Savings Hierarchy Optimization for Financial Accounts

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Solution Overview

Problem

Individuals face challenges in optimizing their savings across various financial accounts, such as healthcare and retirement accounts, due to rising healthcare costs and limited wage growth, leading to a need for tools that help navigate complex savings strategies throughout the year, especially in managing healthcare expenses and retirement planning.

Innovation Solution

A computerized method that receives user input to optimize savings by generating a savings hierarchy based on financial account information, adjusting contribution limits, and allocating funds across accounts like HSAs, 401(k)s, and IRAs, considering tax rates, employer matches, and medical expenses, allowing for partial year adjustments to optimize savings and cover out-of-pocket medical expenses.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If individuals contribute more to healthcare accounts to cover rising medical expenses, then current healthcare cost coverage is improved, but retirement savings are reduced

Engineering Contradiction:

Improvehealthcare expense coverageVSAvoidretirement savings

Core Design Contradiction:

ReliabilityVSQuantity of substance

Solution Approach 1:

The system dynamically adjusts contribution allocations across different account types (HSA, FSA, 401(k), IRA) based on real-time financial account data, expense projections, and user preferences. The savings hierarchy can be modified and reoptimized throughout the year as financial conditions change, allowing flexible balancing between current healthcare coverage and future retirement savings.

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The system changes contribution parameters (amounts, timing, allocation ratios) across multiple financial accounts to optimize the balance between healthcare expense coverage and retirement savings. By adjusting these parameters dynamically based on user input and financial data, the system resolves the contradiction between immediate healthcare needs and long-term retirement security.

Inventive Principle:

Principle #35Parameter changes

2Ease of manufacture

If individuals wait until annual elections or lifetime events to change savings plans, then administrative simplicity is maintained, but savings optimization is lost

Engineering Contradiction:

Improveadministrative simplicityVSAvoidsavings optimization

Core Design Contradiction:

Ease of manufactureVSProductivity

Solution Approach 1:

The system performs preliminary optimization of savings allocations throughout the year by continuously monitoring financial account data and recalculating the savings hierarchy. This allows users to make mid-year adjustments without waiting for annual elections, capturing savings opportunities as they arise while maintaining a simple user interface.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system maintains continuous optimization of savings allocations by regularly updating the savings hierarchy based on changing financial conditions, expense projections, and account balances. This continuous action replaces the discontinuous annual election process, enabling ongoing savings optimization without administrative complexity.

Inventive Principle:

Principle #20Continuity of useful action

3Productivity

If individuals allocate funds to multiple financial accounts simultaneously, then savings opportunities are increased, but allocation complexity increases

Engineering Contradiction:

Improvesavings opportunitiesVSAvoidallocation complexity

Core Design Contradiction:

ProductivityVSDevice complexity

Solution Approach 1:

The system segments the allocation process into a structured savings hierarchy with prioritized steps. Instead of simultaneously managing multiple accounts with equal complexity, the hierarchy breaks down the allocation into sequential decisions (e.g., maximize HSA contributions first, then FSA, then retirement accounts). This segmentation reduces perceived complexity while capturing multiple savings opportunities.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The savings hierarchy acts as an intermediary framework that mediates between the user's overall savings goals and the complex details of multiple financial accounts. It translates high-level objectives into specific account allocations, shielding users from the complexity of coordinating multiple accounts while maximizing savings opportunities across all account types.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS8930217B2Method and system for optimizing savings benefits

Publication Date: 2015.01.06 FMR CORP

AI summary

A method is provided for optimizing savings in financial accounts, including healthcare and retirement accounts for an employee and or participant. The method includes receiving information about the participant and financial accounts for which the participant is eligible to use and or using, and generating for the participant a savings hierarchy recommending the order and amounts to be contributed to the financial accounts from the participant's budgeted savings dollars. The method also includes determining generating the savings hierarchy for both full year and partial year activity by the participant. The method further includes transmitting the recommendations to the participant via data displayed as a graphical user interface with a graphical representation of the savings hierarchy to provide the participant with ease of understanding the recommendations for optimizing the budgeted savings dollars or selected contribution amount.