02.24.26 Ask An Advisor With Wes Moss

Summary

The Clark Howard Podcast

Episode: "Ask An Advisor With Wes Moss"

Date: February 24, 2026
Host: Clark Howard
Guest Advisor: Wes Moss

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Episode Overview

In this episode, Clark Howard welcomes financial advisor Wes Moss to answer selected listener questions and explore topics including inflation’s real-life impact, early retirement feasibility, effective strategies for gifting savings to young adults, portfolio management in retirement, handling windfall income, and estate planning with trusts. The show blends practical money advice, relatable personal stories (including a vivid "Steak Night Sticker Shock" analogy), and evidence-based answers grounded in economic history and personal finance fundamentals.

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Key Discussion Points & Insights

1. Inflation, the Cost of Steak, and Protecting Purchasing Power

[01:22–08:56]

• Wes Moss’s “Steak Night Sticker Shock” Story:
  • Shares a personal story about his son’s birthday steak dinner and the surprising cost of beef.
  • “It was as expensive as I’ve ever remembered. It was a sticker shock moment.”
  • Beef prices have risen 65% since before COVID ($7.50/lb → $12.50/lb for steak; $3.50 → $7/lb for ground beef).
• Inflation and Investing:
  • Connects the rising cost of everyday goods—like steak—to the importance of investing, not just saving.
  • “If you want to keep up... there’s very few things that allow us to continue to do that over long periods of time than investing.” ([07:12])
  • Visualizes cash not invested as “wilting dollars,” losing purchasing power over time.
• Supply and Demand Dynamics:
  • Explains the reduction in U.S. cattle herds (130M in the 70s, now 83M) amid higher demand and population.
  • Notes ranchers are processing cattle instead of growing herds, likely perpetuating high beef prices.
  • Best value for steak: Costco.

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2. Early Retirement Feasibility & FIRE Movement

[08:56–12:50]

• Listener Q: Couple in their 20s Aiming to Retire in Their 40s
  • Detailed scenario: $60k each in income, rental income, maxed HSA/Roth IRAs, significant home equity.
• Wes Moss’s Insights:
  • Early retirement is rare but possible with high savings and discipline—“the very people that are able to retire early” are likely “1 in 100, 1 in 50 people.”
  • Main challenge: Funding 50+ years of retirement is “not overly realistic if you want to have children.”
  • Sacrifice is necessary: Early retirement means “huge sacrifice to get there and then continued sacrifice for the rest of your life. That’s why... it’s not overly realistic if you want to have children.”

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3. Helping a Young Adult Nephew: Roth IRA or Custodial Account?

[12:50–16:08]

• Listener Q: Aunt wants to help 22-year-old nephew (recently orphaned) with $35k in savings.
• Wes Moss’s Recommendation:
  • If money is a gift “for him but not yet his,” avoid putting it directly into a Roth IRA (would give him access).
  • Suggests investing in a brokerage account in her name, letting the money grow until he’s more mature—“you’re really doing him a favor by just investing the money, knowing it's earmarked for him, and wait seven, eight years to say, hey, I had 35 for you, and now I have 70 or 80 because it’s doubled over time.” ([15:09])
  • Also recommends a “parent match” strategy: encourage saving in a Roth with matching contributions.
• Clark Howard adds:
  • This matching method helps teach good money habits—“He could watch that grow. So that might help teach him without exposing the rest of the money.” ([15:46])

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4. Retirement Planning Tools (Path by Wealthfront) & What to Watch Out For

[16:08–19:42]

• Listener Q: Are free online planning tools (like Wealthfront’s Path) reliable?
• Wes Moss’s Advice:
  • “Any planning is better than no planning at all.”
  • Cautions that optimistic default rates of return (like 8–9%) can make projections look “bombastically large.”
  • Users should adjust assumptions conservatively, such as lowering growth rates, or specifying higher income targets to ensure realism.

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5. Stock Market All-Time Highs: History, Nerves, and Data

[22:35–28:50]

• Wes Moss on Investing at Market Highs:
  • Addresses the anxiety many investors feel about all-time highs and fears of imminent correction.
  • Key insight: “All time highs are a feature of the market. They’re not a bug, they’re a feature of investing.” ([22:42])
  • Data: After a market high, 12-month forward returns average ~12.7% (Fidelity study, 1950–2024), often slightly outperforming average returns outside of record highs.
  • “Corrections are relatively infrequent once the market’s hitting an all-time high... a lot of things have to be going right in order to get to an all-time high.” ([27:10])
  • Investor sentiment and earnings growth underlie sustained market highs.
  • “If earnings continue to march forward and grow, then it is very likely that stocks can continue to do the same.” ([28:11])

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6. Optimal Portfolio for Low Withdrawal Retirees: How Much “Dry Powder” Money?

