Using Tech And AI To Fill America’s ‘Retirement Advice Gap’

With an estimated 10,000 U.S. baby boomers turning 60 every day now, retirement concerns are a major source of worry for many Americans. While the market to serve affluent individuals is filled with investment advisers and financial firms, pickings are a lot slimmer for people of more modest means, according to R. Tyler End, co-founder and CEO of retirement planning platform Retirable.

“We started Retirable to address America’s advice gap,” End told PYMNTS in a recent interview. “It’s staggering to see that 73 percent of people have never seen a financial plan. Our goal is to help people set one up and make it holistic and accessible.”

Retirable uses a mix of technology and human experts to particularly help 50+-year-old pre-retirees create financial plans. The company recently closed a $4.7 million round of seed funding lead by Vestigo Ventures.

End said Retirable plans to deploy the money to widen its footprint and make sure that wherever people are searching for retirement answers, the company will be there. Even though it’s widely known that most Americans over 50 aren’t ready to retire, he said, both the financial services industry and pre-retirees themselves are largely ignoring the problem.

End said some of the “advice gap” stems from the fact that people in the mass market often view financial planning as a luxury or something that’s only for the rich. He said they also worry about being sold something they don’t want, and frequently find the process confusing.

So, End believes that focusing on the Retirable target demographic’s specific needs makes perfect sense. “They’re entering this really important phase in life where they have to start making really big decisions around things like Social Security and Medicare, and when they can retire, which are going to impact the next 30 years,” he said. “It’s huge, and nobody’s really focused on helping them.”

COVID As A Catalyst

However, End said COVID-19 is heavily impacting both Retirable’s operations and its customers.

First, he said that “no one wants to sit down with a financial adviser in person right now.” But even more importantly, the pandemic is sparking layoffs, wage cuts, reduced hours and forced early retirements on many Americans in the 50+ demographic.

“So there are now all these people that really need these questions answered and are looking for digital solutions to help with that,” End said. “I don’t want to say COVID has been good for anyone, but I think it’s highlighted the need for a [digital] product like ours to solve these big, pressing questions.”

50-Somethings Often Ask: ‘Will I Have Enough Money To Retire?

Not surprisingly, concerns about income and healthcare dominate the conversations Retirable has with pre-retirees. But End said the company’s consultative process looks at other issues, too.

Among them are how to maximize social infrastructure in retirement, how to live within one’s means and what to do for housing. “Everybody’s scared about living in a nursing home,” End noted.

But there’s one question clients ask more than anything else: “’Will I have enough?’ is what we hear day in and day out,” End said. “For most people, they’re thinking: ‘I don’t want to be a burden on my family. I don’t want to have to sleep on my daughter’s couch.’”

He said that consumers’ financial planning needs are much different when they’re in the “accumulation phase” of their lives versus the “decumulation” one.

“Accumulation is pretty easy. You want to save as much money as possible, spend less than you make, put it in diversified investments and watch it grow over time,” End explained. “But when you get into decumulation, you have to start thinking about: ‘How do I de-risk my plan and make this money last as long as possible?’ And so in this stage, a lot of the talk is about risk mitigation versus taking on risk.”

“We aren’t out there saying, ‘hey, come to us and we’ll build you a financial plan,’” End said. “We’re saying, ‘Hey, you have a question about Social Security? We can help you make that decision.’”