Patent ID: 8732050

Claim:
A computer-implemented method for generating a recommended a control action policy in a multi-year planning setting, the method including: electronically retrieving expected returns and variances of diversified portfolios that are characterized by risk taking levels, wherein the expected returns and variances are a function of the risk taking levels; setting up a computer-solvable problem, including assigning an evaluation grid spanning and subdividing at least a time horizon including before and after retirement, potential resource values available for spending to satisfy an investor's essential and non-essential goals, a range of spending levels at least after retirement that satisfy the investor's essential goals and are thereafter applied to satisfy the investor's non-essential goals, and a range of the risk taking levels; and working backwards through the time horizon to a starting time, using a computer to evaluate potential net savings before retirement, net spending after retirement and risk taking levels for particular times and resource values within the evaluation grid, selecting at least recommended spending after retirement and risk taking levels for the particular times and resource values, and determining a starting risk taking level for a starting diversified portfolio from the recommended spending and risk taking levels over the time horizon; wherein using the computer to evaluate the potential net savings before retirement, net spending after retirement and risk taking levels for the particular times and resource values includes calculating a utility of the potential spending and risk taking levels, such that the utility at a specific time and resource value for the potential spending and risk taking levels combines at least a utility in the specific time of the spending and a previously calculated future expected utility through an end of the time horizon of future spending and risk taking levels; and such that the utility calculation recognizes a greater utility of satisfying the essential goals than of satisfying the non-essential goals; and outputting at least a summary of satisfaction of the essential and non-essential goals.