[28:50–30:47]

• Listener Q: “Is there ever a case for 100% equity in retirement, if withdrawals are very low?”
• Wes Moss’s Rule:
  • “Dry powder” (safe, liquid funds) should be calculated as 3x your annual withdrawal needs—not as a fixed percentage.
  • Example: If withdrawals = 2% per year, the “dry powder” might be just 5–10% of the portfolio, not 30–40%.
  • “From the numbers you’re giving me here, Kirk, I think 30 to 40% in dry powder seems way, way, way too high.” ([29:41])

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7. Windfalls, Tax Management, and Planning for Lumpy Income

[30:47–34:22]

• Listener Q: Attorney couple expecting a big contingent-fee windfall—advice on withholding, saving, and investing appropriately?
• Wes Moss’s Framework:
  • For those with lumpy (irregular) income, maintain at least 1–2 years’ living expenses in accessible accounts (high-yield savings/money market).
  • Use retirement accounts strategically, e.g., 401k + profit sharing plan (up to ~$72,000 pre-tax), especially in high-income years.
  • Ensure compliance with “safe harbor” IRS rule: 110% of last year’s taxes paid in to avoid penalties.
  • Remainder beyond reserves can be invested in a taxable brokerage account.

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8. Estate Planning: When to Use a Corporate/Commercial Trustee

[34:22–37:12]

• Listener Q: At what wealth level is it appropriate to consider a commercial (corporate) trustee?
• Wes Moss’s Guidance:
  • Corporate trustees are mainly for legacies needing long-term stewardship (e.g., trusts paying heirs income for decades).
  • “Most trust companies want at least a million dollar minimum.”
  • Use case: If you want to have your assets managed and distributed per your wishes for 50–100 years, a corporate trustee “becomes the gatekeeper of your wishes.”
  • For immediate inheritance (no restrictions), heirs can manage funds directly without need for a trust company.

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Notable Quotes & Memorable Moments

• On sticker shock and inflation:
  “It was as expensive as I’ve ever remembered. It was a sticker shock moment. Do you see how much this is? This is a big treat.”
  —Wes Moss ([03:35])

• Why invest?
  “If you want to keep up... there’s very few things that allow us to continue to do that over long periods of time than investing.”
  —Wes Moss ([07:12])

• On early retirement and the FIRE movement:
  “Any sort of family and size really complicates being able to totally stop working in your 40s... You’ve gotta now retire and that money has to last for half a century.”
  —Wes Moss ([11:49])

• Teaching a young adult good habits:
  “You’re really doing him a favor by just investing the money, knowing it's earmarked for him, and wait seven, eight years to say, hey, I had 35 for you, and now I have 70 or 80 because it's doubled over time.”
  —Wes Moss ([15:09])

• Market highs are normal, not alarming:
  “All time highs are a feature of the market. They’re not a bug, they’re a feature of investing.”
  —Wes Moss ([22:42])

• Portfolio withdrawal rule:
  “The dry powder calculation is not a percentage. It actually starts with a dollar amount… If you have a $750,000 portfolio, that's only 5%.”
  —Wes Moss ([29:31])

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Timestamps for Key Segments

• [01:22] – Introduction and "Steak Night Sticker Shock"
• [08:56] – Listener Q&A: Retiring in 20 Years (FIRE)
• [12:50] – Listener Q&A: Gifting Savings to a Young Adult
• [16:20] – Listener Q&A: Using Wealthfront’s Path Retirement Tool
• [22:35] – Stock Market All-Time Highs: Should We Be Worried?
• [28:50] – Listener Q&A: Portfolio Allocation for Very Low Withdrawals
• [30:47] – Listener Q&A: Managing Irregular Windfall Income
• [34:22] – Listener Q&A: Corporate/Commercial Trustees for Estates
• [37:12] – Closing remarks

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Episode Tone & Approach

• Friendly, relatable, practical.
• Wes Moss frequently uses vivid anecdotes and analogies (e.g., steak as "food dollars") to demystify economics.
• Advice is data-driven but acknowledges emotional and behavioral realities (like nerves around market highs or the challenges of intergenerational financial gifts).
• Listeners are encouraged to run their own numbers, plan conservatively, and “never stop asking questions.”

