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What’s Your Number? The Asset-Salary Ratio and Individual Financial Security
Speaker: P. Brett Hammond
The workplace of the future is already here in that public and private employees are increasingly required to manage their own lifetime financial security. For example, the defined benefit plan is out or on the way out nearly everywhere, especially the federal government, leaving employees largely on their own with major decisions that will profoundly affect their future post-government income. In light of the individual responsibility involved, how can employees manage their own nest eggs? In light of all the recent market gyrations, how can they know at any moment in time whether their savings and investment plan is on track to fund an adequate retirement income? The Asset-Salary Ratio – a simple, but surprisingly sophisticated measure – is solidly grounded in theory and research and individuals can use it to manage their long-term savings toward an adequate retirement income. The idea, its practical applications, and some easily understood evidence will be presented to show how this measure can be used by any employee to track and manage their progress, as well as tie into corrective actions.
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