Factors related to meeting the capital accumulation ratio guideline
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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 50% for the ratio. When certificates of deposit are not counted as investment assets, 56% of U.S. households meet the 25% 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.
Factors Related to Meeting the Capital Accumulation Ratio Guideline Rui Yao; Sherman D Hanna; Catherine P Montalto Financial Services Review; Summer 2002; 11, 2; ABI/INFORM Global, pg. 153.