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For more advice, resources, or to submit your own question, visit www.clark.com/askclark.

Transcript

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[Clark Howard]

Welcome to Ask an Advisor. We here at Team Clark go deeper. We get into the weeds.

[Wes Moss]

We're definitely doing that today.

[Clark Howard]

Investing money, planning for your future. And Wes Moss, you love a food analogy.

[Wes Moss]

Well, this is really not even a food analogy. This is a food story that impacts almost everyone.

[Clark Howard]

Right.

[Wes Moss]

But unless you're a vegan, you're going to want to hear this story.

[Clark Howard]

Okay. And then later on you're also going to talk about the stock market, you know, hitting all time highs and should we be. Do we think that correction is I

[Wes Moss]

always get nervous with an all time high.

[Clark Howard]

Right, Right.

[Wes Moss]

But there's a lot of history and statistics that we can learn from that. Tell us about what how markets behave once it hits an all time high.

[Clark Howard]

I expect a food analogy in this episode somewhere. I know you can do it.

[Wes Moss]

I'm gonna have one better financial burrito. I'm gonna, I'm gonna one up you and make this whole story about food.

[Clark Howard]

Okay.

[Wes Moss]

I'm gonna call this. If I had to label what I'm about to talk about, I would call it Steak Night Sticker Shock. Steak Night Sticker Shock because this happened. And my 10 year old just had a birthday. He, out of all of my four kids, just enjoys food more. My other boys are more like, well, whatever we're eating, fine. They just want to eat. My 10 year old wants to talk about what we're going to eat. And when I was 10, I don't think I ate shrimp. He's like, can we get shrimp, little guy? Yeah. And he loves steak so much. And he. So he's one of the few of any of my kids that actually helps me when I'm grilling hamburgers or steaks. And he loves doing it. And he brought me a recipe the other day that he found on YouTube and it was a new way to cook a steak. And the new way to cook a steak is to not. This is his idea. And I didn't even totally believe and think it was going to be a good idea, but it was cook the steak without any seasoning, which is a huge, huge no, no in my house. And then you, after it's cooked according to this YouTube recipe, because you're putting lemon in this almost chimichurri like sauce, it sucks up all the flavor. So you do get a bunch of seasoning and it's melted butter and it's herbs and it's lemon and salt and pepper and it's an unseasoned steak that's cooked that then serves, supposedly brings it all up. And by the way, the story of that is that it actually won the taste test between the season versus not two out of three. Mike is like the new way we did it. Anyway, that's besides the point. The point here is to try to figure out how to continue to afford being able to eat steak once in a while and eat burgers on a regular basis, as that's a staple in our American diet for a lot of folks. And when we went to the store to get the meat, it was as expensive as I've ever remembered. It was a sticker shock moment. I said, sammy, I'm like, do you see how much this is like, this is like a big. This is a big treat. Because when you're feeding a big family, it's a really expensive proposition. And I don't remember it feeling so ridiculously expensive. And then I went and looked up beef prices and guess what? We are at an all time high. And there's a lot of reasons for that. But since COVID the per pound on average in America was about $7.50 to buy steak today, it's at 12.50. That's up 65% when it comes to ground beef. Call it about 350 before COVID Now we're pushing $7 a pound. So that's up almost 80% since before COVID a very staple in our diets. Again, not everyone, if you're vegetarian, you're not. You're not really excited about this story, but you're still listening because it applies to anything that we buy. And I think of why we invest to begin with, it has to do with protecting our purchasing power. And there's this concept that the way I think about inflation, and I think it just rolls off investors, rolls right off your back. It's like, oh, I'm investing so that I can beat inflation. I'm investing to protect my purchasing power. But that's so broad. If you start thinking about it in dollars in your wallet that are earmarked for certain things like a car or hamburgers or steak or anything, I think food dollars, car dollars, housing dollars, you start to get a sense that if they're sitting in your wallet and the visual there is that they're not invested, so it's literally sitting in your wallet. It just continues to lose its strength over time. It's wilting dollars. And if you want to keep up, and here's my chart over the past five years, this is a little bit different than my Covid example. But just looking back over five years, the US consumer dollar, our purchasing power is down 20%. CPI is up about 25%. Beef prices in general are up about 50%. And if we've invested that dollar instead of leaving it in our wallet, that dollar in the S&P 500 has grown by 90%. So if you start looking at the difference between being able to continue to afford the things that appreciate even faster than the rate of inflation, there's very few things that allow us to continue to do that over long periods of time than investing so that we continue to afford the same things we were able to afford three years ago, five years ago, even if that particular item or category goes up by faster than the rate of inflation. And that would have worked here when it comes to steak. Now, the bad news on steak prices, beef prices in general, is that they're not going to get any better anytime soon. If you look at the dynamics, which I think is fascinating because I love the study of economics, most of the beef in the United States does come from the US 85% of our hamburgers and our steaks, they come from the US and it's really hard being a rancher. We had 100 in the 70s, we had 130 million head of cattle in the United States. Today we have something like 83 million. And we have a much larger population. So we have much higher demand and we have much fewer that we just have less cattle in the United States. And ironically, usually when you have a demand squeeze like that, the cow may become more affordable. But these are not widgets that you can just produce more steaks. This takes time. Time. It takes a couple of years. What's interesting is that because prices have gone up even though we have less cattle, ranchers have had to turn more cows, process them, as opposed to make more cows. So we're in a situation right now where because prices are high, they're not even increasing their cattle herds like they probably should. So we're going to continue to have a lower supply of cattle. I don't see the demand going anywhere unless we get to certain, maybe for steak because the price will erode some of the demand. But the reality here is that this is a very special, very special treat. I guess steak night's always been a special treat, but it's even more so to this day. Still by far best value, best steaks for the best amount of money. No question Costco still wins.

