The state of retirement in the US is a cause for concern. Twenty-five percent of adults in the US have no retirement savings at all, and barely over a third of US adults report feeling like their retirement planning is on track. With the median retirement savings account only having $120,000, retirees will struggle to extract more than $1,000 per month after retirement for their basic needs—like housing, healthcare, food, utilities, and more.

The crux of the retirement crisis is a political issue, rather than a product-related one, but fintechs have a meaningful opportunity to address key parts of retirement, and open the door for more widespread and successful retirement solutions.

Automating and minimizing fees

Fintechs can make a sector-wide impact by continuing to innovate through automation. Letting consumers invest their money affordably through robo-advisors puts significant pressure on incumbents to drive down their prices.

While this may help make retirement products relatively more affordable, it may have some unintended consequences. Incumbents may consolidate in response to market pressures, generating greater efficiencies that make it even more difficult for fintech challengers to square up against more old-school competitors. In the long run, however, this may benefit consumers, as they may see more affordable and cutting-edge products regardless of the retirement solution they—or their employer—sign up with.

Simplifying jargon

A major barrier to entry is the complex language that retirement products use to describe themselves. Fintechs have an opportunity to move the needle by serving as an educational tool, helping consumers along their retirement-planning journey.

Doing so can have especially positive effects for younger generations, which are notably unprepared for retirement. Forty-two percent of Americans aged 18-29 lack any retirement savings, which is both a worrying trend as well as a major gap that’s ripe for fintech intervention.

Solving for compliance

A growing proportion of consumers are interested in diversifying the kinds of assets they invest in for retirement. Some of these vehicles are still relatively unregulated—such as crypto—but retirement solutions can edge out competitors by offering these assets to consumers as soon as it’s feasible and legal to do so.