When it comes to personal finances, 87% of employees want help, according to PWC’s 2021 Employee Financial Wellness Survey. And they are looking for online tools to augment face-to-face financial advisors. It can feel daunting trying to calculate how long money will last and how different social security and Medicare benefit selections impact savings.
Rhian Horgan knows that first hand. Horgan spent 17 years managing assets for JP Morgan and has plenty of experience helping families manage investments. As technology tools began coming into the industry, she saw powerful consumer potential.
At the same time, she was talking to her parents about their retirement. For most of a decade, they talked about when. As soon as the discussion shifted to how, Horgan found herself diving into social security in order to give parents the best advice.
“I thought of social security as a paid tax until I read a 400-page book on the subject,” Horgan said. “I looked at this book and, before I even began reading, asked myself how the average American could make the best benefit selections if they needed to navigate this book first.”
Social security was just the beginning of Horgan’s concerns for consumers approaching 65 and making the most complex set of health and wealth decisions of their life. “The experiences being delivered are like the 1980s meets complicated Ph.D. math, and the average person is not being set up for success,” she said.
“On one side of my brain, I saw all this amazing tech being designed. On the other side, I’m trying to help my parents and I could not find a modern digital company serving this demographic.”
So Horgan decided to learn for herself how technology could leverage complex financial instruments and help consumers make the best decisions impacting their financial security. She left JP Morgan and focused on creating Silvur, an online tool providing customers with retirement tools to help them navigate all the options.
The experience inspired what would become one of Silvur’s core values, “How to be human in a world that sees numbers.” To date, Silvur has generated over three million retirement scores indicating at what age current retirement savings will run out, and $22B in retirement plans.
Retirement Isn’t Static
People age into retirement at different times and in different ways. Some drop in and out of the workplace as a way to keep their skills sharp. Others want to save more or pay off debt. Some stay employed for health insurance coverage. But all want to ensure that they have the financial support they need to last them throughout their lifetime. A 2019 PWC employee survey revealed that more than 80% of today’s employees believe they will be working after age 65.
According to Horgan, customer plans are always changing. Retirement is delayed or moved forward, part-time income is added through consulting or gig work, homes are bought and sold. All of this impacts monthly budgets and how long money will last.
“The idea that your retirement plan is static is outdated,” she said. “Today’s retirees need tools and tips that carry them through retirement and allow them to update their plans as their lives shift.”
According to the Bureau of Labor Statistics, today one out of every five adults aged 65 and older remain on the job, compared to 1 in 10 in the 1980s. Even working part-time to delay retirement for as long as possible can make a sizable impact on a retirement score and possibly delay required minimum withdrawals.
Required minimum distributions (RMDs) are mandatory minimum withdrawals you must make from your retirement accounts, except Roth IRAs, beginning the year you turn 72. However, miscalculating RMD could result in a 50% penalty. All the more reason to leave the mathematical calculations to savvy online tools.
“Account balances change every day, so by securely connecting financial accounts using Plaid, Silvur provides up-to-date status, including calculation of RMDs, so customers won’t get it wrong,” said Horgan.
Getting the Most from Government Benefits
Most parents spend years planning how to support a child’s college education financially. After buying a home, it’s one of the most significant financial decisions you will make. But there are other financial decisions equally important that people ignore, including healthcare.
Fidelity reports out-of-pocket healthcare costs for a 65-year-old couple living until roughly 85 for a male and 87 for a female to be $295,000.00. This number represents the costs associated with Original Medicare (Part A and B) and Part D, which is prescription drug coverage and a Supplemental Plan, most likely a Medigap Plan G policy.
A 2020 study by the Kaiser Family Foundation found that 57% of Medicare enrollees did not review or compare their coverage options. The data also indicated 46% never or rarely revisited their plans. Because plans can change yearly, not comparing the options could result in loss of benefits and devastating financial impact.
“Customers are feeling overwhelmed by the complexity of government benefits,” Horgan said, referring to a survey of their customer base. After years of paying into the system, those who want to get their fair share have to roll up their sleeves and tackle mounds of advertising brochures vouching for the best prescription coverage and advantage plans.
Modern Technology for a Modern Retiree
Financial decisions are not just about leveraging data to prioritize a plan; they are also about staying on top of changing markets, tax rates and benefit selections. In a tech-driven online world, why wouldn’t consumers rely on financial tools?
Silvur’s target audience is consumers in their 50s and 60s looking to financially power their future. The average age is 58, with 50% identifying as female. They’ve been putting money aside for retirement, but their greatest fear is not having enough. They want to remain financially independent but don’t have the tools to do that.
“The word retirement is outdated,” said Horgan. “It still means stopping, but older consumers are looking for new things to begin, whether a new job, starting a business or a new life in a new location. These are significant decisions with financial implications that can’t be undone.”
Horgan explains that up until recently, these decisions often required discussions with a financial advisor, lawyer and accountant. Today, decisions like these can be calculated on a digital platform, holistically bringing all the factors together.
While Silvur provides free retirement scores and plans, members have access to premium calculators for social security, medicare and cost of living. For example, members can calculate a retirement score across any zip code in the U.S., especially beneficial for people considering a post-retirement move. Depending on billing selection, monthly membership is as low as $7.
According to Horgan, moving from New York to Florida might add seven years to the life of your retirement savings. While healthcare is higher in Florida, no state taxes create overall savings.
Sometimes the retirement score is a reality check demonstrating the need to work until age 70 to feel financially secure. “We provide action steps that are more achievable than ‘change your asset allocation’,” Horgan explains.
And sometimes the retirement score provides reassurance. Horgan recounted a story about a woman who, after seeing how long her money was projected to last, decided to pursue her dream of moving to France for a few years.
Horgan’s goal has always been to untangle the complexity of retirement and financial planning so that everyone could live their best lives as they get older. While there are several retirement planning tools on the market, most focus on plan management or simply calculate social security benefits. No other app currently offers the holistic combination of retirement calculators available from Silvur.
“I want everyone to feel empowered and confident in their retirement decisions,” Horgan said. “That means demystifying decision-making with a roadmap that provides the confidence that the consumer’s money will last for their lifetime.”