Diversify. Take a reasonable amount of risk. Contribute as much as you can, and enough to collect all of your employer's match. Don't get stupid with your employer's stock.

The rules for retirement saving success are pretty simple, and it seems like it should be hard to avoid hearing them -- they're all over the financial media, in books and magazines, and prominent in nearly every company's retirement plan literature.

But an awful lot of people still aren't getting the message.

Financial Engines, a company that provides automated investment advice and account management services to retirement plan participants, just released a study that evaluated the retirement investing portfolios of a million 401(k) participants at more than 80 large companies. And while there's some good news in the report, there's still a lot of room for improvement.

Some of the high points (or, rather, low points) include these findings:

  • Risk and diversification. Of the portfolios examined by Financial Engines, 38% get a "red" score -- the report uses a stoplight metaphor -- for risk and diversification. A red score can mean a number of things, but generally a red portfolio is much too conservative, overly concentrated in a single asset class, or stuffed full of company stock. And although the report points out that red scores are most common among participants making less than $25,000 a year, problems show up across the board -- a third of participants making $100,000 a year or more are in the red zone in this category. And speaking of company stock ...
  • Too much company stock is a problem. I've talked before about the problems with holding company stock in your retirement plan. Lots of public companies offer this feature, and if you work for companies like Google (Nasdaq: GOOG), Johnson & Johnson (NYSE: JNJ), Dow Chemical (NYSE: DOW), Microsoft (Nasdaq: MSFT), or Starbucks (Nasdaq: SBUX) that make it easy for employees to own company stock or options -- whether in your 401(k) or not -- it's tempting to put a lot of your eggs in the basket you know best.

    But your employer doesn't have to be Enron for its stock to be a high-risk basket for employees. All companies, all industries, have their ups and downs. If your company hits a bad patch, do you want your portfolio to take a big hit just as your job might be at risk? According to Financial Engines, 36% of participants who have company stock as an investment option in their plans have more than 20% of their portfolio invested in it. A small investment -- say less than 5% of your total portfolio -- might be a worthwhile choice, but too much is, well, just too much.
  • Get that match. There are lots of ways to wreck your retirement, but not leaving free money on the table is -- or should be -- a no-brainer. Most employers match employee contributions up to a certain percentage -- for instance, they might contribute a dollar for every two dollars you contribute up to 6% of your salary. The details differ among plans, but nearly all plans offer something. That something is free money -- over and above any wages or salary or bonuses you might get. All you have to do to get it is save. But according to the Financial Engines report, 33% of participants aren't contributing enough to collect the full amount of their employer's match. Ouch.

The basic rules for retirement success are pretty simple, but if you'd like to take the master class, consider trying out the Fool's Rule Your Retirement newsletter. It will tell you everything you need to know to take maximum advantage of your workplace retirement plan -- and you can get full access absolutely free for 30 days, with no obligation.

Fool contributor John Rosevear doesn't own shares of the stocks mentioned in this article. The Fool owns shares of Starbucks, which is a Motley Fool Stock Advisor pick. Johnson & Johnson and Dow Chemical are Income Investor picks. Starbucks and Microsoft are Inside Value selections. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy never leaves money on the table.