The Capital Accumulation Ratio as an Indicator of Retirement Adequacy

Yao, Rui; Hanna, Sherman D.; Montalto, Catherine Phillips

Download This Paper

Open PDF in Browser

Add Paper to My Library

The Capital Accumulation Ratio as an Indicator of Retirement Adequacy

Journal of Financial Counseling and Planning, Vol. 14, No. 2, 2003

11 Pages Posted: 4 May 2013

See all articles by Rui Yao

Rui Yao

University of Missouri at Columbia - Department of Personal Finance Planning

Catherine Phillips Montalto

Ohio State University (OSU) - Department of Human Sciences

There are 2 versions of this paper

Date Written: 2003

Abstract

The relationship between meeting the Capital Accumulation Ratio Guideline and retirement adequacy was investigated. About 63% of the households had a consistent relationship between meeting the 25% ratio guideline and being adequately prepared for retirement, with 46% of households both meeting the 25% ratio guideline and being prepared for retirement and 17% not meeting the guideline and not being adequately prepared for retirement. However, 37% of households did not have a consistent relationship. Meeting the 25% ratio guideline does not appear to be an accurate indicator of retirement adequacy. The 25% guideline was a better indicator than the 50% guideline.

Keywords: Retirement adequacy, Financial ratios, Capital accumulation ratio, Investments, Survey of Consumer Finances

Suggested Citation: Suggested Citation

Yao, Rui and Hanna, Sherman D. and Phillips Montalto, Catherine, The Capital Accumulation Ratio as an Indicator of Retirement Adequacy (2003). Journal of Financial Counseling and Planning, Vol. 14, No. 2, 2003, Available at SSRN: https://ssrn.com/abstract=2260472