Managing 401(k) is the single most important task that most career professionals face today in order to ensure a secure and comfortable retirement. Many financial advisors and investment companies charge a stiff fee in order to provide what should be a free and basic service - planning your 401(k) to ensure a rock solid retirement.

Let us go over the pieces of the puzzle that you need to address in order to ensure that you are managing your 401(k) to its best potential. The most important factors to consider are:

• Contribution Level - Recommendation is to maximize your contribution to your 401(k) account. However, the path towards this maximum goes through the following steps - first, maximize contributions to your Roth IRA (and your spouse's Roth IRA); next, contribute as much into your 401(k) as to get the maximum employer match; match this with an equal amount in a taxable account (that is, your 401(k) contribution and taxable account contribution should be equal); now, raise your 401(k) contributions in lock step with your taxable account contribution until you hit your maximum 401(k) contribution levels. You will generally not need to exceed this level of savings rate for your retirement (it will already amount to 20-30% of your gross income).
• Asset allocation - This is the most important part of your decision making process, and is most affected by the choices available to you. If you do not have enough choices, petition your 401(k) plan administrators to add more choices. In the rest of the article, we will talk more about your 401(k) asset allocation.
• Withdrawal options - Do not withdraw before 59.5 years of age- if you can avoid it. Do not take any loans against your 401(k) if possible. Make sure you have enough emergency funds to avoid the above two situations.

In terms of asset allocation, you need exposure to the US stock market, to international stock markets, to some real-estate, to commodities, as well as to some bonds. Focusing on the US stock market, assign a portion to the total stock market index (Wilshire 5000) and a portion to the small-cap value index (or mutual fund). In international investing, apportion a part to emerging markets and another to the developed countries (Europe, Japan, Australia, and Canada). Or find a mutual fund that will do that for you.

Turning to commodities, seek mutual funds that invest in commodities or at least the precious metals (gold, silver, platinum). Similarly, find mutual funds that invest in REITs, or directly in real-estate (either commercial or residential or a mix of the two). Finally, focus on bonds and pull in a mix of international bonds (marked in a foreign currency), corporate bonds and inflation-protected bonds.

It is highly likely that your 401(k) plan does not cover this entire range of mix, but try to broaden out your allocation as much as possible, and petition for more choices.

The next step is to pick a percentage of allocation for each of your selections. An equal percentage allocation across this list is not a bad place to start. However, if you have a long time horizon (10 years or more), giving a heavier emphasis on the stocks, commodities and real-estate portion than the bonds will give you somewhat higher returns. Rebalance every 6 months or at least annually.

And that is it. Maintain your discipline and you will be home free, riding out all the waves and turbulences of the world markets.