Using Capitalize to Rollover Retirement Savings with Bevin and Gaurav Sharma

On this episode of Financially Naked: Stories from The Financial Gym, our host is Bevin Morgan, a Lexington-based Financial Trainer, and she is joined by the CEO and co-founder of Capitalize, Gaurav Sharma. They are going to talk about the importance of rolling over legacy retirement accounts and how Capitalize makes it easy.

Gaurav Sharma is CEO and Co-Founder of Capitalize, a venture-backed fintech company focused on helping people save for retirement. Before founding Capitalize, he worked for some of the best-known financial institutions, including JP Morgan, UBS, Morgan Stanley, and as an investor at well-known hedge fund Greenlight Capital. An Australian by birth, Gaurav lives in New York City with his family. 

Podcast Notes

• Capitalize is a fintech company that uses technology to make saving for retirement in the United States easier and more accessible to everyone. 

• With most retirement savings being linked to our employers, there are many flaws in the system. One of the biggest being the obvious, we often switch employers after a couple of years. 

• The process of rolling over a 401k is antiquated. Some folks don’t even know where the money is in their legacy accounts, making the process seem intimidating.  

•  This is where Capitalize comes in! They are helping people find lost assets and invest them well.  

• They do this by digitizing the process of finding misplaced retirement savings and helping clients submit rollover requests. This makes the process very simple, even if you don’t know where your money is currently. This service is FREE to the client.
  
  How does Capitalize work?

• They first help the consumer by finding old accounts. Even if you don’t know the brokerage, Capitalize has built a database that maps employers to 401k brokers. 

• Then they help them decide where to move the money and why. There is a lot of confusion about the best account to move legacy accounts. Some common questions are: ‘what kind of account should I pick?’ or ‘What platform is best suited for my goals?’ 

• They help clients navigate the decision with an online comparison experience. Based on info provided by the client, they will give you a few great options AND help you compare. After the client has chosen the account, Capitalize then helps the user open it. 

• They then help with the most challenging part. Each provider has their own rules and requirements for rollovers which makes the process very cumbersome and sometimes confusing. What Capitalize has done is digitize this last step. They know how to process these various rollovers and help the client submit the request to the legacy provider. If it requires human intervention, Capitalize has a fully licensed customer service team to handle these circumstances. 

• It is an end to end experience. Capitalize will help you from start to finish AND it is completely FREE for the client.
  
  Some Staggering Estimates about Legacy Retirement Funds 

• There are $700 billion (with a B) worth of rollovers to potentially process each year, affecting 15 million people.  

• There’s an estimated 24 million forgotten 401k accounts in the US with $1.35 trillion (with a T)  worth of assets in them. 

• These figures come from research done with The Center for Retirement Research at Boston College.

• Check out this blog post for more info: The True Cost of Forgotten 401(k) Accounts – Capitalize
  
  WHY CAPITALIZE IS REVOLUTIONARY   

• Consolidating legacy accounts is an important first step in saving for retirement.

• Bevin recommended the service to one of her clients who found out they had $24,000 in these kinds of accounts, which Gaurav points out has the potential to grow exponentially if invested well.  

• Capitalize is a platform to help people manage employer-sponsored retirement accounts. Even though the system is far from perfect, employer accounts aren’t going away any time soon. There is a need for easy management as people tend to change employers every few years. This is the first platform to really do this work! 

• People who are self-employed or have other kinds of investment accounts (such as 403b accounts) are welcome at Capitalize
  
  A LITTLE MORE ABOUT GAURAV

• As you can tell from the great accent, Gaurav grew up in Australia. 

• He studied abroad in the US while in college. 

• After returning home, he realized there was so much about the United States he liked and wanted to move here to start his business after graduating. 

• He worked on Wall Street in 2008, amidst the biggest financial meltdown in 80 years, with a focus on advising banks and financial institutions. 

• From there, he transitioned into the investment world. There he learned that wealthy folks have the access to the best resources and tools. This should not be the reality and there is an opportunity to serve people at levels of finance. This was a motivator behind starting the company, Capitalize. 

• He wanted to make finance less intimidating and more accessible, which is exactly what we at the gym are passionate about and love to hear! 
  
  Questions from Bevin: 

• Best financial advice you’ve ever gotten?
  Keep it simple. (When it comes to investing)
  You often feel like you should be doing more, but in reality, the simplest approach has stood the test of time. Hands off, participate in the market growing over time, and get the basics right. You can grow and compound without having to stress about it daily. 

• What do you want to do when you retire?
  Gaurav personally doesn’t have the goal of retiring early, or even at all. He enjoys all of his work and pursuits but hopes to be able to travel more in the future while continuing to do this work and have more great conversations with amazing folks like Bevin.
  

Check out Capitalize 

Instagram: @hicapitalize
Website: https://www.hicapitalize.com/

Meet The Trainer 

Bevin Morgan