Editor's note: Optimizing your retirement account doesn't need to be overwhelming...

When you start setting money away, there's a lot to keep track of. It can often feel confusing for novice investors. But as Income Intelligence editor Dr. David "Doc" Eifrig says, you can't trust others to look out for your nest egg.

That's why it's so important to take control of your financial future...

In today's Masters Series – originally from the May 2 and 3, 2016 issues of Doc's free Health & Wealth Bulletin e-letter – Doc shares three keys that can help you expand your retirement account... explains the trick Wall Street uses that can cost you thousands of dollars per year... and details the type of fund that offers the lowest cost and the best performance...

Three Simple Tools to Boost Your 401(k) by Six Figures

By Dr. David Eifrig, editor, Income Intelligence

Investing for retirement is difficult...

Keeping a constant eye on the markets, studying economics, staying on top of every trend without a misstep... that's time-consuming and confusing.

Worse, a lack of guidance, poor websites, and limited investment options make most individuals' first foray into investing overwhelming.

But you can't hide from it. No one is going to rescue your retirement for you.

The good news is it doesn't have to be so tough. Yesterday, I shared some of my favorite ways to stretch your money in retirement. And as you'll see today, there are just three keys to understanding your retirement account.

Learn these, and you will truly change your quality of life in your retirement.

There are three big things you need to earn an extra six figures in your retirement plan...

• Asset allocation

• Low fees

• Index funds

Let's start with asset allocation...

Asset allocation means how you divvy up your capital among several categories of assets. Changes in the market get smoothed out by the diversified nature of your portfolio... leaving you to sleep well at night.

The key is doing it from the start and sticking to it.

First, you should set aside some cash for emergencies... Then, start with a simple allocation: Decide between stocks and bonds. If you have a longer-term view and a high tolerance for risk, you might make your allocation 80% stocks and 20% bonds. If you are closer to retirement and don't like volatile returns, you could do 30% stocks and 70% bonds.

Most of us fall somewhere in between those extremes. The typical advice suggests using a "middle of the fairway" asset-allocation plan: 60% stocks and 40% bonds... but we think the math on that is changing as the market evolves.

The point is to combine assets, like stocks and bonds, that are not perfectly correlated (meaning their price movements are not closely related to each other). Blending them in a portfolio smooths out your total returns.

As you get closer to retirement, you can adjust your allocation to match your risk tolerance.

Once you are comfortable with that basic stock-bond allocation, you can start to get more complex, dividing your categories among, say, domestic and international stocks. Or you can divide your bond allocation among corporate, federal, and municipal bonds. You can also add a small allocation to precious metals, or what I call "chaos hedges."

The better you understand asset allocation, the easier it is to get higher but safer returns, and avoid crashes in your portfolio.

That's Step 1. With allocation, we've protected your portfolio from deep swings and ensured you'll have money until the end.

Next, let's get into the nitty-gritty of fixing your retirement account.

Hidden fees pervade the financial industry...

For example, the fees on fund investments always look small to the untrained eye. A mutual fund can easily charge 2% to 3% of assets without looking too expensive.

When the percentages are that small, it can seem like it's not worth your time to fret over fees.

Don't fall for this Wall Street trick...

Remember, these aren't one-time fees. It's a 2% hit every year. Over time, that 2% adds up substantially. And it's particularly egregious considering you can easily find funds with fees as low as 1%, or even 0.25%.

Even more troubling, each year you pay a fee, you lose decades of compounding that would grow on top of that money.

The results add up...

Consider an investor who saves $5,000 a year, earns 8% in returns on investments, and pays a 2% annual fee. Over 40 years, he amasses $786,000.

If he cut that fee to 1%, he would finish with $1,045,000.

Think of how hard you work to save $5,000 every year for 40 years. It's not easy. No matter how much you earn, life gets expensive. Over all that time, you set aside $200,000.

But here's the catch: You can earn an additional $259,000... by just spending five minutes controlling the fees on your funds.

That's easy money.

Step 2 of boosting your 401(k) is figuring out what fees you're paying... and lowering them if possible. You should be able to get your fees to less than 1% if your retirement account has reasonable options.

And you can do even better than that.

Skeptics might wonder... When we switch to cheaper funds, aren't we going to get worse performance? Don't bargain prices mean bad funds?

Nope. The truth is the exact opposite...

This is Step 3: Picking the right funds.

The cheapest funds in the game are index funds.

Index funds don't have a Wall Street trader behind them, trying to outcompete everyone else and beat the market. (The majority of these "smart guys" fail.) Rather, index funds follow simple rules designed to help them track the overall performance of a particular asset class, like U.S. stocks or Treasury bonds.

Most "actively managed" funds (those with a manager trying to pick the best stocks) underperform the market year after year. In fact, 96% of actively managed mutual funds fail to beat the market over a sustained period.

That means you don't have a 50-50 chance of picking a "good" fund or a "bad" fund... It hardly even matters which one you pick. The vast majority are bad and won't beat the market.

On the other hand, index funds don't need to pay superstar managers or an army of analysts. Ironically, they keep costs extremely low and provide better performance.

Investors are finally catching on. The index-fund industry is growing...

In 2015, Vanguard's Bond Index Fund surpassed PIMCO's Total Return Fund as the largest bond fund in the world.

Vanguard's low-fee index fund offerings and Fidelity's "Spartan" brand of index funds are great places to start. (As a side note, while at Goldman Sachs, I helped Fidelity set up its Spartan funds decades ago. My group spent time teaching it ways to use derivatives to streamline its money-management processes.)

It's likely your plan offers a few mutual funds that track an index.

By following these three simple steps, you can fix your retirement account and boost your lifetime returns by hundreds of thousands of dollars... in just a few minutes.

Take the time to review your 401(k) today with these three steps in mind... It will be the easiest money you make in your entire life.

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig

Editor's note: Doc says understanding how to maximize your 401(k) is a key way to take control of your retirement. But there's something else he says you must do to protect your finances...

According to Doc, the COVID-19 pandemic accelerated a wealth-depleting trend that was already taking place... and the next few months could determine what happens to any gains you've made during this decade-plus bull market.

On Wednesday, June 23, at 10 a.m. Eastern time, Doc is hosting an urgent "wake-up call" to reveal what he sees coming in the market... and how to protect your money. Plus, he'll reveal a moneymaking strategy that he has never shared publicly – until now. Reserve your spot for free here.