Matthew Koppelman: Empowering Confident Financial Choices
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We often see financial planning as a maze of numbers and strategies, but for Matthew Koppelman, it’s a personal mission to empower people to make confident decisions about their financial future. As a financial planner at Prudential, he wishes to demystify complex financial concepts and provide tailored guidance for each of his clients. This interview will bring you closer to understanding retirement planning and your own financial behavior and will set you on a path to financial literacy.
In this article
Retirement readiness
Joy Wallet: What are foundational steps everyone should take when planning for retirement?
Matthew: Planning for retirement can be such a daunting task for people that it leads to inaction. I'd recommend breaking it down into three different areas:
- Organization — Where are all of my accounts? Do I have old employer-sponsored plans that I haven't checked in a while? Do I have a login and recent statement for all of my accounts? How about a recent social security estimate? Do I have a pension? Start with pulling everything together and getting it into either a physical folder or somewhere on your computer.
- Expenses — What am I spending right now? Most of the clients I support are accustomed to a certain lifestyle and want to maintain that in retirement. Very few know how much money they spend before we start working together. Pick an average month and track your expenses so you can get an idea of how much you'll need going forward. This is where people get stuck, but it's critical to put together an accurate plan.
- Identify the "gap" — How much of your current expenses will be covered by social security and/or pensions? This will give you the annual dollar amount of any potential gap that needs to be filled. These are the first steps we take when working with someone who is about to retire and the same steps I'd suggest for someone who isn't a client.
Promoting financial literacy
Joy Wallet: How can businesses foster financial literacy among their employees?
Matthew: I've seen businesses of all sizes (20 employees to 20,000 employees) have success with incorporating financial wellness programs into their benefits. The key is to cover topics outside of just retirement planning because employees have different focuses depending on where they are in their careers. A few common topics are managing student loans, saving for college, estate planning strategies, and healthcare in retirement.
- In under 3 minutes, start investing spare change, saving for retirement, earning more, spending smarter, and more.
- Make your first successful Recurring Investment (min $5) - get your $20 bonus within 10 days of following month
- Over 13M All-Time Customers
- Over $22B Invested
Smart tax strategies
Joy Wallet: What tax strategies should individuals consider to maximize their investments?
Matthew: Work with a professional! These jobs exist for a reason. I've seen too many instances of people trying to save a few dollars by doing their own taxes or planning, but it ends up hurting them in the long run. Don't be afraid to outsource things that aren't your expertise. A few strategies that I feel are important are:
- Building different "buckets" of money based on how they're taxed (capital gains, income, tax-free).
- Focus on lowering taxes over your lifetime rather than just a year to year basis.
- Asset location is just as important as asset allocation.
Tech and finance
Joy Wallet: How can technology enhance personal financial management?
Matthew: Technology really boosts how we manage our finances. Budgeting apps like Mint and YNAB make it easy to track spending, while automated savings tools help you save without even thinking about it. Robo-advisors simplify investing, and expense trackers give you real-time insights into your finances. Plus, bill management services take the stress out of payments, and credit monitoring keeps you updated on your credit health. Overall, these tools help you take control of your money and work toward your financial goals with greater ease.
Investment principles
Joy Wallet: What general investment principles support long-term financial security?
Matthew: Diversification in every aspect is very important — time horizon diversification, tax diversification, proper asset allocation, etc. Don't try to outsmart the market! There is a reason for the gap between investment and investor returns. Focus on your time in the market rather than timing the market.
Comprehensive risk assessment
Joy Wallet: What factors should be considered in a comprehensive risk assessment?
Matthew: When you're looking at financial risks for investing, think about a few key things. First, how’s the market doing? Economic trends and global events can shake things up. You also want to check the creditworthiness of any companies or bonds you're considering.
Liquidity matters, too. Can you easily sell an asset if you need cash? Keep an eye on operational risks — things can go wrong in processes or systems. Regulatory changes might impact your investments, so that’s worth noting.
