The Capital Accumulation Ratio as an Indicator of Retirement Adequacy
11 Pages Posted: 4 May 2013
Date Written: 2003
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
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