The Vanguard Group handles a lot of 401(k) retirement savings plans. They serve 2.8 million people, who hold a total of $400 billion in institutional assets. That means they have a pretty good read on the savings habits of your average cubicle dweller.

A recent Vanguard report examining the behavior of those 2.8 million people suggests that there's some confusion out there.

First, we seem to be a little overwhelmed by choice. The average number of investment options rose to 18.6 last year, and savings plan participants did not adopt the new options as fast as their employers offered them. (Looks like I'm not the only one paralyzed by the endless varieties of toothpaste at the drugstore, or the many other advances of the modern economy.)

Second, many workers' plans offer life-cycle funds, a kind of "one stop shopping" meant to simplify the lives of savers everywhere. The funds offer a mix of stocks, bonds, and other investments at a risk level targeted to a person's projected retirement date. They're riskier for younger workers, more conservative for older workers. But not even one-third of participants who invested in life-cycle funds used them as they were intended.

Third, many workers have a big chunk of savings tied up in company stock. Specifically, 42% of people with the option to invest in company stock had concentrated holdings exceeding 20% of their account balances. That may be just fine, if your company's stock is performing well. It may be too much. I'm not going to recount the heartbreaking stories of retirements lost to Enron's collapse. Suffice it to say that you can express your company loyalty without endangering your retirement by playing on the softball team or helping organize the holiday party.

Lastly, nearly all participants were offered an equity index fund, but only half invested in that option. One of the most common pieces of advice you'll find at The Motley Fool is that a broad-based equity index with low fees can be an investor's best friend.

An index will try to match as closely as possible the returns of the overall stock market, something that most mutual funds find hard to do. They typically come with very low fees, leaving more of your hard earned dollars working for you. They're easy, and over the long haul they mean your investments will at least do as well as average.

Do any of these scenarios sound familiar? It might be time to glance at your 401(k) statement and give your investments a quick tune-up.

Look at the new options that might have been added since you last picked your investment mix. They might be better, or they might not. It's worth a look.

If you're invested in a life-cycle fund, know that those funds were designed to be your only investment. If you don't have access to one, but like the idea, you can often replicate the investment mix in a life-cycle fund with a combination of other funds. It can be done with a combination of index funds, like the Vanguard Total Stock Market Index Fund (VTSMX), the Vanguard 500 Index Fund (VFINX), or Vanguard's Total Bond Market fund.

Of course, Vanguard's not the only fish in the sea offering index funds. There's the RydexS&P Equal Weight (AMEX:RSP), Fidelity Spartan 500 (FSMKX), and many more. You can find index funds to track virtually every index known to investors.

If you have a large stash of change invested in your company stock, do some thinking about whether that's the best investment choice for your money. While you're at it, give index funds another look.

Stop in at the Index Center if you want to better understand that investment option. There's also a 401(k) Center if you need help navigating the world of workplace retirement savings accounts.

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Fool contributor Mary Dalrymple owns shares of the Vanguard 500 Index fund but no other funds mentioned in this article. She welcomes your feedback. The Fool has an ironclad disclosure policy.