market index. She also doesn’t see an option for emerging markets investments, but there’s a choice for a general international index. There’s no breakdown between the different kinds of bonds offered in her 401(k), but there is one choice for a U.S. bond index.

Making the best of her available options, here’s the breakdown Erin chooses:

Betterment asset allocation for a 90% stock portfolio Sample corresponding mix available for Erin’s 401(k)
US Total Stock Market (16.2%); US Large Cap (16.2%); US Mid Cap (5.2%); US Small Cap (4.5%) 42% S&P500 Index: the sum of all four Betterment recommendations for U.S. stocks
Developed markets (37.5%); Emerging markets (10.5%) 48% International Index: the sum of Betterment’s suggested percentages for international and emerging markets funds
Short-term Treasuries (0%); Inflation-protected bonds (0%); Municipal bonds (5.5%); US Corporate Bonds (0.6%); International Bonds (2.4%); Emerging Markets Bonds (1.6%) 10% U.S. Bond Index: the sum of the total allocation in her portfolio toward bonds

Similarly, as you “translate” the Betterment recommendations to what’s actually possible within your 401(k), keep your focus on the big picture.

Next steps: Congrats! You might be done for now, but don’t forget to revisit this mix of investments at least once a year to rebalance your portfolio and make sure your choices still make sense for your age and investment goals.

If You Selected Funds, Rebalance Your 401(k) Regularly

The hard work is over…for now. You should check in on your investments quarterly to make sure that they are still appropriate for your age and goals. If you opted for a target-date fund or a “risk profile,” this will only mean logging in to make sure that that profile and target date still make sense for you.

If you decided to choose your own investments, you will probably need to buy more of some investments and sell others to get back to your desired allocation as part of your regular rebalancing.

More from Betterment:

Financial advisory services are only provided to investors who become Betterment Clients pursuant to a written account agreement, which investors are urged to read and carefully consider in determining whether such agreement is suitable for their individual facts and circumstances.