Most everyone with a 401(k) has a limited suite of funds to pick from. That doesn’t mean that you should settle for inferior results. You deserve a 401(k) that will provide the returns that allow you to retire comfortably without leaving you open to huge risks — or the need to continue working into your ‘90s.

The most common 401(k) mistakes I see are these:

• Getting boxed into index funds that barely match the market, let alone beat it.
• Buying into “target” funds that, while designed to reduce risk as you approach retirement, increase the risk of anemic returns that will leave you shy of your goals.
• Investing in funds with multiple managers that are run by committee without a clear strategy 

These missteps may not flush all your retirement funds down the drain, but they will severely limit the returns on your hard-earned 401(k) contributions. That could leave you with less money than you’re planning on, forcing you into an austere retirement or a longer working life.

With that in mind, here are five toxic funds to kick out of your 401(k) because putting money into them violates at least one of the three rules above. I’ve highlighted them in part because they are fairly widely held — but you can apply the examples to other funds that may be in your own 401k plan.

Toxic Fund #1 – T. Rowe Price Retirement 2025 Fund (TRRHX)

As a rule, so-called “target funds” are a bad idea for your 401(k). These all-in-one funds include gobs and gobs of stocks and bonds, giving you an over-diversified mash-up of investments while gradually reducing your allocations to stocks each year under the guise of lowering your risk and protecting your retirement. The fundamental flaw is that those folks who want to retire early — or, god forbid, plan on living a long time after they quit working — may not have enough cash to retire comfortably thanks to the overly cautious approach taken by these “target” funds.

These funds faced a storm of criticism for weak and unpredictable results in the bear market and things have gotten so bad that the Labor Department is said to be preparing an investor “alert” on target-date funds forrelease later this spring.

T. Rowe Price Retirement 2025 (TRRHX) is a common 401(k) option right now; since the fund’s allocations are based on a target retirement age of around 65, workers who are 45-55 right now might consider this a good choice for their 401(k). Remember, though, that while the fund has outperformed the broader market recently (during a period when just about any allocation to bonds or cash has helped performance) it will drastically dial down risk-taking as the years go by. That means you can expect to underperform the market as the target date approaches. Take the T. Rowe Price Retirement 2010 (TRRAX)  fund that is now in its most conservative years. While it’s up about 77% from the March, 2009 lows, that’s compared to a 80% gain in the S&P 500.

This sort of finish should hold true for all target funds, whatever the date, and even if your target fund is from another provider, say the Vanguard Target Retirement 2025 (VTTVX). The bottom line is that these funds may keep pace with the market for a time, but limp across the finish line. There are better ways to protect your portfolio.

Toxic Fund #2 – Vanguard Explorer (VEXPX)

I always tell investors that when you decide where to allocate your 401(k) cash, you’re buying the manager as much as the fund. That’s because the same stated strategy can have very different results depending on who is running your fund. As I like to say, it’s the person pulling the trigger on the buys and the sells that makes the difference.

For this reason, multi-manager funds are very bad options for your retirement cash. With too many cooks in the kitchen, these funds can often be a mishmash of ideas without a clear strategy or a clear goal to grow your retirement funds.

Vanguard Explorer (VEXPX)  is a good example of this, boasting seven different managers. Each manager runs a different slice of the fund, so there’s no overall portfolio direction. And Vanguard Explorer’s portfolio contains more stocks than Vanguard’s small-cap growth index fund. What’s that about? With seven cooks in the kitchen, this is one of the worst examples of multi-managed mayhem.

While VEXPX has managed to perform slightly better than the market this past year — tallying returns of about 60% (less disbursements) compared to about 53% for the stock market — it’s underperformed your basic small-cap growth index fund significantly over the long term. The Explorer fund is up 30% over the past 10 years, while the Vanguard SmallCap Growth Index (VISGX)  is up about 60%. As the market is becoming more selective, the muddled strategy of VEXPX is way off target.

Click “next” below to get the next three “toxic funds” for your 401(k) portfolio.

