This funding will advance technology and product development for PlanGap® Social Security protection and other retirement income risks
ATLANTA–(BUSINESS WIRE)–PlanGap, a product innovation company creating a new class of retirement income protection solutions with leading insurance carriers, secured $9.4 million in Series A funding to support their mission of bringing more Social Security protection products to market. This investment was led by Cultivation Capital and participated in by thought leaders in the insurance, reinsurance, finance and insurtech industries.
The newly released 2021 Social Security Trustees Report forecasts a bleak future for the Social Security trust fund. The Trustees indicate that if Congress continues to fail to address Social Security’s financial challenges, that by 2033, the trust fund will be depleted and only able to pay out approximately 76% of scheduled retirement benefits at that time.
“It is disclosed on every single Social Security statement that by 2033 the program may need to reduce benefits by 24%,” said David Duley, founder and CEO of PlanGap. “The average household plans to receive nearly $1 million in lifetime benefits from Social Security, and for the vast majority of Americans, these benefits are the bedrock of their retirement income plan. They want and deserve a way to protect their promised benefits from being used as a political football.”
According to the most recent Social Security Confidence Survey (conducted after the 2021 trustees report was published), seven out of 10 Americans age 45-plus doubt they will receive their full Social Security benefits as promised. If the disclosed reductions take place, an average two-income household would see their payments decrease by $700 per month. Furthermore, a recent Transamerica retirement survey affirms that concern about future reductions in Social Security is the largest unaddressed fear in retirement planning in America.
Providing Control In Retirement Planning
“PlanGap’s intellectual property, technology and product designs have enabled the insurance industry to provide Americans with new opportunities for control and peace of mind in their retirement income planning,” said Cliff Holekamp, co-founder and managing director at Cultivation Capital, who joined PlanGap’s board of directors. “Soon every prudent financial planner in America will have to make sure their client’s Social Security income promises are PlanGap protected.”
Also joining PlanGap’s board of directors is John Hamlin, a veteran investor and former chairman of the board at REI, who has served on other high-profile boards such as Perficient (PRFT) and Safeco Insurance.
Richard Drye, managing director for PlanGap added, “Our goal has been to partner with the best in the industry. PlanGap’s recent announcements with Sammons-North American, Annexus, Ash Brokerage and Insurex, coupled with this Series A led by Cultivation Capital, reinforces our commitment to bring PlanGap solutions to the masses.”
Headquartered in Atlanta and founded in 2017, PlanGap is a product innovation company creating a suite of “trigger-based” annuity and life insurance products – retirement insurance – that solve previously unaddressed financial concerns for retirees. PlanGap, through its collaboration with market leading insurance carriers and distribution partners, empowers people to protect themselves against disruptions to their retirement income, providing solutions for those worried that institutions have made retirement promises they cannot, or will not, keep. Visit plangap.com for more information.
About Cultivation Capital
Cultivation Capital is an early-stage venture capital firm. Since its founding in 2012, the firm has invested in over 150 companies and is recognized as one of the most active early-stage investors in the United States. Visit cultivationcapital.com for more information.