If you're investing internationally, currency swings can affect your returns, and inflation can eat into your profits. Diversifying your portfolio helps spread out risk, and your investment timeline will shape how much risk you can handle. Finally, looking at past performance can give you clues about potential risks, but in no way does that guarantee future returns. Keeping these factors in mind will help you make smarter investment choices!
- In under 3 minutes, start investing spare change, saving for retirement, earning more, spending smarter, and more.
- Make your first successful Recurring Investment (min $5) - get your $20 bonus within 10 days of following month
- Over 13M All-Time Customers
- Over $22B Invested
Behavioral finance
Joy Wallet: How does understanding behavioral finance improve personal financial decisions?
Matthew: Understanding behavioral finance can really help us make better financial decisions. It shines a light on the biases and emotions that often trip us up, like overconfidence or the fear of losing money. By being aware of these factors, we can think more clearly and avoid some common mistakes.
It also encourages us to take a long-term view, which is super helpful in resisting the urge to panic when the market fluctuates. Plus, for those working with financial advisors, it makes for more meaningful conversations, as advisors can better address clients' emotional needs. Overall, tapping into behavioral finance helps us make smarter, more informed choices that can lead to better financial outcomes.
Estate planning for all
Matthew: Whether people know it or not, everyone already has an estate plan. Your default plan is dictated by the state you live in. For me, I don't want the state any more involved in my legacy planning than they have to be. I want to be the one deciding who the guardians of my future children are, who makes medical and financial decisions on my behalf, and how my assets are distributed after death.
Personalized financial strategies
Joy Wallet: What considerations are critical when tailoring financial strategies to individual needs?
Matthew: I like to ask people how money was perceived/discussed when they were growing up. A lot of our financial habits stem from childhood, and you can tell a lot about why people have certain habits based on how they grew up. Going beyond the numbers is an important part of any financial plan. I have clients who are the exact same age, live in the same state, and sometimes even worked for the same company, but have completely different financial plans. What are you passionate about? Travel? Charitable giving? Leaving a legacy? Pure growth? These are just a few of the goals that can influence how a plan is structured.
Universal advice
Joy Wallet: What's an essential financial planning tip you would offer to anyone?
Matthew: Don't be afraid to ask for help. Start planning early, no matter the goal.
- In under 3 minutes, start investing spare change, saving for retirement, earning more, spending smarter, and more.
- Make your first successful Recurring Investment (min $5) - get your $20 bonus within 10 days of following month
- Over 13M All-Time Customers
- Over $22B Invested
Maintaining tax efficiency
Joy Wallet: How can individuals maintain tax efficiency throughout their financial planning?
Matthew: There are dozens of different types of investment accounts and all have their own tax rules. For example, after-tax brokerage accounts, Traditional IRAs and 401k’s, Roth 401k’s and IRAs, HSAs, etc. Utilizing several of these accounts can provide tax-diversification in retirement, giving you more control over your tax liability.
Regular financial reviews
Joy Wallet: Why is regular review of financial plans important for long-term success?
Matthew: Regular financial planning reviews are super important because they help you stay on track with your goals. Life changes — like a new job, moving, or family changes — can shift your financial needs. By reviewing your plan regularly, you can adjust for any changes, catch any potential issues early, and make sure you’re on the path to achieving your dreams. Plus, it gives you peace of mind knowing you’re in control of your finances!
Finding joy
Joy Wallet: What brings you the most joy in life?
Matthew: Spending time with my family on the beach in Hawaii and knowing my clients have financial peace of mind.
Financial planning and investment advisory services and programs are offered through Pruco Securities, LLC (Pruco)(Member SIPC), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Insurance and securities products and services are offered through a registered representative of Pruco and an agent of issuing insurance companies.
Prudential and its representatives do not give legal or tax advice. Please consult your own advisors regarding your particular situation. Joy Wallet, Mint, and YNAB are independent organizations and are not an affiliate of Prudential Financial.
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