Twenty-five million American workers can't be wrong.

They hold $1 trillion in company 401(k) plans, with an average balance of more than $35,000, because they know a good deal when they see one.Now, as you go over final results from last year's 401(k) investment vehicles to decide whether you should readjust your allocations, it's a good time to consider whether your company's plan and your goals are headed in the right direction. Make sure, unless your company's stock is one of the greatest of investment choices, that you don't put all of your money in it.

You need diversity. Go over mutual fund choices available in your plan to decide whether performance is up to snuff.

"The typical 401(k) was set up through a human resources department, which sometimes does and sometimes doesn't know about investments," warned Kathleen Hartman, 401(k) analyst with the Morningstar Mutual Funds investment advisory. "They set up a plan to provide a good benefit, so they usually are happy to receive feedback on performance and fees involved." She'd like to see each 401(k) which now averages six investment choices, offer 10 to 15 fund selections.

The 401(k) plan of Chicago-based Morningstar offered to its own employees is considered a model for the industry and includes the following carefully chosen funds: Selected American Shares, Gabelli Asset Fund, PimCo Stocks Plus Fund, Brandywine Fund, Domini Social Equity Fund, Fidelity Low-Priced Stock Fund, PBHG Growth Fund, Templeton Developing Markets Fund, Vanguard International Growth Fund, Colonial Newport Tiger Fund, Lindner Dividend Fund, T. Rowe Price New Income Fund, Fidelity Real Estate Fund and T. Rowe Price New Era Fund. There's also the Schwab Value Advantage, a money-market fund.

America's companies are making 401(k) plans more liberal and flexible. "We're seeing daily valuations and transfers of investments, enabling the participant to manage money more effectively," observed Lisa McNaughton, director of financial education seminars conducted by The Ayco Company, L.P. in Albany, N.Y.

Start contributing as soon as you're eligible, put in as much as it takes to maximize your company matching contribution and make your contribution on a pre-tax basis, McNaughton advised.

Seventy percent of companies match some portion of their employees' contributions, typically 50 cents for every dollar invested up to a cap decided by each firm. She believes employees shouldn't consider a Roth individual retirement account, that new non-deductible retirement vehicle offering tax-free income in the future, until after they've hit the $10,000 pre-tax match on their 401(k) at work.

"There should be a minimum of eight fund choices in a company's 401(k) and not many more than that, since investors should stick to basics," advised Edward Foster, director of research for Fabian Invest Retirement Services in Annapolis, Md.

For example, Scarborough Retirement Services has an alliance with 2.7 million-participant Met-Life, as does another provider called 401(k) Forum that offers investment advice on the Internet. Participants pay a flat annual fee for access to their own retirement adviser.

About 15 percent of 401(k) participants have outstanding loans. Most plans permit you to borrow as much as half your vested account balance, up to $50,000, at reasonable terms. "We're vehemently against borrowing against a 401(k) plan primarily because it means investment opportunity is lost," concluded Evans.