[Clark Howard]

Yep. Okay, this question's from Anan Steak Night sticker shock. My wife and I are in our early 20s and we would like to retire within 20 years so we can travel and enjoy life longer. I want to know if this is possible and how it would look once we get there. We each work at $60,000 a year jobs and have a rental pulling in about $6,000 a year after expenses. We have some small side hustles as well, but won't mention numbers. Just to keep this simple, I max out my HSA, we both max out our Roth IRAs and she contributes 5% to a Roth 401k with no employer match. We have about $200,000 in home equity from our primary rental and about $50,000 saved. I'm aware it will be a challenge to maintain our Lifestyle after only 20 years of saving and investing, but we are fairly determined to make it possible. So please tell me if and how to adjust. Additionally and arguably more importantly, how, how can we go about retiring once we feel we have enough? We obviously can't pull from the Roths until 20 years after our target retirement date. So what do we need to do to live for that remainder period? Thank you for all your insight. You've been a great Addition to the

[Wes Moss]

team, I guess it's anonymous in Texas, so. Anon in Texas, let's just do some math here. You're in your 20s, and you want to retire in your 40s, and you do have the savings Runway to do it. And I'm a big believer in retiring sooner. I mean, I wrote a book called you could retire sooner than you think. And then I have the book that's coming out this year is called the retire sooner method. So I'm a big believer in being able to shave years off of a traditional retirement age. Traditional retirement age is mid-60s. So to shave that off to the early 60s or the mid-50s, that's usually what I'm trying to help folks with, because it's so hard. It's not that you can't save a bunch of money over the next 20 years. Right. And by the way, anybody talking about savings when they are in their 20s, those are the very people that are able to retire early. It's a small percentage of the population that has the foresight and the discipline to even do it. So the fact that you're even asking the question means you're probably one of those folks, 1 in 100, 1 in 50 people that has a real shot to be able to do it.

[Clark Howard]

Wow, Is that even. I can't believe it's even one in 100. I would think it'd be one in like a thousand.

[Wes Moss]

It's. It's higher in your. I don't know the exact number, but it's a really low number.

[Clark Howard]

Yeah.

[Wes Moss]

And so you have the Runway to do it. I think the challenge, and this is almost where the fire movement would come in, is that you. You want to save almost everything that you're earning today, or 50% of everything you're earning. And then when you get to your 40s, then you have to have a really limited budget for the rest of your life. So it's. I look at a purifier type movement as huge sacrifice to get there and then continued sacrifice for the rest of your life. And that's why, to me, it's not overly realistic if you want to have children. So maybe if it's just you and your spouse and you can totally control your spending, it is fire, in my opinion. Yeah, it is possible. But if you end up having one or two or three or four kids, then being able to stop working in your 40s becomes pretty unrealistic for 99.9% of folks who are earning a living wage like you and your spouse. And you're saving a bunch, that's usually just not enough. Because if you think about it, you've got to now retire and that money has to last for half a century, right from 40 to 90. So yes, you can do it, but any sort of family and size really complicates being able to totally stop working in your early 40s.

