Why we’re investing in Sagewell

The retiree-centric digital banking and benefits platform designed to improve the lives of seniors

25madison

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By: Merrill Anovick

The demographic composition of the United States is undergoing a seismic shift. Life expectancy at age 65 is now 19 years, up 50% over the last several decades. As a result, there are over 50 million retirees in the United States today and that number is expected to grow to 72 million by 2035.

‍While the size of the US retiree pool continues to balloon, the infrastructure that has traditionally supported them financially is fracturing. Social Security, which is a “very important” source of retirement income for approximately half of retired or soon to be retired Americans, is forecasted to deplete cash reserves by 2033. Pensions and defined benefit plans, which provided support to 4 in 10 Americans at the peak of their prevalence, are now held by just 1 in 10 of the next wave of retirees (Americans age 50–64).

‍As guardrails falter, retiring Americans are currently unprepared to assume the burden of their extended retirements. Ten thousand Americans turn 65 each day and 1 in 3 baby boomers have $0 saved for retirement. Even among those who save, 58% rate the quality of their preparation at “C” or lower. Retirees are anxious about retirement and know that they need to do more to successfully manage their finances.

‍This is a large, important, and complex problem that has rightly drawn the attention of Entrepreneurs and Venture Capitalists for several years now. Several waves of solutions have come to market, and we believe Sagewell represents the next wave.

The first wave of innovation has been focused on preparation. Startup entrants and incumbents alike have worked to help middle-aged Americans (40–60), who are increasingly aware of the fact that they’ll need to support their own retirements, develop and manage more robust plans. Companies like eMoney Advisor support financial advisors who help their clients prepare while other startups like Silvur go directly to consumers. While small businesses and other employers are holding less retirement risk in the form of pensions and defined benefit plans, they are stepping up in other ways via startups like Origin to…

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25madison

25madison is an NYC-based venture studio, incubating companies from the ground up and investing in early-stage companies. Learn more at 25madison.com.