Sometimes the most important retirement planning decisions pass us by without our realizing it.

At many workplaces, employees meet once a year with the company's designated financial planner. During the meeting, you review the performance of your 401(k), make decisions about allocation, and exit feeling relieved that you won't have to go back for another year.

But a recent study (link opens PDF) by Quinn Curtis of the University of Virginia and Ian Ayres of Yale University shows how two simple mistakes we make during these meetings can sabotage the entire retirement planning process.

Spread it out

The researchers refer to the first mistake as "return optimization loss," which is a fancy way of saying: You spread your bets too thin and therefore assume too much risk.

Think of it this way: You fill out 10 different March Madness brackets, but all 10 have Duke winning the championship. Though each bracket is fundamentally different in the early rounds, none of it matters if Duke doesn't win it all. The additional nine brackets didn't reduce your risk very much.

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How does this happen with retirement planning and 401(k)s? As the researchers put it: "Investors tend to spread their investments evenly across the menu [of investment choices in their 401(k) plan]." In other words, a whole host of options are presented to you, and you -- intuitively -- think it best to spread your bets between all the options.

The problem actually has just as much to do with how information is presented to you as it does with your actual decisions. That's because the menu itself doesn't represent perfect diversity.

For example, if there are 10 investment options, there may be six holding domestic stocks, three in bonds, and only one offering international equities. You think you're spreading your risk out with the first six picks, but they all overlap so much that if one sector of the U.S. economy tanks, your portfolio will suffer inordinately.

Don't pay too much

The second major retirement planning goof is termed "fee optimization losses." In plain English, this means that you're paying Wall Street folks way too much to manage your money. These fees often come in two forms: the expense ratio and loads.

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Think of it like this: A mutual fund has a fee that you have to pay in order to invest with it; this is the expense ratio. Usually, this number hovers around 1%, which means that every year, the fund takes 1% of your holdings as its fee. That might sound small, but added up over years, it can make a huge difference.

Loads, on the other hand, are one-time fees that investors pay, either when they begin investing with a fund (a "front-end load") or when they pull their money out (a "back-end load"). Fees for these loads can be as high as 6% of your overall investment -- an enormous amount.

Of course, the people managing your money need to earn a living. So what makes these fees so onerous, then? For one, there are options out there -- particularly through the Vanguard family of funds -- that have expense ratios as low as 0.05% and no loads whatsoever. What's more, the Vanguard funds routinely outperform those with higher fees.

Simple steps to great retirement planning

Before walking into your financial planner's office, do your homework. Find out what kind of options your 401(k) offers, see what sectors of the global economy these options are exposed to, and ask your planner to help design a portfolio that truly diversifies without too much overlap between your choices.

When you walk into your financial planner's office, finding out the expense fees and potential loads of any of your investments should be your No. 1 priority. No expenses are more damaging or unnecessary than these fees, and they should be avoided at all costs.

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