[Clark Howard]

We have another question from Texas. This one's from Jamie. Jamie says, my sister passed away in 2017 and had a 14 year old son. I'm sorry for your loss, Jamie. That's terrible. My nephew is now 22. He is just starting to understand money and trying to live on his own with a roommate. I have a little money set aside to help him. Around 35,000 and so far I've used some to help get his apartment set up and assist with groceries. He lives in West Virginia, if that's relevant. I would like to take part of the money and invest it for him. But he is not yet responsible enough to do this on his own. I thought about opening a Roth IRA and fully funding it for a few years to kickstart his retirement while he's so young. He does work at a pizza restaurant making some money and is trying to get a better paying job. I don't see college or any trade school in his future. What's the best way I can help him get a good foundation while not tempting him to pull the money out and use it for unnecessary things? Thank you so, so much for all the helpful advice. My husband and I listen to you regularly and you've really helped us set ourselves up for an eventual cushy retirement.

[Wes Moss]

Cushy, I love that. Jamie, it sounds like this is your money that you're investing for him as opposed to his money. I think that's the important distinction to try to answer this. It sounds like he has wages so he could have a Roth IRA and you could make contributions to that. The problem there is that because he's 22, that really is his money. And it sounds like he's maybe not responsible enough just yet to be able to access it. So it's really your money you're investing for him. So in this case, not that a Roth wouldn't be a good idea for him to do with his own money and his own wages, but I don't think you want to do that for him because then it becomes his money, which then leaves you with essentially a brokerage account situation and that's fine too. The way I would look at this is that he's 22. Imagine when he's 30 and it's Thanksgiving. And the 35K that you put away for him, you invested it in a, in a broad stock market index, and you have eight years to let it grow. Imagine that $70,000 at Thanksgiving in eight years from now. Maybe in eight years from now, your nephew has matured and could handle having a big chunk of money in an account and not, let's say, waste it or spend it unwisely. I think that's your best bet, is not that you want to totally hide it from him, but I think you're really doing him a favor by just investing the money, knowing it's earmarked for him, and wait seven, eight years to say, hey, I had 35 for you, and now I have 70 or 80 because it's doubled over time. And then he may be responsible enough to really utilize it.

[Clark Howard]

I also wonder about if he starts making money and is able to put anything aside for himself. Maybe you do that parent match kind of idea that, you know, if he puts $20 in a Roth, you match it kind of a thing to help him get in that habit and he could watch that grow. So that might help teach him without exposing the rest of the money.

[Wes Moss]

I think it's a great idea too, right? You could say, look, I'd love for you to put 500 bucks a year just to get started into a Roth because you have earnings and I'll match it, and I think it's a great idea.

[Clark Howard]

Okay, Planning in North Carolina wrote this. And what are your thoughts on the Free path planning tool by Wealthfront? My wife and I have been relying on it to give us a general sense of whether we're on track for retirement. We're in our early 40s, but we worry. Sometimes it's too optimistic. Is it a good approximation of what a more expensive financial planner would help us do in terms of making sure we're on track to achieve a happy retirement?

[Wes Moss]

Here's the answer to that. Is that just doing any planning, even if it's on a piece of paper and it's a timeline and you're just crunching some numbers, is better than no planning at all. So to utilize something like Path that tool, I'm not super familiar with it, but I've seen it online and I've looked at what it does, and it looks a lot like most other financial planning tools, because really, there's not that many variables. It's what you have today, how much you're saving per year, when you want to stop working and stop saving and the biggest lever in any of these plans, besides putting in how much inflation is, which is another variable, is your chosen ror, your rate of return that you choose. And you're right. If the rate of return is set at 8% a year, these plans get mountainous and a little bit of savings and they're really long term. So you have this 30 year projection or 50 year projection. The next thing you know it says I have $37 million saved by the time I'm 95. So you want to be really careful about that rate of return on a lot of these plans. On a regular online calculator, you can just put in a number. You can say, oh, I want to grow this at 4 and a half percent, 5%, 6% to be more conservative in a plan like this, a lot of times what they'll do is they'll ask you what your risk tolerance is and you'll say, oh, I'm a moderately aggressive, or I'm an aggressive investor, I have most of money in stocks. And it'll assign a historical full stock rate of return to that. And they may be assigning you 8%, maybe 9. I don't know for sure at all. But it does make those numbers look bombastically large way out into the future. And in this case, if you're not able to go in and change the rate of return to a more conservative rate of return, you may have to do the plan a couple different ways. And you may want to go in and hypothetically say, well, answer the questionnaire. I don't know how they do it, that you're a really conservative investor.

