Factors Related to Meeting the Capital Accumulation Ratio Guideline
DOI:
https://doi.org/10.61190/fsr.v11i2.4729Keywords:
Retirement adequacy, Financial ratios, Capital accumulation ratioAbstract
The capital accumulation ratio, investment assets divided by net worth, has been proposed as a useful indicator of financial health. Various experts recommend a minimum value of 25% to 509c for the ratio. When certificates of deposit are not counted as investment assets, 56% of U.S. households meet the 259c guideline and only 40% meet the 50% guideline. In a multivariate logistic regression, education, income, number of years until retirement, overspending, and financial risk tolerance are positively related to meeting the guidelines.
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