NewRetirement wants to simplify financial planning for retirement | Tech Crunch

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When founder Stephen Chen's mother began to approach retirement age, she had to borrow money from Chen and Chen's brother to make ends meet. They wanted to help, but the siblings also wanted to figure out a more stable, long-term solution that would help their mother retire without worrying about finances.

Chen tried to get guidance from a financial advisor, but no one would take his mother as a client because her net worth was not considered high enough. So Chen began building spreadsheets and financial models on his own, doing his best to figure out how his mother could live the retirement lifestyle she wanted.

“People like my mom don't have the tools to look at their money holistically and strategically so they can make informed decisions, monitor their finances, understand which levers to pull and when, and make the connection between the choices they make today and the long-term consequences for their planning.” Chen told TechCrunch. “There is a confluence of factors that will change the future of financial planning and advice.”

After helping her mother reduce her expenses, Chen realized that many other older Americans face the same challenges of deciding when to claim Social Security, when to cut back, and take other steps to become financially independent.

So Chen founded New Retirement, a Mill Valley-based company building software to help people create financial retirement plans. Today, New Retirement's direct-to-consumer products offer financial planning for 70,000 customers managing close to $100 billion in their own financial plans, Chen said.

“Our models go beyond savings and investments, taking into account all other aspects of a person's life, from home equity, health care costs and taxes to Medicare and Social Security,” Chen said. “Every time a user makes a change, we run thousands of simulations to help them optimize their plan … We consider thousands of different scenarios, enabling users to confidently map accumulation and decumulation expectations with digital guidance.”

New Retirement is Chen's second startup after Embark, an online college search and admissions tool he launched in 1995. And, like Embark, Chen sees New Retirement as a digital solution to the transition facing millions of Americans.

“The 120 million Americans over 50 own 80% of the wealth in this country,” Chen said, “yet running out of money remains a top 10 fear, with nearly half of Americans saying they worry about it.”

The New Retirement Platform uses predictive modeling and data analytics to help provide users with optimal savings strategies. Image Credits: New Retirement

In fact, most Americans — 65%, according to Charles Schwab's Modern Wealth Survey 2023 — don't have a formal financial plan. And while 37% of respondents say they work with a financial advisor, two-thirds of Americans believe their financial planning needs improvement, according to Northwestern Mutual's Planning and Progress Study 2023.

New Retirement, which began as a consumer offering and expanded to enterprise in 2021, charges $120 a year to access tools, calculators, recommendations and scenario comparisons, and $1,500 a year for check-ins with a certified financial planner. In addition, New Retirement sells a subscription-based private label version of its tools aimed at financial advisors.

Now, you might wonder, what makes New Retirement different from startups like Retirable, which offer a similar array of retirement planning tools and access to asset managers? Chen asserts that New Retirement is one — and perhaps the only — financial planning platform serving consumers as well as advisors and offices.

“Our core innovation allows anyone to create a plan with industrial-strength tools, enabling advisors to collaborate with the end user and make it available through enterprise partners who deliver to their customers,” Chen said. “As more financial services companies look to commoditize their offerings, such as investment management, there is huge value in helping clients and prospects think holistically about their money. By offering clients a self-directed digital plan, starting with a human advisor, they can scale and serve any number of users, learn about them, help them make better decisions, and position their products and services more effectively.

Chen said 70% of New Retirement's revenue is currently enterprise, with the remaining 30% coming from consumer customers. The platform has 20,000 individual subscribers and “many” wealth management clients as well as “multiple” enterprise customers, including Nationwide, which recently expanded its existing partnership with New Retirement.

That momentum no doubt helped New Retirement close its Series A funding round this month.

The company raised $20 million in a tranche for a total of $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 said the cash infusion will be used to expand New Retirement's enterprise products of 50 employees, increase onboarding, accelerate R&D efforts and build capacity to meet future demand.

“With this new capital, we will have a three-to-four-year runway,” Chen said. “This gives us time to pursue our corporate partnerships and improve our product. What's more, the current downturn is enabling us to bring in excellent talent. We have a strong team and will further expand our headcount this year.

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