[Clark Howard]

Or you could say you want to make 110% of your current salary or something else like more money than you think you would need. You know how they say, what percent of your salary do you want to.

[Wes Moss]

Right? Or yeah, but a lot of these more advanced tools will just say, what do you need? It'll say, hey, I need five grand a month in retirement or eight grand or whatever it is, but in order to control. And it's not that you're trying to lie to yourself here, you're just trying to take a more conservative stance to this as well. And it may take you saying that you're a more conservative investor than you are so that it runs it at 5% rate of return as opposed to 8 or 9. And it would be a really worthy exercise to try to do that.

[Clark Howard]

Speaking of the stock market all time highs, lots of people very, very nervous that we're in for a big Correction. We'll talk about that straight ahead.

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[Clark Howard]

moments when we could have done better. Like cutting your own hair. Yikes. Or forgetting getting sunscreen so now you look like a tomato.

[Wes Moss]

Ouch.

[Clark Howard]

Coulda done better. Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education and human help

[Wes Moss]

when you need it.

[Clark Howard]

Learn [e-mail]

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[Don McDonald]

You know what's funny about free financial advice? It's usually the most expensive kind. I'm Don McDonald from the Talking Real Money podcast. For over three decades, my co host Tom and I have been the antidote to the financial nonsense that fills the airwaves. We don't sell products. We don't have sponsors paying us to recommend their funds. We just tell you what has actually worked. Backed by decades of academic research, not some guru's gut feeling. Our listeners tell us we're like car talk for your Money. Minus the car problems with maybe even more bad jokes. You're already listening to a podcast right now, so finding us couldn't be easier. Just search for Talking Real Money or visit talkingrealmoney.com give us a few minutes. The worst that happens, you're mildly entertained. The best? You stop making your broker richer and start building actual wealth. Just search for Talking Real Money Talking Real Money is an educational podcast, hosts or affiliated with a registered investment advisor. For disclosures, visit talkingrealmoney.com welcome back to

[Wes Moss]

Ask an Advisor Wes Moss along with Krista Dibiaz answering your financial questions. As many as you'd like to throw at us here in the studio.

[Clark Howard]

Throw those at us [e-mail] ask and just indicate if you would like Wes to answer your question.

[Wes Moss]

