Why We Invested: Sagewell
Fintech for the growing retiree market
Much of the excitement around FinTech seen in the popular press and even daily investor publications centers on Gen Z and Millennial investors. Over the coming years, $30 trillion in wealth will transfer from Baby Boomers to subsequent generations. As a result, the increased attention and product suites being developed for the recipients of this transfer of wealth should come as no surprise. But for all the attention paid to the individuals this wealth is transferring TO, perhaps more attention should be paid to the individuals this wealth is transferring FROM — namely retirees and soon-to-be retirees.
Ten thousand people retire each day in the US and by 2030, 75 million Americans will be living in retirement.
Given these dramatic population shifts, it is particularly alarming that one in three retirees has no dedicated account for retirement. In fact, running out of retirement funds is the number one fear among retirees, outpacing fears of declining health. Indeed half of retirees count this anxiety as their number one concern.
Retirees are looking for solutions that address their pressing financial issues. With inflation rising and CPI adjustments to Social Security a constant topic, gaining earlier access to one’s regular fixed income sources can be a tremendous help for retirees managing their finances and cashflow. Managing retirement income and spending can be a cumbersome and inefficient process for older adults. Retirees and older working adults likely have income accruing each month into various accounts and from various sources including Social Security, 401k, pensions, etc. Retirees need to pace the funds coming into the household with the funds spent each month, which can prove to be an unruly process.
Sagewell is providing dynamic solutions that sit exactly at this key intersection point for older adults as they are searching not only for products to address current needs in financial services but also future planning challenges as well. Sagewell’s My Paycheck provides an earned wage access (EWA) product for retirees to plan, smooth and regularize their cashflows — providing peace of mind, predictability, and optimized tax strategies. With dedicated human support, older adults can manage and gain access to their income from pensions, 401(k) distributions, annuities, etc. — aggregated and dispersed like a paycheck to retirees on a regular schedule to meet their needs.
SixThirty is delighted to partner with Sam Zimmerman, Jeff Wright and the impressively talented team at Sagewell as they build the bank that is truly in tune with older adults and retirees as their complex financial needs continue to evolve. After completing their $5.25M raise to kick off 2022, the company is poised to connect older adults with the products and resources they need to simplify their financial life, optimize cash flows, and optimize decision making across their finances and related areas of life.