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3 ways to get cheap 401(k) advice

Rebalancing your 401(k) at least once a year is important to ensure you're not taking too much or too little risk. Yet last year, fewer than one in five workers with 401(k)s bothered to do this crucial chore, according to Aon Hewitt.

That's understandable, given that many workers don't feel up to the task of managing their workplace retirement plans, as a Charles Schwab survey of 1,000 401(k) participants found. More than half found explanations of their investment options to be more confusing than explanations of their health care benefits, and nearly half they didn't know what their best investment choices are.

One out of three felt a lot of stress about trying to correctly allocate their accounts.

Stress no more. You have several options that can simplify managing your retirement accounts without costing you a fortune. They include:

1. Target date funds. Most 401(k) plans have target-date funds that offer asset allocations based on how long you have until retirement and that grow more conservative as that date gets closer. Target date funds are typically a good fit for young and inexperienced investors, but you should go all in because spreading your money around in a bunch of other 401(k) options defeats the purpose. (Workers who had all their money in target date funds were excluded from the Aon Hewitt rebalancing numbers because those participants don't need to rebalance.) You shouldn't pay through the nose for convenience, however. If the expense ratio is over 1 percent, you might want to look for cheaper options.

2. Employer-provided tools. These can range from a free asset-allocation calculator on the plan provider's site to full-fledged investment management, where you turn your account over to a company such as Financial Engines, Morningstar Retirement Manager or 401K GPS to devise a portfolio and keep it balanced. The cost for these services is typically about 0.5 percent of your portfolio per year, although some providers charge flat fees.

3. Web-based tools. You can get free asset allocation advice from FutureAdvisor, GuidedChoice, blooom and Kivalia, among other sites. Smart401k offers advice and monitoring for a fee. Guided Choice and blooom also offer 401(k) account management using computer algorithms, an approach known as "robo advice" or digital investment management. Robo-advisors are famed for their low-cost approach, but not all will help with 401(k)s: Betterment, Wealthfront and Schwab Intelligent Portoflios, among others, currently don't manage or offer advice on workplace retirement plans, although they will manage old 401(k)s that are rolled over into IRAs. FutureAdvisor offers advice but not management of 401(k)s, while Vanguard Personal Advisor offers advice about 401(k) plans it administers.

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