Retirement plans are usually created by people who believe that at a certain age they can actually quit their jobs and have enough money to maintain their lifestyle. But what about those who don’t?
Several fintech startups are addressing this issue, including: retired, who believes that retirement planning should be just as easy to come by, even if you’re never going to set aside millions of dollars. The New York-based startup describes itself as a “first-of-its-kind holistic” approach to retirement planning.
Building on a 2019 study of TransAmerica Center Having found that only one in five employees has a written retirement strategy, the company offers similar offerings to other retirement planning companies: a dedicated advisor and products and services for investing, planning and spending.
But that’s where co-founder and CEO Tyler End says the similarities end: It’s not just targeting less-wealthy individuals, but it went all out on retirement “winding down.” It does this by allocating a person’s assets into three categories: cash, stability, and growth. The customer can see in real time what his income is and how much he can safely spend each month. It applies the same logic to investments as well, working on a debit card that returns money to savings.
The company offers a free consultation to Americans 50 and older and rates its service at 0.75% on the first $500,000 of assets under management, and nothing more after that. End said this translates to about 63 cents for every $1,000 managed, which is lower than comparable consulting services.
Retirable’s asset allocation dashboard. Image Credits: retired
“Major players may offer call centers to have someone help you with your account, but we are the only ones to give you a dedicated advisor you can trust who will work with you on your plan that is fiduciary meaning no commissions be,” End told londonbusinessblog.com. “You see a lot of people start out with a mission similar to ours to help everyone, but when people are incentivized to sell, they generally drift toward higher net worth.”
End founded the company in 2019 with Ian Yamey and Brian Ramirez, and along with their 15 employees, Retirable built proprietary technology that has designed more than 50,000 retirement plans.
A month ago, the company launched its investment management and payroll products and has started matching its clients with planners. Retirable also grew its revenue by more than 25% month over month.
Today, the company announced $6 million in additional venture capital funding to give the company a total investment to date of $10.7 million. The round was led by Primary and included Vestigo Ventures, Diagram, Portage and Primetime.
End said the new funding will be used to accelerate debit card development, grow the advisor team and add new distribution channels, such as working with Medicare agents, tax planners and estate planners.
“One of the interesting things about this demographic is that some people spend way too much too early,” he added. “If you’re really active in retirement, spending fluctuates as you get older. What this debit card does is give both the consumer and the adviser insight into the amounts spent and what the money is spent on. From there we can offer discounts on top of savings. It is a unique product.”