The 401(k) may well be the best investment tool ever for building long-term wealth, so I'm always surprised by how many people don't take full advantage of it.

They make a few snap decisions on a hectic first day at a job, hand in the paperwork, and they're done.

Big mistake!

A casual "hands off" approach like this could cost you literally hundreds of thousands of dollars by the time you retire. And that's nothing to sneeze at!

Is it time to take a second look at your 401(k)? Here are seven ways you can maximize your retirement savings starting right now—even if your plan only offers a few investment options.

You'll be amazed by the difference it can make!

1. Start investing for retirement.

   There's no time like the present to start investing. That's especially true now that the new tax law has increased contribution limits for 401(k) plans and other tax-deferred plans. But so many workers put off starting to invest till "later"—after the car is paid off, after the kids finish college, after the new house is purchased. The amount of time that you have money invested works in your favor—almost overshadowing the particular investments you choose. This is particularly important in your 401(k) account, since you are investing tax-deferred.

2. Use only the best funds available to you.

   While most employers provide a limited selection of funds from which to choose for your 401(k) plan, you should not just put a percentage into each available fund. That's not what we mean by diversification. Depending on the length of time till you retire, you likely want to invest most of your 401(k)plan dollars in stock mutual funds, and maybe a little in bond funds. It's rare that money market funds or guaranteed investment contract (GIC) funds are appropriate for 401(k) plan choices. Yet every plan has one.

3. Get your employer match; but even if there is no match available, invest anyway.

   Many employers match a certain percentage of your 401(k) contributions. This is FREE MONEY. You can't do better than that. But even if your employer doesn't "match" contributions, you will still benefit from participating in a 401(k) program—because your paycheck will be reduced by the amount of your 401(k) contribution BEFORE you pay taxes on your salary. The government doesn't see that money, but you will!

4. Check out the managers of your funds.

   Many people will look at past performance of a mutual fund before placing any of their 401(k) dollars there. But only a few look to see if the manager of that fund is still managing it. One of the special things I do for the funds I follow is look carefully at the record of the current manager—and that of the funds the manager has overseen—and how the manager has performed for you. You should pay attention to this, too.

5. Check out the fund's holdings.

   You might have seen a particular stock taking a jump recently. You feel awful, saying "I should have bought that stock." But do you know you might already be a stockholder? Many top Vanguard mutual funds—available in your 401(k)plan—may hold some of the stocks at the top of your list. I can let you know which Vanguard funds have the best holdings in various sectors.

6. Don't take on too much unnecessary risk.

   While most 401(k) investors may be too conservative in their choices, some of you may be too aggressive. The key is proper allocation among the funds available to you. I categorize all the Vanguard funds so you can see if you have too much money allocated to "aggressive growth" funds.

7. Don't use a certain investment strategy just because "everyone else is doing it."

   Remember: Rules on investing vary from plan to plan. And most of all, you should invest based on your own specific needs. Investment strategies are unique and differ based on investors' goals for retirement, age, size of family, funds available to invest, etc.

Consider this: if you had opened a retirement account at Vanguard with, say, $100,000 in 1991, (the year Dan Wiener started publishing Independent Adviser for Vanguard Investors), your portfolio would have grown to $409,061 by the end of 2007. Not bad. But by following Dan's Growth Portfolio recommendations, you would have turned that same $100,000 into $966,083. That's $557,022 MORE! You would have earned a 144% ADVANTAGE over the average Vanguard Investor. Don't settle for average profits when you can do so much better. Click here to learn more about how you can try The Independent Adviser risk-free.

For more great retirement advice, check out our Retirement Section. Looking for top retirement tax strategies? We've got them. Want to make sure your portfolio is insulated from the volatile market? Find out how to shock-proof your retirement here. Whether you're in retirement, close to retiring or hope to be there someday, you'll find all the tips, tools and advice you need to reach your retirement goals.