Patent ID: 8671045

Claim:
A computer-implemented method comprising: determining, by one or more computing devices, an asset allocation for each of a plurality of periods of a model duration that optimize an objective function, the asset allocations identifying for each of the plurality of periods of the model duration how much of an investment account to invest in one or more asset classes, the objective function comprising subtracting a value of a shortfall risk function from an expected value of an amount of income to be generated by an annuity purchased at the end of the model duration with funds in the investment account at the end of the model duration, wherein determining the asset allocation for each of the plurality of periods of the model duration that optimize the objective function comprises: (a) determining a purchase rice of the annuity; (b) determining a shortfall by subtracting a balance of the investment account at the end of the model duration from the purchase price of the annuity; (c) if the shortfall is less than or equal to zero, determining the value of the shortfall risk function is zero; and (d) if the shortfall is greater than zero, determining the value of the shortfall risk function as a product of the shortfall squared and a risk tolerance parameter; and associating, by the one or more computing devices, the asset allocations with values of a plurality of investor variables.