Yao, Hanna, Montalto retirement adequacy

Financial
Counseling and Planning

The Journal of the Association for Financial
Counseling and
Planning Education

Volume 14 (2), 2003

The Capital Accumulation
Ratio as an
Indicator of

Retirement Adequacy

Rui Yao[1],
Sherman D. Hanna[2],
and Catherine P. Montalto[3]


 

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


[1] Rui Yao, Assistant Professor,
Human Development, Consumer & Family
Sciences, South Dakota State University, NFA 311, Box 2275A, Brookings,
SD
57007,  phone: 605-688-5009 
fax: 605-688-4888  e-mail 
rui_yao@yahoo.com.

[2] Sherman D.
Hanna, Professor,
Consumer Sciences Department, The Ohio State University, 1787 Neil
Avenue, Columbus, OH 43210-1295,  e-mail: hanna.1@osu.edu.

[3] Catherine P.
Montalto,
Associate Professor, Consumer Sciences Department, The Ohio State
University, 1787 Neil Avenue, Columbus, OH 43210-1295, 
phone 614-292-4571 fax 614-688-8133 e-mail montalto.2@osu.edu.