Patent ID: 8352349

Claim:
A method of generating a glide path for a target date fund using a computing device comprising a processor and a non-transitory computer readable medium in communication with the processor, wherein the target date fund comprises a growth asset and a reserve asset, wherein the glide path is a set of values comprising a percentage G of the target date fund that is the growth asset and a percentage R of the target date fund that is the reserve asset at each interval (n) over a time period comprising N intervals, wherein (N) is greater than one, the method comprising: identifying, using the processor, an acceptable risk level for the target date fund; determining, using the processor and the identified acceptable risk level, user-defined inflection interval (n=i) where, when (n) is less than (i), G(n) and R(n) are determined using a growth algorithm, and when (n) is greater than (i), G(n) and R(n) are determined using a liability algorithm, wherein the inflection interval (n=i) is less than (N); calculating, using the processor, a value G(i) that is equal to a percentage of the target date fund comprising the growth asset at the inflection interval (n=i); calculating, using the processor, a value R(i) that is equal to a percentage of the target date fund comprising the reserve asset at the inflection interval (n=i); for each interval (n) where (n) is greater than (i), setting, using the processor and the liability algorithm, G(n)=G(X) LDM and R(n)=R(X) LDM , wherein at interval (n=N), R(N) equals 1 and G(N) equals 0, wherein the liability algorithm is given by: R ⁡ ( X ) LDM = ⁢ [ 1 - ( X X I ) ] · [ 1 ( 1 + d ) X ] ⁢ ⁢ and G ⁡ ( X ) LDM = ⁢ 1 - R ⁡ ( X ) LDM wherein d is an expected annual return on the reserve asset, wherein X is equal to (N−n), wherein X l is equal to (N−i); and for each interval (n) where (n) is less than (i), setting, using the processor, G(n) equal to one hundred percent of the target date fund.