It reminds me though that just the amount of questions we get, the nuances are endless. And the world of financial planning is infinitely it's an infinite set of questions because there are enough variables in our lives between age, family members, income tax rates, investment risk tolerance, time horizons. There's enough variables out there that essential and then rules with different types of accounts and then ways to invest. Really, there's an infinite set of questions and it's always an interesting reminder that as many questions as we get, you think, well there can any be, can't be more questions than that. There are always more because it's an infinite amount. Let's talk about markets. My natural reaction as a just a human if I take my advisor hat off. We've learned from very early days that we want to be buying when things are low and selling when things are high. And it's hard to argue with that. That's just kind of an overarching mantra about buying anything or investing in anything. So when markets hit new highs, I immediately get a little bit of a twinge and I get a lot of questions about this too. Hey, well, the markets have just done so well. Shouldn't we be, isn't this, shouldn't we be getting out? Should we be, isn't this the time? And so if you go back and look at market data, so we had 39 all time highs last year, meaning that The S&P 500 closed at a new high, new fresh high, that it's never closed up before. That happened almost 40 times. Not once, not twice, but many dozens of times in one year. In fact, on average we get something like 17 or 18 all time new, all time highs in any given year. Now, some years are zero if we're, if we're recovering, some years they're a lot. So they do tend to come in clumps and we've already had a few of them so far in 2026. So all time highs are. They're a feature of the market. They're not an an. They're not a bug, they're a feature of investing. They just don't necessarily feel all that comfortable because you go back to what you learned throughout your entire life and you think, oh, all time high, maybe we should be selling, not buying. Or if I'm invested, maybe I shouldn't stay as invested. So here's though the math and the history behind it, our returns next or moving forward after all time highs, are they worse than what they normally are or on average? And the short answer is no, they're not. Once we hit an all time high in the S&P 500, history shows us that on average markets do even a little better than they do normally and historically over the course of the next year and about the same on average over three years and about the same again over the next five. So if you go back and there's a lot of different studies on this, Fidelity, JP Morgan has multiple ways to look at this. But if you go back, fidelity study 1950-2024, after an all time high, we see that on average the 12 month return post all time high during that long period of time averages about 12.7% well during that same period of time. If you just look at any given day over the next year, its average is an average now at 12.4%. So technically, according to this, you even get a little bump extra over the next year according to history, if you look at it a different time frame, 1970, 1922 or to 2025 after an all time high, a year later, stocks average 9.4%. All days are just on average, if we're not at an all time high, right at 9%. So really, almost any way you slice economic and market history, there is something to the market achieving an all time high and then continuing on a relatively good run even better than average over the course of the next year. And that stays true for three years and five years as well. Even if you look at corrections, if you look at over the course of history, when it comes to stock market corrections, this goes back from 1950 through the end of 2024. Once a market hits an all time high, how often is it not down 10% over the next year? 91% of the time we haven't corrected by 10% or more over the next year. So even history tells us that corrections are relatively infrequent once the market's hitting an all time high. And that goes back to answering, well, why are we at an all time high? And the way I think of it, and if again I would put my economic history hat on and an investment person hat on, is that a lot of things have to be going right in order to get to an all time high. We don't just stumble upon a multi trillion dollar stock market that makes new highs. There's a lot of different things have to be going right. So that's number one, number Two is that bull markets do tend to last a lot longer than bear markets. And then number three, investor sentiment and momentum matter. And in order to get to all time highs and markets to push fresh ground, investor sentiment has to be relatively strong. Doesn't need to be in bubble territory, doesn't need to be exuberant territory, but it has to be, it has to be grounded in something that people feel good about. And usually Krista, that's about earnings. And if earnings continue to march forward and grow, then it is very likely that stocks can continue to do the same. So if we were in a period of time where we're hitting all time highs and earnings weren't growing, I would be very nervous. We're not in that period of time right now. Earnings continue to grow at a double digit close, which is even a little greater than what our earnings typically grow over the course of history. So I am the all time high doesn't make me nervous. It just makes me look back at history and make sure that I'm understanding it the right way.

[Clark Howard]

Okay, well, this question came in from Kirk in Iowa. He says, Wes, you mentioned portfolios should have some percentage of dry powder assets that are downturn resistant, especially in retirement. Is there a long enough time horizon or small enough withdrawal rate where having 100% equity is the right option? My wife and I are now in our 40s, semi retired and withdraw roughly 2% from our funds annually. Keeping 30 to 40% of our portfolio in lower yielding bonds or CDs just feels like we're leaving money on the table.

[Wes Moss]

Kirk, the dry powder calculation is not a percentage. It, it can always become a percentage, but it actually starts with a dollar amount. I think that's the difference here. And there's a couple of thoughts here. Let's just say I'm going to do some simple math. What I'm saying is that let's find a dollar amount and then we multiply that by 3, the annual amount you need to take out of your portfolio, spending wise, and then multiply that by three. And the reason it's three is because the average bear market is recovered by three. Once we get through three years, if you're only taking 2% out, that means that you have a super low, well below half the 4% roll rate, which would tell me that there's not all that much money you're pulling out of your portfolio. So think of it this way and we'll use round numbers. If you only need 1,000amonth from the portfolio or 12,000 a year, you only need three times that, 36K. So if you have a $360,000 portfolio, 36,000 is only 10%. If you have a $750,000 portfolio, that's only 5%. So from the numbers you're giving me here, Kirk, I think 30 to 40% in dry powder seems way, way, way too high because it's a function of what you need to pull out in any given year. And your number seems to be really low with that super low withdrawal rate.

[Clark Howard]

This came in from Lara in Florida. I love your show and thank you for all the great advice you share. I'm looking for guidance on how to best allocate a large influx of income we expect this year. My husband's an attorney who began working for himself last year and he has several large contingency cases that are expected to pay out. We do set aside funds for taxes, although I'm curious what percent you would recommend setting aside. And beyond that, I'd like advice on how to divide the remaining money. Currently we max out our IRAs, fully fund our 529 plans, have a taxable brokerage account at Schwab. My main question is around money we may want to access in the short to medium term. How should we think about allocating funds that aren't earmarked for retirement or education? Should that money simply remain in a high yield savings account? Or are there other options that balance accessibility with growth?

