Editor’s Note: Welcome to the inaugural issue of 401k Millionaire. This newsletter focuses on the booming US 401k plan market, which holds about $3.56 trillion in investable assets. But more than anything, this quarterly advisory is dedicated to providing you with the specific, actionable advice that you need to achieve a comfortable retirement. Let’s get started. And please don’t hesitate to provide us with feedback and questions. We’re here to serve you. — Brian O’Connell

Planning for retirement isn’t a sprint, it’s a marathon. With time on your side, you can afford to be more aggressive. If you’re late to the party, things get a lot tougher. The key? There are two of them, actually—planning and execution.

That’s where this advisory comes in. As part of my ceaseless effort to better serve readers, I like to answer pressing inquiries regarding 401k plans. In this article, I review the 401k plan of a female reader and provide a complete “fund makeover” for her. You’ll find my approach instructive for your own retirement needs.

Name: Dianne T.

Age: 30

Occupation: Insurance company claims adjuster

Retirement Goals: “First, I want to take care of college funding for my twin six-year-old sons. I don’t know if it’s wiser to save separately for college or to borrow money from my 401k plan. I hope to retire comfortably by age 60 or 65.”

401k Assets: $15,000

401k Portfolio Asset Allocation:

• one third aggressive growth fund
• one third growth and income fund
• one third long-term US Treasuries

Additional Comments from Dianne: “I just started investing in my 401k two years ago after my divorce. I wanted to be sure I had something put away for my future. I’m really happy and surprised my money is growing even in the short time I’ve been a 401k investor. I plan on keeping it up.”

My Take: They say knowing what your goals are constitutes a big step in getting where you want to be financially. So that takes care of your first step.

The next step is putting as much money as you can afford into your tax-deferred 401k. After that, you need to be more aggressive with your investments. College costs rise well ahead of the rate of inflation every year—you can count on that.

The question is, will you be able to afford it? With Pell Grants, student loans, state colleges, and so on, you may get some much-needed help. So rather than borrow from your 401k, aim for getting all the “free” money you can from scholarships and grants, and finance the rest through a government-sponsored student loan.

Your portfolio should look like this:

• 40 percent aggressive growth fund
• 20 percent international stock fund
• 20 percent large-cap growth fund
• 20 percent small cap growth fund

Note: These four funds represent the stocks component per these suggested allocations.

At this stage in your life, you should take on more risk in your 401k. If your portfolio takes a sharp turn for the worse when you’re in your 30s, you still have plenty of time to bounce back.