Financial Preparedness Tool

• US 20150221036A1
• Filed: 02/03/2014
• Published: 08/06/2015
• Est. Priority Date: 02/03/2014
• Status: Abandoned Application

• Current Assignee: FMR LLC
• Original Assignee: FMR LLC
• Inventors: Sharma, Adheesh, Drakeley, Erin, Maciel, Suzette, Trainor, John
• Application Number:
  US14/171,401
• Publication Number:
  US 20150221036A1
• Time in Patent Office: Days
• US Class Current: 1/1
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Methods and systems for retirement planning are provided. A prediction for retirement income is based on financial information of an individual. The prediction includes a confidence level that indicates the level of accuracy of the prediction. The confidence level is based on financial information of the individual.

Claims

1. A computerized method of retirement planning, the method comprising:

receiving, by a computing device, financial information for an individual, the financial information including income, contributions to savings over a time duration, and a credit score;

determining, by the computing device, a savings rate score for the individual, the savings rate score based on the income, contributions to savings made by the individual over one prior year, and a number of years until the individual retires;

determining, by the computing device, a savings rate direction score for the individual, the savings rate direction score based on the income and contributions to savings made by the individual over a selected prior years;

determining, by the computing device, a confidence level based on the savings rate score, the savings rate direction score, the savings history score and the credit score;

determining, by the computing device, a prediction for income required at retirement for the individual, wherein the prediction is based on a rate for income replacement, the rate for income replacement based on essential expenses, discretionary expenses, healthcare expenses, or any combination thereof; and

determining, by the computing device, a retirement preparedness score for the individual based on expected income from savings divided by the predicted income required at retirement for the individual, the expected income from savings having the determined confidence level.

2. The method of claim 1, further comprising receiving, by the computing device, health information, lifestyle information, or any combination thereof.

3. The method of claim 1 wherein determining the savings rate score further comprises:

dividing, by the computing device, the contributions to savings made by the individual over twelve prior months by the income;

receiving, by the computing device, the savings rate score based on a table look-up that receives as input results of the division.

4. The method of claim 1 wherein determining the savings rate direction score further comprises:

dividing, by the computing device, the contributions to savings made by the individual over a first year of the three prior years by the income to obtain a first savings rate direction sub-score;

dividing, by the computing device, the contributions to savings made by the individual over a second year of the three prior years by the income to obtain second savings rate direction sub-score;

dividing, by the computing device, the contributions to savings made by the individual over a third year of the three prior years by the income to obtain a third savings rate direction sub-score;

determining, by the computing device, whether the difference between the first savings rate direction sub-score, the second savings rate direction sub-score and the third savings rate sub-score indicates an overall increasing, decreasing or neutral savings rate direction for the individual; and

receiving, by the computing device, the savings rate direction score based on a table look-up that receives as input the savings rate direction for the individual.

5. The method of claim 1 wherein determining the savings history score for the individual further comprises receiving, by the computing device, the savings history score based on a table look-up that receives as input the time duration.

6. The method of claim 1 wherein determining the confidence level further comprises adding, by the computing device, the savings rate score, the savings rate direction score, the savings history score and the credit score.

7. The method of claim 1 wherein determining the prediction for income needed at retirement for the individual further comprises:

receiving, by the computing device, a first set of information, the first set of information including demographic information, asset information, retirement-goal information, non-retirement goal information, or any combination thereof;

performing, by the computing device, Monte Carlo simulation based on the first set of information; and

selecting, by the computing device, a result of the Monte Carlo simulation having the confidence level.

8. The method of claim 7 further comprising:

receiving, by the computing device, a second set of information, the second set of information healthcare information, lifestyle information, or any combination thereof; and

determining, by the computing device, a planning horizon based on the second set of information, wherein the Monte Carlo simulation is further based on the planning horizon.

9. The method of claim 1 wherein determining the prediction for income further comprises:

receiving, by the computing device, credit information, lifestyle information and healthcare information;

determining, by the computing device, essential expenses, the essential expenses based on the credit information;

determining, by the computing device, discretionary expenses, the discretionary expenses based on the lifestyle information; and

determining, by the computing device, healthcare expenses based on the healthcare information.

10. The method of claim 9 wherein the credit information is received from one or more credit reporting bureau.

11. The method of claim 9 wherein the lifestyle information is received from one or more social media websites.

12. The method of claim 9 wherein the lifestyle information includes places the individual has checked in in from, stores the individual has purchased items from, pages the individual has viewed, social media gifting, or any combination thereof.

13. The method of claim 9 wherein the healthcare information is received from one or more healthcare providers.

14. The method of claim 13 wherein the healthcare information includes projected costs for treating health conditions of the individual.