System and method for managing tax-deferred retirement accounts

• US 8,639,604 B1
• Filed: 10/26/2004
• Issued: 01/28/2014
• Est. Priority Date: 10/26/2004
• Status: Expired due to Fees

• Current Assignee: Alfred R. Berkeley III
• Original Assignee: Invest n Retire LLC
• Inventors: Abrahamson, Darwin K.
• Primary Examiner(s): Khattar, Rajesh
• Assistant Examiner(s): SEE, CAROL A
• Application Number:
  US10/973,483
• Time in Patent Office: 3,381 Days
• Field of Search: None
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A system and method of managing tax-deferred retirement accounts that enable the participants to invest in exchange traded funds (ETFs) and to forecast and intelligently plan for their retirement savings needs. The system and method preferably allow each participant to select an asset allocation model pursuant to which their investments will be managed and periodically rebalance the portfolio of each participant based on the selected asset allocation model.

Claims

1. An article of manufacture for managing tax-deferred retirement accounts, comprising:

a non-transitory computer readable medium comprising computer program instructions executable by a computer processor for managing a plurality of tax-deferred retirement accounts for a plurality of participants participating in a plurality of plans;

said instructions comprising a record keeping system configured for investing contributions periodically in at least one exchange traded fund in said plurality of tax-deferred retirement accounts for each of said plurality of participants, said at least one exchange traded fund comprising a plurality of exchange traded funds;

said instructions further configured for allocating shares of said at least one exchange traded fund to each of said plurality of participants in accordance with their respective contributions;

said shares being selected from whole shares and fractional shares in amounts commensurate with said respective contributions; and

said record keeping system further comprising instructions for;

computing a total buy amount for each of said plurality of participants for each of said plurality of exchange traded funds;

computing a total buy amount for each of said plurality of plans for each of said plurality of exchange traded funds;

computing a total buy amount of whole shares for all of said plurality of plans for each of said plurality of exchange traded funds; and

creating an omnibus trade file for each of said plurality of exchange traded funds covering all of said plurality of plans and all of said plurality of participants;

wherein said record keeping system further comprises instructions, for each one of said plurality of exchange traded funds in which an investment has been made, for;

receiving a report of purchased whole shares;

allocating said purchased whole shares among respective ones of said plurality of plans for which said investment has been made;

for each of said plurality of plans that receives a portion of said purchased whole shares, allocating said portion of said purchased whole shares among respective ones of said plurality of participants that have invested in said one of said plurality of exchange traded funds; and

allocating to said respective ones of said plurality of participants fractional shares of said one of said plurality of exchange traded funds and a cash balance.

2. The article of claim 1 wherein said record keeping system includes instructions for receiving an indication to terminate participation by one participant of said plurality of participants in said participant'"'"'s respective one of said plurality of plans, and, in response to receiving said indication to terminate:

selling whole shares of each of said plurality of exchange traded funds in which said participant holds an investment; and

processing an in kind transfer of fractional shares of each of said plurality of exchange traded funds in which said participant holds an investment to said participant'"'"'s respective one of said plurality of plans.

3. The article of claim 1 wherein said record keeping system includes instructions for receiving an indication with respect to one participant of said plurality of participants to rebalance said participant'"'"'s respective one of said plurality of tax-deferred retirement accounts according to a new asset allocation model, and, in response to receiving said indication to rebalance:

selling whole shares of each of said plurality of exchange traded funds in which said participant holds an investment;

processing an in kind transfer of fractional shares of each of said plurality of exchange traded funds in which said participant holds an investment to the respective one of said plurality of plans in which said participant is participating;

allocating the value of said whole shares of each of said plurality of exchange traded funds in which said participant holds an investment and said fractional shares of each of said plurality of exchange traded funds in which said participant holds an investment to said participant;

buying whole shares of other ones of said plurality of exchange traded funds based on said new asset allocation model; and

crediting a cash balance to said participant.

4. A non-transitory computer readable medium comprising computer program instructions executable by a computer processor for managing a plurality of tax-deferred retirement accounts within a plurality of tax-deferred retirement plans for a plurality of participants, wherein each of said plurality of tax-deferred retirement plans allows investment in at least one exchange traded fund, said computer program instructions comprising instructions for:

receiving an indication of a respective contribution to be invested on behalf of each of said plurality of participants in a respective one of said plurality of tax-deferred retirement accounts;

calculating a total buy amount sufficient to purchase a total number of whole shares of said at least one exchange traded fund based on the total amount of said respective contributions;

allocating a respective whole number portion of said total number of whole shares to each of said plurality of tax-deferred retirement plans based on a sub-total of said respective contributions for said plurality of participants within each respective one of said plurality of tax-deferred retirement plans; and

for each plan of said plurality of tax-deferred retirement plans, apportioning the respective whole number portion of said total number of whole shares by allocating to each of said plurality of participants within said plan an investment in a respective one of said plurality of tax-deferred retirement accounts in the amount of said respective contribution, said investment comprising;

(a) at least one whole share of said at least one exchange traded fund;

(b) a fractional share of said at least one exchange traded fund; and

(c) a cash balance.

5. The computer readable medium of claim 4 wherein said respective contribution comprises a periodic contribution.

6. The computer readable medium of claim 4 wherein said at least one exchange traded fund comprises a plurality of exchange traded funds.

7. The computer readable medium of claim 6 wherein said computer program instructions further comprise instructions for investing said respective contribution among said plurality of exchange traded funds according to an asset allocation model.

8. The computer readable medium of claim 7 wherein said computer program instructions further comprise instructions for periodically rebalancing a respective one of said plurality of tax-deferred retirement accounts according to said asset allocation model.