[Wes Moss]

Lara, this is what I'm thinking about here in this situation. So it's a new firm your husband has set up. When you're in a contingency type law, you're going to have super lumpy income. You may have a year where you have nothing and then you have a. You win a couple, couple of cases is what you're saying. You could have a couple million dollars all of a sudden in one year. So it is a problem when it comes to managing cash flow. So I think that part of it's easy is that for somebody like you, you may need an entire year's worth of spending, maybe even two that would be in just good old fashioned accessible brokerage money. I don't think two full years of spending needs to be sitting in high yield savings, but at least one year so that you can smooth out the lumpy income that will come from your husband's firm. The other thought here is that usually brand new businesses have not set up retirement accounts yet. So one thing you could do if you haven't already done it, is make sure that there is a retirement plan set up and, and a 401k profit sharing plan for your husband's law firm. You can, between the 401k contribution and the profit sharing, you can get something like $72,000 to go in there pre tax. And again, that might make a whole lot of sense if you have a year where you have a huge amount of income that comes in and from a tax perspective you're going to have to withhold. Remember the 110% rule when it comes to taxes. Now I'm not a CPA consult your tax advisor for this, but the safe harbor for taxes is just to make sure you've paid in 110% of what you owed last year. That way you have no penalty and you can pay your taxes by the April 15 deadline, even if it's a way more for 2026 than it was 2025. Just make sure you've paid in your safe harbor on the 110%. But after you fund the, let's say 401k profit sharing plan at the firm level and then you have an influx and then you've paid your taxes which will probably be in the 35, 37% range. If it's a huge number of income, then you set aside a year or 18 months or even 24 months in a high yield savings account, a money market fund and then beyond that you can invest in a brokerage account because that money should have a much longer time horizon. And, and as time goes on, Laura, you guys will, you will have a better sense of the income when there's more cases probably. And that cushion will help you smooth out your spending. But there's a lot of moving parts when it comes to having your own business and being in contingency law. But hopefully that helps.

[Clark Howard]

Okay. And this is from Steve in District of Columbia, D.C. i appreciate Wes comments on trust wills and estate planning generally. I'd like to know what he thinks about commercial trustees who should use them. Should one have a certain level of wealth before considering them?

[Wes Moss]

Hey, Steve in D.C. by the way, for our listeners, I think what Steve is asking about when he says commercial trustee, I think you really mean a corporate trustee or a trust company. And the short answer on the amount of income. So it's not so much about the amount of money, Steve, it's more about the longevity of the money is why you would need a corporate trustee. And so anybody thinking about their estate and leaving a legacy, think of it this way. First of all, most trust companies want at least a million dollar minimum. So that is usually a minimum to have a trust company. But think of it this way. If your heirs, just through a will, inherit all of your assets, let's say it's $5 million, then there's no need for someone to be the steward of that, because now it's your heirs, it's their money, and they're in charge. And they can pick their own financial advisors and CPAs and tax attorneys, et cetera. But if your trust or your wishes are that you want your $5 million to pay your children, let's say 5% a year for the rest of their lives, and then that money to still be around to pay to your grandkids, 5% a year for the rest of their life, that could be 50 years, could be 100 years. So it's really hard to have just your friend or your trusted person to be your trustee. That's too long of a job for a person. So you need a company that. That has, let's say, staying power and longevity, a trust company, a banking trust company that can now execute the wishes of whatever you wrote out in your trust. And maybe it's a certain amount of income for certain reasons, for a certain period of time, or maybe it's a really long period of time, they become the gatekeeper of your wishes. So I think the answer here is, one, it usually needs to be a million or more. Two, if your money is there for a legacy to last for someone's income for decades, that's when you really need to consider having a corporate trustee that's hired essentially in perpetuity to be the steward and the gatekeeper of your money. Now, you can assign someone else to manage. It doesn't necessarily have to be the trust company, but it can also be the trust company. They usually have investment arms and they can help manage the money as well, which you can also spell out on how you'd like it to stay invested and in your trust and your wishes as well.

[Clark Howard]

All right, that does it for us today on Ask An Advisor. Thank you so much for listening. Hope that you've subscribed wherever you listen or if you watch on YouTube, that you subscribe to our channel. And we try to bring you great content there every single day of the week. Hope you have a great rest of your day. Thank you, Wes.

[Wes Moss]

Thank you.

[Clark Howard]

We'll be back tomorrow with a new Clark episode.