The Savings-to-Employment Income Ratio is a litmus test for estimating the health of an investor’s retirement savings and requires only a few pieces of information to calculate.
The paper, “When the Destination is Retirement: A Way to Keep Investors’ Plans on Track,” written by Noelle Fox, senior investment and product analyst at The Principal, is intended to help financial professionals use the litmus test to its fullest capacity. It analyzes the parts of the Savings-to-Employment Income Ratio and offers suggestions as to what investors can do to change the factors in their control, such as:
- The savings rate
- The age at retirement
- The income replacement ratio
“This paper provides resources for financial professionals to help investors evaluate how well they are doing in saving for retirement and possible ways to revise their strategy so they have more confidence about their financial futures,” said Drew Denning, vice president of the retiree services division at The Principal.
The white paper can be read here.