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Toxic Fund #3 – Fidelity Spartan 500 Index Investor (FUSEX)

As I mentioned earlier, index funds are a typical pitfall for 401(k) investors, who are often told that rather than trying to beat the market they should just “be” the market. Unfortunately, a mutual fund can’t just magically follow the ups and downs of the stock market. There are trading fees, operational expenses — and yes, even salaries to be paid to “managers” despite the fact that these are considered passively-managed funds.

A concrete example of an index fund that is toxic to your portfolio is Fidelity Spartan 500 Index Investor (FUSEX), which is pegged to the S&P 500 index . Fidelity itself admits that “Since an index fund will generally hold all of the component securities of the index, in theory the fund will lag behind the performance of the index by its expense ratio.” That’s a nice way of telling you that your fund will always return less than the index on which it is based.

It’s worth noting that Fidelity Spartan has managed to pace the market in recent months. Over the past year, the Spartan 500 fund is up about 49.7% — in lockstep with its benchmark index. But don’t be fooled by its performance. The market’s dramatic rebound in the last 12 months produced enough return that the fund’s costs didn’t make much of an impact. When the market is moving up gradually at 10% a year — or losing ground — the fees will start to take their toll. You can apply this rule to nearly all indexed funds.

Toxic Fund #4 – Vanguard Long-Term Bond Index (VBLTX)

Here’s one very specifics mistake people are making in their 401(k)s right now — sticking with, and even buying more, of long-term bond funds.

While long-term bond funds may have decent yields, the risk remains high in funds like Vanguard Long-Term Bond Index (VBLTX) . Just check out the long average maturity and duration of the fund’s portfolio. Investors got a taste of this fund’s volatility a few summers ago when it dropped 10.0% in two months and took eight months to recover that loss. In the latest bear market, it dropped 11.9% over seven months and took two months to recover. That’s a lot of volatility for what many include in portfolios because they view bonds as relatively safe, stable investment.

As long as interest rates remain low and long-term bond funds remain volatile, I recommend putting your money somewhere else.

Toxic Fund #5 – Vanguard LifeStrategy Conservative Growth (VSCGX)

Much like multi-managed mutual funds that fail to follow a clear strategy, “funds-of-funds” can also be bad news for your 401(k). By spreading your money around a bunch of different funds and adjusting the mix regularly, it’s hard to really capitalize on the best parts of the market, and it’s easy to see some of gains eaten up by expenses.

One breed of these are life cycle funds — and it’s hard to cite just one from the many firms’ lackluster examples. They’re all pretty bad. But Vanguard funds are my primary area of expertise, so I’ll name Vanguard LifeStrategy Conservative Growth (VSCGX) . On average, it puts a little over 40% in equities and the rest in bonds. Vanguard says it’s best for investors in their early retirement years, but I think the allocation to equities is way too low and makes no provision for your other investments or assets.

It’s this misallocation that has held back the fund lately, as it has returned a measly 27% over the past year — about half what the broader market has seen. Don’t put your portfolio on autopilot with “funds-of-funds” picks like LifeStrategy funds, or you may not get where you’re going.

When Your Next 401k Statement Arrives…

While each of these funds I named deserve the boot from your 401(k) plan, it’s more important to understand the big picture. I tried to cover the three horsemen of 401ks — Vanguard, Fidelity and T Rowe Price — but your employer’s retirement program may not offer any of these specific funds.

That’s why I want you to remember the mistakes I mentioned when looking at your next statement. As a rule, indexed funds, “target” funds with a specific retirement date and multi-managed funds are not going to deliver the returns you deserve.

And one final word of warning: Remember that your mutual fund company by law isn’t able to give you investment advice, and the folks running your benefits department aren’t investment experts.

Often, the investment options you find in your retirement plan are there because someone with a vested interest that’s different from yours made the choice. It’s up to you to get your benefits manager to see the light of day and to give you access to great funds and great managers.

It’s important for you to take charge of your 401(k) and actively seek out the best investments. As I said before, it’s your money — it’s up to you to make the most of it.

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• 7 Mutual Fund Mistakes to Avoid