Josh Cohen , CFA, is the defined contribution practice leader for Russell Research.


Discussion

Anthony from NY posted over 4 years ago:

Josh Cohen has an fascinating article on allocations during retirement. However, I would like to see some examples in graphical form showing how sample glide paths change over time during retirement. Also, the discussion changes from a 6% withdrawal rate to a 4% rate. Confusing, to say the least. Granted, the Investor Professor tried to clear things up a bit, but clarity overall was poor, IMHO.

Does Mr Cohen have a more complete exposition of the glide path construct with more complete examples? I'd love to see it.


Richard from MT posted over 4 years ago:

To complete his published article "Allocation in Retirement...," Josh Cohen must furnish a definition that his writing omits (AAII J, July, 2010, p. 10). In Figure 1 he plots expected ending wealth along the y-axis and another variable on the x-axis. But nowhere in his figure or article does the writer define this latter variable, which he calls "Shortfall Risk (Square Root of Penalized Shortfall)." Pray tell us what a penalized shortfall is and how to calculate it. Lacking this information, Mr. Cohen's work is an unfinished symphony.


John from NJ posted over 3 years ago:

This article might be helpful after extensive re-writing, starting with the graph. The graph displays one curve (described as "flat" even though it is upward sloping), and five data points below the graph. Where are the 5 downward sloping glidepaths described in the figure legend? Single data points do not define "slopes."

It appears that nothing has been done to alleviate the confusion described by the 2 previous reviewers (Anthony and Richard) since their posts 8 months ago.

I suggest the editors stop featuring this article on the AAII homepage until the corrections are completed.


Robert Jarvis from GA posted 10 months ago:

Interesting article. After reading the tricky Fig. 1 discussion a couple of times, I realized the 32% equity allocation was a close approximation of the 35% equity allocation I adopted over my first 4 years of retirement beginning in 2008. The 65% fixed income part consists of short term treasuries, target date corporate bond funds (investment grade and high yield from Guggenheim), CDs, and cash. Equities are approximately 75% dividend paying large cap stock mutual funds, 22% individual stocks ranging from Costco to Organovo (3D bio printing), and 3-4% is allocated to gold and silver - just in case. My net worth has increased more than inflation during this time while maintaining the retirement income I want. So, anecdotally, his recommended flat allocation has worked for me so far and spared me the constant adjustments which most people will not do anyway.


Jeff Kozimor from OR posted 9 months ago:

I concur with comments above. This article is confusing/ lacks clarity and to have it available to members is a waste of their time. I retire in a month and have no clue how anyone could calculate a glide path to be useful or what message the author is trying to help investors with?


Sorry, you cannot add comments while on a mobile device or while printing.