WHY WE’VE PARTNERED WITH MASSCHALLENGE FINTECH:
Anyone familiar with AARP knows that helping people save for retirement is core to our mission of empowering people to choose how they live as they age. You may be just a bit surprised that saving for retirement is not the primary challenge we’re pitching to the startup community. Instead, we’re seeking innovative solutions to help people cope with near-term financial setbacks – setbacks that so many Americans face everyday. We’re talking about the everyday curveballs that life throws at us: a leaky roof, fewer career opportunities or a sick spouse or child.
Half of American 10-year-olds are expected to live to see their 100th birthday. Living to 100 can be an exciting or a terrifying prospect depending on your financial situation. A critical challenge for our aging society is how to maintain financial security, when 43% of households are projected to run out of money in retirement.
Why focus on short-term needs in the face of such a vast retirement savings shortfall? Simply put, helping people cope in the short-term will help them thrive in the long-term, maybe even for 100 years. Consider the following:
- Most of us experience unplanned financial setbacks. In a given year, 60% of American households experience an expense or income drop that they didn’t budget for. The typical cost of a setback is $2,000.
- Four in ten households couldn’t come up with $400 to cover a financial emergency. This staggering figure comes from the Federal Reserve. Even older and higher-income people are not always prepared for a financial emergency.
- Without emergency savings, a rainy day can turn into a long-term crisis. A lack of liquid savings can throw a household’s finances off track for a year or more. Some households may be forced to turn to high-cost alternatives like payday loans or to withdraw money from retirement accounts.
Hear AARP's 2020 Challenges:
Through our collaboration with MassChallenge FinTech, AARP is enlisting the startup community to join us in helping people prepare for a rainy day. We are looking for disruptive technologies that:
- Helping individuals generate income post retirement, leveraging new, disruptive technologies
- Help people accurately plan for managing quality of life as income decreases
- Helping individuals shift into a new normal (financial, etc) when dealing with a life transition
- Help people use technology instruments to assist loved ones build a nest egg
To give you a head start, here are a few tips for success:
- Education is necessary but not sufficient: The financial industry and others have plenty of tips on how to save, but too many Americans still aren’t prepared for a financial emergency. To help people make real change, we need to leverage the power of behavioral economics.
- Behold the power of the paycheck. Employers are an extremely promising delivery channel for savings solutions. The point of pay is an important moment to reach consumers and help them follow through on their savings goals. Hint: it’s also a place where payment technology is already pretty well-established.
- One size does not fit all. We need to know more about the needs of consumers who are underserved in the current market: low-wage workers, nontraditional workers and the self-employed, people of color, and women.
HOW WILL WE HELP STARTUPS GROW THEIR BUSINESSES?
We engage the startup ecosystem to help bring the best solutions to market and to scale. We engage with startups in stages, with a long-term strategy of choosing a select group of startups to collaborate with to transform markets and change lives.
- First, we encourage all entrepreneurs to keep the power of the 50+ market in mind when designing for all ages. Our message to entrepreneurs: In the US alone, people over the age of 50 generate $7.6 trillion in annual economic activity, so you ignore the 50+ market at your own peril.
- Next, we offer in-kind services to a select group of startups. For the past three years, we have teamed up with industry and programs like MassChallenge FinTech to offer to a small group of startups services such as access to AARP innovation experts, industry experts, 50+ consumers for qualitative testing, in-home user testing opportunities, media exposure, showcase opportunities at major conferences and events, and exposure to major influencers and investors. As we work with these startups, we assess their potential for transformational social impact through market innovation.
- Finally, we choose a small number of start-ups to work with in a more long-term way to drive impact for people 50+. We ask startups with the greatest promise to join AARP’s Hatchery Ventures program, which uses AARP’s resources and expertise to bring the best of these ideas to scale.
At AARP, we remain steadfast in our mission to disrupt aging, and empowering people to choose how they live as they age.
Hear other FinTech Partner Challenges Here!
Stay up to date with MassChallenge by signing up to our newsletter below.