Here's how most Americans manage their mix of 401(k) investments: They ignore it.
"One of the dominant behaviors is inertia," said Jean Young, senior research analyst in the Vanguard Center for Retirement Research.
The vast majority of retirement plan participants are too busy, overwhelmed or just plain bored to make any changes to how their retirement money is being invested, experts say. That can be a bad thing for a 60-something careening toward retirement with a portfolio more appropriate for a 20-something. But researchers say it also can be a good thing if a total lack of motivation keeps less-savvy investors from trying to predict which parts of the market will crash or flourish.
"The idea that we want every 401(k) participant in America to become a day trader is not an appealing option," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "On the other hand, it would be nice if people sort of rebalanced as they aged."
For many Americans, however, just figuring out how much of your nest egg should be in stocks, bonds and other investments can be overwhelming. That's probably one reason Vanguard and Fidelity Investments say they are seeing growing popularity of funds that are based on what year you expect to retire, and reallocate accordingly.
Munnell said she's a fan of the so-called target date funds, as long as the fees are reasonable.
"I think it's good financially and I think it's good emotionally, because this feeling that you have to be making the right investment decision every month or year or whatever is a big burden on people," Munnell said.
The issue of whether people are managing their 401(k) investments appropriately has become increasingly critical as more Americans head into retirement expecting to rely on these investments for their day-to-day expenses. That's a switch from the early years of the 401(k) plan, when it was seen as more of a supplement to pension plans.
"For many people, it's all they have," said Jeanne Thompson, a vice president with Fidelity Investments.
Many Americans also appear to be worried it's not going to be enough. An annual survey of more than 4,000 full-time workers participating in retirement plans, released Wednesday by human resources consulting firm Towers Watson, found that less than one-fourth of respondents are very confident they'll have enough money for the first 15 years of retirement.
About half of the respondents to the Towers Watson survey had reviewed their retirement savings in detail in the past year.
Thompson, of Fidelity, said that for many participants, a retirement plan is also their only exposure to the stock market. And over the years, investment experts have come to realize that most people don't have the will to figure out how to invest their money correctly—and may not have the skill, either.
"If you look at the do-it-yourself investor, it's like they're all over the place," said Vanguard's Young. "It looks like some people appear to be getting it right, but we wonder if that's really skill, or is it luck?"
Most people are just leaving well enough alone.
At Vanguard, Young said about 10 percent of participants initiated at least one trade or exchange in 2013. At Fidelity, Thompson also said that about one in 10 investors make a change in a given year.
Consulting firm Aon Hewitt's 401(k) Index, which has tracked investment activity at large U.S. companies since 1997, shows that in a typical year, fewer than 2 in 10 retirement-plan participants move money from one fund to another.
The share of people transferring money didn't even increase that much in 2008, when the markets tumbled, said Winfield Evens, a partner at Aon Hewitt.
"It's rare for people to make a transfer," Evens said.
There's definitely a risk to moving money around at the wrong time. Thompson said Fidelity's analysis showed that the people who panicked and moved their money to cash when the market tanked during the financial crisis often didn't get back into the market in time. That means they lost out compared to those who had stayed the course once the markets started to improve.
Experts say the one area you can—and should—easily pay attention to is how much of your income is going toward retirement. One key worry is that many Americans just won't have enough money in those accounts once they retire to maintain their standard of living.
"People aren't saving enough," Munnell said.