At age 20, you could start with 100% S&P index. Then, each year, subtract 2% from the S&P index, and move it to a (mixed) bond index fund. For example:
20: 100% 0%
21: 98% 2%
22: 96% 4%
etc, until you reach age 70, it will be 0% stock and 100% bond. However, this is may actually be too conservative: if you switch everything to bonds before or soon after you retire, you reduce your return too much -- lowering your sustainable withdrawal rate.
You have to find your comfort level at both the beginning (when you start saving) and the end (your life expectancy), and then implement a transition strategy. You can use a life-cycle fund for guidance: look at the ones that match your expected retirement date, and read the prospectus: they will tell you their transition strategy.
This is an easy strategy to manage: every year, re-balance the funds to your desired target for that year. In good years, you'll move stocks to bonds and in bad years, you'll move bonds to stock. If you prefer, you can do it more often, like every 3 or 6 months. My 401(k) administrator will do it automatically, although they won't change the allocation each year.
If you are using an S&P index fund and a mixed bond index fund, you would already be well diversified. If you want more, use a "Total Market Index" fund, which is usually based on something like the Russell 2000 or Russell 3000. The important part is to look closely at the management fees -- they should be very low, as it's not much more than a computer program that closely matches the index. Vanguard is famous for low-cost index funds, and you will usually find them (or one's like it) offered by your 401(k).
Thank you very much for the extra detail. Sounds like a sensible approach to me.