The Clark Howard Podcast: Episode 03.04.25 - "Ask An Advisor With Wes Moss - 10 Habits of the Happiest Retirees"

Release Date: March 4, 2025

In this insightful episode of The Clark Howard Podcast, host Clark Howard welcomes financial advisor Wes Moss to delve deep into the secrets behind the happiest retirees. Titled "Ask An Advisor With Wes Moss - 10 Habits of the Happiest Retirees," the episode offers a comprehensive exploration of both financial and lifestyle habits that contribute to a fulfilling retirement.

Introduction: Setting the Stage for Happy Retirement

The episode kicks off with a warm welcome from Krista Dibias, who introduces Wes Moss and sets the tone for the discussion. Wes shares his extensive research spanning over 15 years, focusing on the habits that distinguish happy retirees from their less-content counterparts.

Notable Quote:

Wes Moss [01:04]: "It really is [retirement planning]. And when I first started doing this... I wanted to get more empirical data around it and not just what I thought."

Part I: The Five Financial Habits of the Happiest Retirees

Wes Moss outlines the foundational financial habits that set the stage for a stress-free retirement.

1. Sufficient Savings

   • Key Insights:
     • Median Savings: $750,000
     • Average Savings: $1.25 million
     • These figures are adjusted for inflation, reflecting the increased cost of living since the pandemic.
     • Emphasizes that while some experts advocate for higher savings (e.g., $5 million as per Suze Orman), Wes argues that a substantial and achievable target exists below that threshold.

   Notable Quote:

   Wes Moss [02:38]: "The first step is that the happiest retirees have a minimum of $750k, average of $1.25 million."

2. Multiple Streams of Income

   • Key Insights:
     • Happy retirees often have three or more sources of income.
     • Examples include Social Security, pensions, rental properties, part-time work, or side businesses like Airbnb hosting.
     • Diversification ensures financial stability and peace of mind.

   Notable Quote:

   Wes Moss [03:03]: "The more diversification we have around the different income streams we have, the more peace of mind we have."

3. Mortgage Payoff or Near Payoff

   • Key Insights:
     • Retirees nearing the end of their mortgage significantly report higher happiness levels.
     • Eliminating major debts frees up discretionary income.
     • Strategies include accelerating mortgage payments by adding extra amounts monthly.

   Notable Quote:

   Wes Moss [04:00]: "Paying off the mortgage allows you to spend more discretionarily."

4. Rational Optimism Through Investing

   • Key Insights:
     • Happy retirees maintain a positive yet rational outlook on investments.
     • They are proactive investors, understanding that markets will fluctuate but tend to grow over time.
     • This optimism facilitates consistent investing, essential for reaching financial goals.

   Notable Quote:

   Wes Moss [04:57]: "Happy retirees have a bias towards things are going to work themselves out."

5. Smart Spending Utilizing the 4% Plus Rule

   • Key Insights:
     • Adhering to the 4% rule ensures retirees can withdraw sustainably from their portfolios.
     • This rule accounts for inflation and aims to prevent running out of funds.
     • Smart spending involves aligning withdrawal rates with historical economic data to maximize longevity of savings.

   Notable Quote:

   Wes Moss [06:28]: "The 4% plus rule... can guide us from year to year on how much we're safely able to withdraw from the portfolio."

Intermission: Listener Questions and Financial Advice

Throughout the episode, Wes and Krista address listener-submitted questions, offering tailored advice on various financial scenarios.

Sample Questions Addressed:

1. Henry from Delaware [11:38]:

   • Question: Should he roll over his TSP funds into his current employer's 401k?
   • Wes's Advice: Recommend leaving the funds in the TSP due to its low fees and diversified investment options unless seeking more investment flexibility, in which case transitioning to firms like Vanguard or Fidelity might be beneficial.

2. Lisa from Florida [13:50]:

   • Question: Considering shifting $1 million in her brokerage account to a separately managed account (SMA) for tax washing.
   • Wes's Advice: Clarifies the concept of direct indexing and tax loss harvesting, suggesting that while beneficial, the proposed fee of four basis points seems unusually low, likely misquoted.

3. Christian [17:29]:

   • Question: Managing RSUs and stock options to minimize tax impacts.
   • Wes's Advice: Suggests consulting a CPA for strategic planning around taxable events and recommends gradual portfolio adjustments to manage tax liabilities effectively.

Part II: The Five Lifestyle Habits of the Happiest Retirees

Transitioning from financial strategies, Wes delves into the lifestyle choices that enrich retirement life.

1. Core Pursuits (Hobbies on Steroids)

   • Key Insights:
     • Engaging in multiple core pursuits ensures mental and social engagement.
     • Activities range from athletics, volunteering, to learning new skills.
     • These pursuits replace the structure and purpose that work provided during earlier years.

   Notable Quote:

   Wes Moss [22:17]: "These core pursuits... become your life purpose."

2. Independent Children Living Nearby

   • Key Insights:
     • Retirees with adult children living within driving distance report higher happiness.
     • The presence of independent yet nearby children provides emotional support without dependency.

   Notable Quote:

   Wes Moss [24:27]: "If you live next to or near within driving distance... you're two to five times more likely to end up in the happy retiree camp."

3. Marital or Partnership Stability

   • Key Insights:
     • Being married or in a stable partnership significantly boosts retirement happiness.
     • A single "marriage mulligan" is acceptable, but multiple divorces can negatively impact well-being.

   Notable Quote:

   Wes Moss [25:18]: "Those who are married are four and a half more times likely to end up in the happy retiree camp."

4. Close Social Connections

   • Key Insights:
     • Maintaining around four close relationships fosters a robust support system.
     • Social networks have shrunk over the years, making each connection more valuable.
     • Regular social interaction combats loneliness and promotes mental health.

   Notable Quote:

   Wes Moss [26:15]: "Happy retirees average almost four close connections in their life."

5. Belief in and Practice of Good Deeds

   • Key Insights:
     • Volunteering and charitable activities enrich retirees' sense of purpose and community.
     • Organized social groups, whether religious or hobby-based, provide structure and fulfillment.

   Notable Quote:

   Wes Moss [28:30]: "Believe and do good. Happy retirees volunteer. They're charitably inclined."

6. Traveling with Friends or Groups (Bonus Habit)

   • Key Insights:
     • Traveling enriches retirees' lives, especially when done with companions.
     • Group travel enhances social bonds and creates lasting memories.

   Notable Quote:

   Wes Moss [29:40]: "Travel with friends or close connections is a happiness multiplier."

Conclusion: Integrating Financial and Lifestyle Strategies

Wes Moss and Krista Dibias conclude by reiterating the synergy between financial preparedness and meaningful lifestyle choices. Successfully integrating both aspects increases the likelihood of a happy and fulfilling retirement. The episode emphasizes that while financial strategies lay the foundation for security, lifestyle habits build the architecture of joy and satisfaction in retirement years.

Final Thoughts:

Wes Moss [35:31]: "Our job is to try to make it not just 5% of people that can get there, but 10 and 20 and 30% of folks that can have real financial freedom and peace of mind and a happy retirement."

Key Takeaways

• Financial preparedness is essential but attainable with realistic savings goals, diversified income streams, debt management, strategic investing, and disciplined spending.

• Lifestyle choices significantly impact retirement happiness, emphasizing the importance of hobbies, family proximity, stable relationships, social connections, and community involvement.

• Integration of both financial and lifestyle habits leads to a balanced and joyful retirement, breaking the myth that only a select few can achieve such fulfillment.

Whether you're approaching retirement or planning ahead, this episode offers actionable insights to steer you towards a happier and more secure post-work life.