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Overview

Blueprint Income is creating a new way for consumers to ensure they have a reliable and steady personal pension.

Their Story

Working as a policy advisor on retirement issues at the U.S. Treasury opened Matt Carey’s eyes to how retirement looks for Americans today. In 2013, with the days of company sponsored pensions long gone, Carey wondered whether there was room for an alternative approach. “In the old system, we used to give people pensions from their employer and their employer mitigated the risk,” he says. “In this new system, all the risk is on employees.”

Later that year, Carey left his Treasury job and enrolled in Wharton Business School with the hopes of figuring out and building a new retirement saving alternative. The challenge: Figuring out how people could still guarantee themselves a steady retirement paycheck without taking on the risk of a 401(k) or shelling out the enormous upfront costs required of an annuity. “Retirement is one of the really big things people need to be doing more about at a time when everyone is doing less for them,” he says.

At Wharton, Carey met Adam Colombo and Nimish Shukla, who joined him as co-founders in what would become Blueprint Income. In 2015, Carey decided to leave his MBA program and focus full-time on the business. The solution he and his team were working on would provide a personal pension plan in place of the company pension of the past. As an initial step, Carey, Colombo and Shukla each became certified as insurance agents, which enabled them to sell insurance directly to consumers.

Unlike 401(k) plans, which place all the risk on employees’ shoulders and don’t guarantee a steady stream of income, the solution Blueprint Income came up with aims to remove that risk factor. What’s more, in contrast to annuities, which require an upfront investment of upwards of $100,000 – a chunk of change many consumers would have trouble fronting – Blueprint Income enables consumers to pay for a guaranteed pension through smaller payments over time. “Annuities are hard to compare across insurers because there’s a lot of jargon and misaligned incentives among agents and consumers,” says Carey. “We are trying to create a new paradigm where your employer doesn’t have to take the risk, but you get the same benefit.”

To do this, Blueprint Income offers consumers a personal pension plan backed by insurance companies rather than employers. Carey and his team see it as a way of modernizing the insurance industry by building a user-friendly platform through which consumers choose various insurers that provide them with their pension. “When I came up with the idea, I thought, ‘Insurance companies are not digitally savvy enough to coordinate this by themselves,’” says Carey. And so he and his team set about building the technology.

To get the ball rolling in 2015, Blueprint Income began by first selling large upfront purchases resembling annuities. Over time, they convinced insurance companies they partnered with to consider alternative pay structures that spread the costs out over time so that consumers didn’t have to pay as much upfront. Gaining the trust of both consumers and insurers was a major initial hurdle.

“How do you build the technology, the content and the experience that convinces someone to hand over a pretty large amount of money to an insurance company?” says Carey. “That was a big challenge right out of the gate.”

To address this issue, Blueprint’s most crucial asset was being as open as possible about the numbers. “The biggest thing was transparency,” says Carey. “At the end of the day trust is what convinces somebody to buy.” For Blueprint that means transparency around both pricing and information – giving consumers a clear sense of where their money is going and what it is going towards.

To get users started, Blueprint Income collects basic information from them, including how much they are saving for retirement, whether they’re in good health, what their income is and how much time they have until retiring. Consumers can ask questions through a mobile-friendly app. Based on the information gathered, they are then given an individualized buying plan with a low upfront cost that can be paid for via a subscription. “Rather than buying all at once, we are turning the market into what a pension is,” says Carey. “Typically people will contribute once a month, and every day you work, you get a slightly larger pension.”

Say, for example, you’d like to ensure that you receive a steady paycheck of $7,000 in your retirement years. Instead of paying out the upfront cost of a $100,000 annuity, Blueprint Income makes it possible for someone to open a contract for a personal pension with as little as $5,000 and a monthly subscription payment of $500.

“We are making it really accessible for anyone,” says Carey. “Pensions were a pretty blue-collar product and that is our core focus.”

Much as CFSI has helped push the fintech industry to reimagine how technology can help streamline and improve access to financial services for the underbanked, Blueprint Income is hoping to create a modernized alternative to the way the insurance industry operates. “We knew there was a real need for the insurance industry as a whole to find ways to modernize,” says Carey. “What we found was that insurance companies were much more willing than we expected to have their products on our distribution channel.”

Blueprint Income has been in beta since September 2017 and plans to officially launch in early 2018. The company sees its priority customer as someone who is either Gen X or an early baby boomer without a pension. “For someone who likes the idea of a pension but doesn’t have one through their employer, we are the place they get it,” says Carey. “Most of our early customers are folks who had a pension through their employer and it’s been frozen.”

As the company grows, it plans to lower the minimum payment required of customers so that more people can access the product. Carey also hopes to eventually make the personal pension accessible through more channels including employers. “Retirement shouldn’t be a luxury. It should be accessible to everyone,” he says.

What They Do

Key People

Matt Carey

Founder & CEO

Lauren Minches

Head of Business Development

Location

New York, NY

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