"I'm not really a financial person," confesses Brenda Bradt, a 38-year-old manager at a major beverage company. So the Houston native, who had 100 percent of her 401(k) retirement savings invested in her employer's stock, had never felt compelled to diversify. That is, not until she heard the chilling news that hundreds of Enron employees had lost virtually their entire nest eggs when the company's stock collapsed. With some advice from a financial planner, Bradt has begun directing her new 401(k) contributions into a mix of diversified stock and bond funds, and she is gradually moving her employer contributions into those funds as well. "It's such a relief," she says, "I feel much more protected than I was before."

The Enron mess has the rest of us wondering, too. Just how safe are our 401(k)s? Keep in mind that the investments in a 401(k) plan are yours, not your company's. So if your employer goes bust, the contents of your 401(k) are protected from the company's creditors. But that won't matter much if you, like those Enronites, have stuffed your plan full of company stock that one day becomes worthless. The lesson: To reduce risk, diversify, diversify, diversify.

ARE YOU AT RISK?
Pull out your most recent 401(k) statement and look for a couple of key signs: First, how much of your portfolio is invested in your employer's stock? If it's more than 10 percent, take heed. Even if you're gung ho about your company's prospects, you shouldn't have more than 10 percent in company stock. (True: Some companies match your own contributions in company stock and then restrict your ability to get out of it.)

And if you're at all concerned about your company's future, steer clear of the stock altogether. "You've already got your paycheck riding on this company. Why put yourself at more risk?" says John Reckenthaler, president of on-line advice for the investment research firm Morningstar. Good question — especially when the average 401(k) plan gives you 12 different kinds of investments to choose from, usually mutual funds that own stocks, bonds, or a combination of the two.

Second, add up the amount of money in your 401(k) that's in stock and bond funds. If it's 100 percent in stocks, you may have a problem. Yes, most of your money should still be in stocks — they tend to grow faster over time (10.7 percent a year, on average, versus 5.3 percent a year for bonds, according to the research firm Ibbotson Associates). But they are also more volatile. To moderate those scary highs and lows, you need bonds, and you need to put your money in mutual funds that invest in a wide variety of stocks.

WHERE SHOULD YOUR MONEY GO?
First, do some easy math: Subtract your age from 100 and then add 10 (5 if you're conservative, 15 if you're a risk-taker). The number you get, says Michael Chasnoff, a Cincinnati financial planner, is the percentage that most 401(k) investors should keep in stocks. For example, if you're 30, then you should be investing about 80 percent of your 401(k) in stocks — say, 50 percent in a large-cap stock fund, 20 percent in a small-cap stock fund, and 10 percent in an international stock fund. The remaining 20 percent belongs in a bond fund. Total number of funds: four. Simple, right? For more advice on how to divvy up your money, consult Morningstar ClearFuture; see the list of resources below; or call the 800 number on your 401(k) statement. Many plan administrators offer on-line tools to help you make investment decisions.

Remember: On the day you retire, most experts say, you should still have as much as half your 401(k) money in stocks. Just not, we hope, in Enron.

THE HAZARDS OF COMPANY STOCK
Ever wonder how much money you'd wind up with if you put your 401(k) mostly in your company's stock? Take a look at the bar chart here. The 401(k) invested completely in employer stock (or any single large-company stock) will have a significantly lower expected median return over 15 years than the one invested completely in diversified stock funds.
WHERE YOU COULD END UP IN 15 YEARS*

100% employer stock: $13,504

50% employer stock, 50% diversified stock funds: $26,176

100% diversified stock funds: $33,745

*Assumption: The 401(k) contains $10,000 initially, and no more money is contributed over the 15 years. Numbers are based on Morningstar's projections based on historical stock-market data.

RESOURCES
Morningstar ClearFuture: www.morningstar.com. A step-by-step 401(k) planning and advice tool. You plug in your goals and your plan's investment choices and receive tailored recommendations. For access, you must sign up for a month's free trial of Morningstar's premium service (normally $109 per year).

A Commonsense Guide to Your 401(k), by Mary Rowland ($12, www.amazon.com). This comprehensive book tells you how to manage your plan wisely.

The educational site of the Vanguard Group: www.vanguard.com. Offers 10 quick "courses" in investing basics, including asset allocation and retirement planning.