Retirement plans are usually made by people who believe they can actually quit their job at a certain age and have enough money to maintain their lifestyle. But what about those who don’t?
Several fintech startups are tackling this problem, including Retirement, who believes planning for retirement should be just as easy to get even though you’ll never have millions of dollars set aside. The New York-based startup describes itself as a “one-of-a-kind holistic” approach to retirement planning.
Based on a 2019 study by Transamerican Center Having found that only one in five workers have a written retirement strategy, the company offers similar offerings to other retirement planning companies: a dedicated advisor and products and services to invest, plan and spend.
But that’s where co-founder and CEO Tyler End says the similarities end: Not only does he focus on low-net-worth people, but he’s also gone all out on the “decumulation” of retirement. It does this by dividing an individual’s assets into three categories: cash, stability, and growth. The customer can see what his income is in real time and how much he can safely spend each month. He also applies this same logic to investments and is working on a debit card that gives money back to savings.
The company offers a free consultation to Americans aged 50 and over and charges its service at 0.75% on the first $500,000 of assets under management, and nothing after that. End said that translates to about 63 cents for every $1,000 managed, which is lower than comparable consulting services.
Retiree Asset Allocation Dashboard. Picture credits: Retirement
“The big players may offer call centers for someone to help you with your account, but we’re the only ones who offer you a dedicated advisor you can trust who will work with you on your fiduciary plan, c ‘that is, commission-free,” Fin told TechCrunch. “You see a lot of people start out with a mission similar to ours to help everyone else, but when people are incentivized to sell, they usually drift into a higher net worth.”
End founded the company in 2019 with Ian Yamey and Brian Ramirez, and together with their 15 employees, Retirable has built proprietary technology that has designed more than 50,000 retirement plans.
A month ago, the company launched its investment management and paycheck products and began connecting customers with planners. Retirable also grew its revenue by more than 25% month over month.
Today, the company announced an additional $6 million in seed funding backed by venture capital to give the company a total investment of $10.7 million to date. 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, continue to grow the advisory 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 soon,” he added. “When you’re really active in retirement, expenses fluctuate with age. This debit card gives the consumer and advisor insight into spending amounts and where the money is being spent. Then from there we can offer discounts on top of the savings. It is a one-of-a-kind product.