Written By: Rui Yao, Sherman D. Hanna and Catherine P. Montalto
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 relat ionship. Meeting the 25% ratio guideline does not appear to be an accurate indicator or retirement adequacy. The 25% guideline was a better indicator than the 50% guideline. Key Words: retirement adequacy, financial ratios, capital accumulation
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