Optimizing consumption, capital allocation, and annuitization in retirement

A system comprising at least one processor and at least one non-transitory memory coupled to the at least one processor, wherein the at least one non-transitory memory storing programming instructions, that upon execution by the least one processor, perform operations comprising:

• obtaining a set of investor data for an investor, including (1) an age of the investor, (2) an annual guaranteed income of the investor over a time period T, and (3) an initial portfolio value of an investment portfolio for the investor;
• generating, using a model and the set of investor data, an optimal capital allocation, an optimal consumption, and an optimal annuitization for the investor over the time period T, by maximizing an objective function, wherein:
• the objective function specifies (1) a consumption utility function that computes a utility derived from consumption of wealth of the investor at each specified time interval during the time period T and (2) a wealth utility function that computes utility derived from the wealth of the investor for each specified time interval during the time period T, wherein the wealth utility function computes post-annuitization utility values for a set of ratios for each specified time interval during the time period T and wherein the set of ratios is defined by normalizing different wealth values by different guaranteed income values;
• and
• providing, for display on a client device, a visualization that displays the optimal capital allocation value, the optimal consumption value, and the optimal annuitization value for the investor for each interval during the time period T.

A non-transitory computer readable medium storing instructions that, when executed by one or more data processing apparatus, cause the one or more data processing apparatus to perform operations comprising:

• obtaining a set of investor data for an investor, including (1) an age of the investor, (2) an annual guaranteed income of the investor over a time period T, and (3) an initial portfolio value of an investment portfolio for the investor;
• generating, using a model and the set of investor data, an optimal capital allocation, an optimal consumption, and an optimal annuitization for the investor over the time period T, by maximizing an objective function, wherein:
• the objective function specifies (1) a consumption utility function that computes a utility derived from consumption of wealth of the investor at each specified time interval during the time period T and (2) a wealth utility function that computes utility derived from the wealth of the investor for each specified time interval during the time period T, wherein the wealth utility function computes post-annuitization utility values for a set of ratios for each specified time interval during the time period T and wherein the set of ratios is defined by normalizing different wealth values by different guaranteed income values;
• and
• providing, for display on a client device, a visualization that displays the optimal capital allocation value, the optimal consumption value, and the optimal annuitization value for the investor for each interval during the time period T.