NewRetirement Raises $20 Million to Empower Financial Independence for Retirees
In an age where financial instability looms large over retirement dreams, Stephen Chen has emerged as a beacon of hope. Inspired by his mother's financial struggles as she approached retirement age, Chen took matters into his own hands, laying the groundwork for what would eventually become NewRetirement. This Mill Valley-based startup is revolutionizing the way people plan their retirement, with its software currently guiding 70,000 users in managing nearly $100 billion in financial plans.
“People like my mom lack the tools to look at their money holistically and strategically," Chen told TechCrunch, highlighting the gap in financial planning services for those not considered high net worth individuals by traditional advisers. Chen's answer to this issue? A suite of direct-to-consumer products enabling users to seamlessly integrate various financial aspects – from savings and investments to home equity and healthcare costs – into a robust retirement plan.
Chen, who previously founded the online college search and admissions tool Embark in 1995, sees NewRetirement as not merely a digital service, but a necessary evolution in personal financial planning. The platform allows users to create a financial retirement plan with "industrial-strength tools," as Chen puts it, enabling a level of sophistication and customization previously unseen in the consumer financial planning space.
Despite the fact that Americans over age 50 hold 80% of the country's wealth, fear of running out of money is a pervasive concern. According to Charles Schwab’s Modern Wealth Survey 2023, as many as 65% of Americans lack a formal financial plan, with a significant portion expressing dissatisfaction with their current financial planning processes. NewRetirement aims to fill this void, offering access to its platform for $120 per year, and providing a more hands-on approach with check-ins from a certified financial planner for approximately $1,500 per year.
The platform's success and innovation have not gone unnoticed in the financial sector, attracting significant enterprise interest. Charging forwards, NewRetirement recently secured $20 million in Series A funding, with contributions from leaders such as Allegis Capital, Nationwide Ventures, and Northwestern Mutual Future Ventures, among others. This influx of capital is earmarked for expanding enterprise products, scaling up onboarding processes, accelerating R&D efforts, and broadening the platform’s capacity to meet future demand.
“With this new capital, we will have three to four years of runway,” Chen optimistically noted, emphasizing his commitment to scaling enterprise partnerships and enhancing product offerings. As NewRetirement looks to the future, its blend of innovative technology and deep understanding of the American retiree’s financial concerns positions the company as a pivotal player in reshaping retirement planning for generations to come.
Analyst comment
Positive news. As NewRetirement raises $20 million in funding, it has the potential to expand its enterprise products and meet future demand. With its innovative technology and commitment to enhancing product offerings, NewRetirement is well-positioned to reshape retirement planning for generations to come. The market for retirement planning services is likely to grow as more individuals seek holistic and strategic financial planning solutions.
