When it comes to managing money, many of us don't know where to start. That's particularly true when dealing with retirement assets. In fact, research from the Federal Reserve found that 60% of Americans with self-directed retirement accounts such as IRAs and 401(k)s had "little or no comfort" with managing retirement money. 

It's natural to be overwhelmed when faced with a (hopefully large) pot of cash intended to help support you for the rest of your life. But you need to face your discomfort and find a way to take control of managing retirement assets. These four steps will help you take control and put your mind at ease that you're managing your money right.

Binder labeled "RETIREMENT SAVINGS PLAN" on a table with a pair of glasses, a calculator, and a pen on top of it and a coffee cup standing next to it.

Image source: Getty Images.

1. Invest in the right asset mix

If you want to manage investments wisely, follow one simple rule: diversification. Diversification means you don't put all your eggs in one basket. Instead, invest in a mix of different assets types so if one performs poorly, others hopefully do better.

You need to look at the big picture when it comes to diversification. It doesn't mean putting all of your money into either stocks or bonds. You should have a mix of stocks -- which can be more risky but can provide higher returns -- and safe bond investments, which come with little chance of loss, but limited gains. 

It's hard to know how much of your investment dollars to allocate to stocks versus bonds, especially because your asset allocation should change over time as you get older and have less time to wait out stock market downturns. One good rule of thumb is to subtract your age from 110 and invest that percentage of your portfolio in stocks. So a 20-year-old person would invest 90% of assets in stocks, while an 80-year-old person would invest 30% in stocks and the rest in bonds.

You want to ensure your stock investments are diversified, too. Don't put all your money into one company -- no matter how much you love it -- because this could lead to financial disaster if its industry performs poorly or if it turns out that the CEO was cooking the books.

And don't put all your money into one sector, such as buying all technology stocks, because your portfolio will collapse if that industry happens to have a bad run. Instead, you want exposure to a mix of small and large companies across different industries, as well as exposure to emerging markets and real estate. Investing in lots of different things maximizes the chances your overall portfolio will perform well over time. 

2. Choose simple investments if you don't know how to pick stocks

Picking individual stocks works out very well for a lot of people. If you know how to research and look at the fundamentals of a company, you have a lot to gain -- especially if you buy good companies that grow over time. 

Unfortunately, lots of people don't have the patience to do research or possess the financial knowledge to tell which companies are likely to be solid businesses. If you don't have the know-how or aren't interested in picking individual stocks, you don't have to -- and you can still get a diversified portfolio filled with a mix of different assets. 

You can do this in a few different ways, but one of the best approaches is to choose some Exchange Traded Funds (ETFs) that give you exposure to different asset classes. For example, you could opt for a portfolio made up of just four ETFs:

  • The Vanguard S&P 500 ETF (NYSEMKT:VOO), which tracks the U.S. market.
  • The Vanguard FTSE All-World ex-US ETF (NYSEMKT:VEU), which tracks stocks from all over the world outside of the U.S.
  • The Vanguard REIT ETF (NYSEMKT:VNQ), which gives you exposure to real estate
  • The Schwab U.S. Aggregate Bond ETF (NYSEMKT:SCHZ), which allows you to invest in bonds

There are many model portfolios you can use to get a diversified mix of investments. The key is to pick simple investments that allow you to put your money into lots of different things. 

3. Watch out for investment fees

When selecting investments, it's imperative to focus on the fees.

Consider three different investment options: one charges a 0.5% fee, the other charges a 1% fee, and the third charges a 3% fee. All three return around 7% annually. If you invest $5,500 annually over 30 years:

  • The investment with the 0.5% fee would turn into more than $475,000.
  • The investment with the 1% fee would turn into around $435,000.
  • The investment with the 3% fee would turn into just $308,500.

You'd have $166,500 more with the first investment than with the third.  Can you afford to lose that much just because you didn't pay attention to what you were being charged?

Most 401(k)s have fees, so ask your 401(k) administrator what they are. If they're more than 1% annually, consider investing only up to the employer match, and then put your money into an IRA.

And when you look at ETFs or mutual funds, find out what the fees are and see how they compare to similar assets. They're required to be listed in the prospectus materials for each ETF or mutual fund. Unless there's very strong evidence over a long time that an investment with a higher fee outperforms cheaper alternatives, opt for the low-cost investment every time.

4. Don't react based on emotion

Finally, it's important that you don't base your investing philosophy on fear. Fear-based investors invest when a particular market is hot because of FOMO (fear of missing out). But they often put money in too late after a rise has already occurred. And fear-based investors often sell when the market starts to go down, locking in losses and missing a potential rally. 

The reality is, most investors -- especially those with a diversified portfolio of ETFs -- don't need to actively manage investments. And most shouldn't. But you should schedule regular deposits into your investment accounts. This way, you'll always be buying new ETF shares on a regular basis, so sometimes you'll happen to buy low and other times you'll happen to buy higher.

Sure, you may have some downturns, but if you've invested wisely, over time your portfolio value should increase. 

You can make smart choices when it comes to managing your retirement assets

As you can see, managing retirement assets doesn't have to be hard. Just invest in the right mix of assets, pick some simple investments, watch out for fees, and leave your cash alone. You should be fine. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.