I Am the General of My Retirement War Plan

Throughout history, as we look at commanders who have been successful in combat, we often see that they are able to combine multiple facets of war to achieve their goals. From kings who used archers, cavalry, and foot soldiers in ancient times to modern generals who find success with the use of artillery, armor, and infantry, these leaders often used a combination of military tools and techniques to win battles -- in essence, you could say they diversified their military portfolios.

Like any long lasting war, our retirements are made up of a combination of battles to be fought on different fronts, with different weapons, and in different ways. We are therefore the "generals" of our retirement wars, left to delegate certain aspects to our financial officers or to make the tough calls ourselves, deciding which assets to chance on the battlefield, analyze the risk to these assets, and what are our chances of success.

As a general in my own particular retirement war, here is my order of battle and the units I plan to utilize when it comes to how I fight it.

My Infantry

In battle the infantry are often the stabilizing force among the army ranks. They do the dirty work, take the brunt of the enemy attacks, are down in the trenches holding the front line, have the often tedious task of building defensive works, and are often the bulk of the fighting force.

In my retirement war analogy, the infantry forces of my retirement savings might be considered the safer, less exciting aspects. Things like savings accounts, checking accounts, money market accounts, cash, and similar safe investment options could be the funds doing my tedious financial work. They aren't necessarily exciting or glamorous, but they are an essential aspect of the retirement war, and without them I could easily and quickly find myself in a losing battle.

My Artillery

The artillery of an army can be essential to both the effectiveness of the force both in attack and defense. The weakness of artillery however comes into play when it is not properly defended. It is the slow moving heavy hitter that is highly effective at long range but easily susceptible to the enemy in close quarters.

In retirement, my artillery might be things like bonds or certificates of deposit. Such items can be highly effective at growing my money over the long term, but are susceptible to attack by an enemy known as inflation. Therefore, I tend to provide a covering force known as inflation protected government bonds to help protect my retirement finance artillery.

My Armor

In Roman times it was the chariot. In the days of Hannibal , it was the elephant. In medieval times, a knight in shining armor on his horse. In modern times, the tank. Throughout history, civilizations have had their own version of heavy armor. They were the heavy hitters. The force that could break through an enemy line, strike fear into the hearts of their opponents, and exploit gaps in enemy forces. However, because of the large amounts of energy needed to fuel these fighting forces, they were often only good in the field for short periods of time. They were brief spurts of extreme and deadly force that once out of fuel, were largely worthless and just made for big sitting targets.

I consider my retirement finance armored forces as my stocks and retirement accounts. These are my heavy hitters -- my chance for big returns in my investment portfolio. However, if their fuel (the economy and stock market) begin to falter, they can become large, and in an investor's case, costly targets.

My Reserves

Just about every army has its version of secret weapons or its reserve force. In my financial armory, I hope to be able to count upon a few tricks up my sleeve as well. While my reserve force might not be too reliable, I hope that social security comes charging to the rescue as I enter retirement. I look at social security as a type of mercenary reserve force. I've paid for it, and I am counting on it to help my fight my retirement battle, but whether it actually comes through for me or not has yet to be seen.

More from this contributor:
Estate Planning: Getting My Affairs in Order
Potential Pitfalls of Retirement
Early Retirement: Will You Be Ready?

Disclaimer: The author is not a licensed financial or retirement professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is at the reader's discretion.