The Capital Accumulation Ratio as an Indicator of Retirement Adequacy

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

The Capital Accumulation Ratio as an Indicator of Retirement Adequacy

Yao, R., Hanna, S. D., & Montalto, C. P. (2003). The capital accumulation ratio as an indicator of retirement adequacy. Journal of Financial Counseling and Planning, 14(2), 1-11.

11 Pages Posted: 3 Mar 2016

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). Yao, R., Hanna, S. D., & Montalto, C. P. (2003). The capital accumulation ratio as an indicator of retirement adequacy. Journal of Financial Counseling and Planning, 14(2), 1-11., Available at SSRN: https://ssrn.com/abstract=2740159