Dirk Cotton Blog | Talkmarkets | Page 1
Independent Financial Services Professional
Contributor's Links: The Retirement Café

Dirk Cotton is a retired executive of a Fortune 500 technology company. Since retiring in 2005, he has researched and published papers on retirement finance, spoken at retirement industry conferences and events, and regularly posted on retirement finance issues at his blog, ... more

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Life Cycle Economics And The Safety First Strategy
Why should you care about life-cycle economics? It is a theoretical model of retirement finance and a decision-making framework that can serve as a guideline for answering our retirement finance questions.
Some Reading While We Wait
Staying home is a pain but it does have an upside. It creates an opportunity to catch up on reading and perhaps gain a new perspective. The following are some excellent columns and one video that may help pass some of that time profitably.
End-of-Year Thoughts On Retirement Planning
Here are just a few thoughts I want to share about steps you might want to take for a year-end review.
Remember Inflation?
Although stocks are commonly referred to as an inflation hedge, they are not truly a hedge because real equity returns are not correlated with inflation.
EC The Mystery Of Dividend Preference And The 'Spend Dividends Only' Strategy
A good many retirees seem to be enamored with the "Spend Interest and Dividends Only" strategy for spending down their retirement savings.
Take Your Best Shot At A Retirement Plan
I've been retired for more than a decade and I'm often asked about my biggest retirement regret. It's an easy call for me. I most regret retiring with an inadequate understanding of the risk I was taking.
My Year-End Review And Planning Regime
I am frequently asked how I manage my own retirement finances. So here goes...
EC Mean Reversion Of Equity Returns And Retirement Planning
Long-term mean reversion would act like a spring returning prices back to a trend line when they advance above that trend or fall below it.
Probability Of Ruin In Pictures
Probability of ruin is typically used in retirement planning to estimate the probability that a retiree will outlive her portfolio based on some set of assumptions such as a fixed planning horizon (often 30 years).
The “Future” Of Retirement Planning
When we decide how much money we can spend in the present year of retirement we need to know not only how much spendable wealth we have today but our best guess of how much we will have in the future.
The Pros And Cons Of Bucket Strategies
The basic implementation of time segmentation strategies sets aside enough cash and short-term bonds to cover the next few years of retirement expenses
EC Unraveling Retirement Strategies: Variable Spending From A Volatile Portfolio
Variable-spending strategies are similar to constant-dollar strategies in that they spend periodically from an investment portfolio but differ in that they spend a periodically updated amount based on portfolio performance.
Unraveling Retirement Strategies: Constant-Dollar Spending (4% Rule)
SWR strategies are based on the assumption that future market returns will be similar to historical returns but there is a lot of reason to believe they will be lower in the future.
Will The Market Go Up Or Down From Here?
Stocks took 25 years to recover from the Great Depression and 16 years to recover from multiple financial crises beginning in 1963. It took only six years for the market to recover from the 2007 sub-prime mortgage crisis.
Unraveling Retirement Strategies: Floor-And-Upside (An Update)
The basic idea behind floor-and-upside is that a retiree devotes some retirement funding assets to building a lifetime income stream and the remainder to an investment portfolio to provide liquidity and the possibility of increasing wealth over time.
The Return You Need
One of the most common mistakes I see retirees make is looking at a good return on a nearly risk-free investment and concluding that they would do better in the stock market because it has a higher long-term average return.
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