What do people do when they don't know which investment options to pick? They choose them all.
That's a bad idea. Your 401(k) plan isn't like a smorgasbord where you can try a little of everything. It's important that you understand your investment choices and that you choose the ones that will allow you to reach your investment goal.
Many 401(k) plan sponsors offer retirement-planning tools. This can make finding the right mix of funds for your retirement plan easy.
All you typically have to do is answer some questions about your age, how much you're currently contributing to your retirement plan, your income goals in retirement, whether you'd be willing to work part time when retired, and a few questions that will help the program gauge how much risk you're comfortable with.
Retirement-planning tools can analyze that information and the funds your retirement plan offers, weighing their strategies, risks and returns, and expenses. They often give you the odds that you will meet your goal and recommend a mix of funds to get you there (put 45% in Fund Z, 23% in Fund Y, and so on). If the chances of you achieving your goal are poor, you will have the option of revising some of your parameters to improve your odds.