NewRetirement needs to simplify monetary planning for retirement

When entrepreneur Stephen Chen’s mother started approaching retirement age, she was compelled to borrow cash from Chen — and Chen’s brother — to make ends meet. They needed to assist, however the siblings additionally needed to determine a extra sustainable, long-term answer that’d assist their mother retire with out having to fret about funds.

Chen tried to get steering from a monetary adviser, however nobody would take his mom as a shopper as a result of her internet price wasn’t thought-about excessive sufficient. So Chen began constructing spreadsheets and monetary fashions himself, doing his finest to determine how his mother may reside the retirement way of life that she needed.

“People like my mother lack the instruments to take a look at their cash holistically and strategically to allow them to make knowledgeable choices, monitor their monetary state of affairs, perceive which levers to drag and when and make the connection between the alternatives they make at the moment and the long-term ramifications to their plan,” Chen advised TechCrunch. “There’s a confluence of things that will alter the way forward for monetary planning and advising.”

It was after Chen helped his mother decrease her bills, determine when to assert Social Security, resolve when to downsize and take different steps to change into financially impartial that Chen realized numerous different older Americans have been dealing with the identical challenges.

So Chen based NewRetirement, a Mill Valley-based firm constructing software program to assist folks create monetary retirement plans. Today, NewRetirement’s direct-to-consumer merchandise energy monetary planning for 70,000 customers managing near $100 billion in their very own monetary plans, in line with Chen.

“Our fashions transcend financial savings and investments, making an allowance for all the different components in an individual’s life, from residence fairness, healthcare prices and taxes to Medicare and Social Security,” Chen stated. “Every time a consumer makes a change, we run hundreds of simulations as a way to assist them optimize their plan … We account for hundreds of various situations, enabling customers to confidently map out accumulation and decumulation projections with digital steering.”

NewRetirement is Chen’s second startup after Embark, a web-based school search and admissions software he launched in 1995. And, like Embark, Chen sees NewRetirement as a digital answer to a transition confronted by tens of millions of Americans.

“120 million Americans over age 50 maintain 80% of the wealth on this nation,” Chen stated, “But operating out of cash stays a high 10 worry, with almost half of Americans saying they’re nervous about it.”


NewRetirement’s platform makes use of predictive modeling and knowledge analytics to assist customers suss out the proper financial savings approaches. Image Credits: NewRetirement

Indeed, nearly all of Americans — as many as 65%, per Charles Schwab’s Modern Wealth Survey 2023 — don’t have any formal monetary plan. And whereas 37% of respondents say that they work with a monetary adviser, two-thirds of Americans consider that their monetary planning wants enchancment, in line with Northwestern Mutual’s Planning and Progress Study 2023.

NewRetirement, which started as a shopper providing and in 2021 expanded to the enterprise, expenses $120 per yr for entry to a set of instruments, calculators, suggestions and state of affairs comparisons and ~$1,500 per yr for check-ins with a licensed monetary planner. In addition, NewRetirement sells a subscription-based non-public label model of its instruments aimed toward monetary advisers.

Now, you may marvel, what makes NewRetirement totally different from startups like Retirable, which equally supplies an array of retirement planning instruments and entry to asset managers? Chen asserts that NewRetirement is among the few — and maybe solely — monetary planning platform that serves shoppers in addition to advisers and workplaces.

“Our core innovation is permitting anybody to create a plan with industrial-strength instruments, enabling advisers to collaborate with the top consumer and making this accessible at scale by way of enterprise companions who convey it to their clients,” Chen stated. “As extra monetary providers corporations see their choices like funding administration change into commoditized, there’s big worth in serving to shoppers and prospects take into consideration their cash holistically. By providing self-directed digital planning to shoppers versus beginning with a human adviser, they will scale and serve any variety of customers, study them, assist them make good choices and place their services and products extra successfully.”

Chen says that about 70% of NewRetirement’s income is enterprise presently, with the remaining 30% coming from shopper clients. The platform has 20,000 particular person subscribers and “a number of” wealth administration shoppers in addition to “a number of” enterprise clients together with Nationwide, which just lately expanded an current partnership with NewRetirement.

That momentum little doubt helped NewRetirement to cinch its Series A funding spherical this month.

The firm raised $20 million in a tranche that brings its complete raised to $20.8 million, led by Allegis Capital with participation from Nationwide Ventures, Northwestern Mutual Future Ventures, Plug and Play Ventures, Motley Fool Ventures and others. Chen says that the money infusion might be used to develop 50-employee NewRetirement’s enterprise merchandise, scale up onboarding, speed up R&D efforts and construct capability to fulfill future demand.

“With this new capital, we could have three to 4 years of runway,” Chen stated. “That provides us time to proceed to scale our enterprise partnerships and improve our product. What’s extra, the present downturn is enabling us to usher in unimaginable expertise. We have a powerful group in place and can develop headcount additional this yr.”

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