Many older workers are mismanaging their 401(k) plans by investing too heavily in company stock, according to Financial Engines, a Palo Alto, Calif.-based financial consulting firm.

In a study of nearly a million retirement portfolios from 82 plan sponsors, researchers found that employees over 60 were more likely to have a larger share of their plans invested in company stock. Plans that invest heavily in company stock tend to generate less retirement savings, compared to more diversified plans, researchers said.

Jeff Maggioncalda, president and CEO of Financial Engines, said that despite the economic downturn many employees underestimate the risk of relying on company stock for retirement income.

"Unfortunately, the older employees holding the highest amounts of company stock have the least amount of time to recover if their company's stock happens to take a hit," he said in a statement.

The study also found that employees in 401(k) plans with salaries below $25,000 were more likely to make investment mistakes than higher-earning employees. They also weren't saving enough to receive a full employer match.