Easy Does It

Want some simple mutual-fund retirement choices? Consider life cycle funds. These funds have been attracting assets like crazy for two reasons: They're easy to understand and they're one-stop-shopping investment vehicles.

"Choosing a life cycle fund is simple," says Tom Roseen, senior research analyst at Lipper. "Your initial choice typically depends on your risk tolerance."

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Roseen says these funds appeal to busy professionals and entrepreneurs who don't want to take the time to pick a package of retirement-specific funds. "Life cycle funds offer simple 401(k) and retirement solutions that provide professional diversification but also regularly rebalance the allocations and work for those looking for a turnkey kind of investment," Roseen says.

Look for a wide range of life cycle funds available from fund families such as Fidelity, T. Rowe Price and Vanguard. While these types of funds can fit nicely into a qualified retirement plan, they're not for everyone. Forget about them if you're tax-conscious, if you're seeking home run-type returns (most represent a blend of stocks and bonds), or if keeping investment expenses down is a big deal for you (many are funds of funds and have higher annual expenses than other types of funds). That said, they do make retirement investing easy.