There's no denying that putting money in a 401(k) is one of the most effective ways to save and invest for retirement. However, you may not realize how much more efficiently you can use your 401(k) by being slightly more hands-on.

One drawback of a 401(k) plan is that you have limited investment options. Unlike an IRA, whereby you can invest in any individual company or exchange-traded fund (ETF) you want, a 401(k) provides you with limited investment options. For most plans, this includes company stock, index funds based on different market caps, and target-date funds.

Target-date funds are funds put together based on someone's projected retirement year. For example, "Fund ABC 2045" would consist of an investment mix that the fund manager deems appropriate for someone planning to retire around 2045.

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Source Fool.com