03.17.23 Ask An Advisor With Wes Moss

Summary

The Clark Howard Podcast – Ask An Advisor With Wes Moss

Date: March 17, 2026
Host: Clark Howard
Advisor Guest: Wes Moss
Special Guest: Krista DiBias (brief segment)

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Episode Overview

This “Ask An Advisor” edition of The Clark Howard Podcast features Clark Howard and financial advisor Wes Moss, focusing on the realities of volatile financial markets amid historic oil supply disruptions, evolving investment advice, and new insights about artificial intelligence’s impact on workplace productivity and burnout. The episode addresses timely listener questions ranging from rebalancing investments in turbulent markets to family gifting strategies, the mechanics behind automatic 401k investing, and practical advice for career-changers aiming to become financial planners.

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Key Discussion Points & Insights

1. Historic Oil Supply Disruption & Its Impact

[00:51 - 09:50]

• Global Context & Market Effects:
  Wes Moss explains that the International Energy Agency has called the current oil disruption the largest in history due to Middle East conflict and the closing of the Strait of Hormuz, a critical global oil chokepoint.

  "If there's a supply disruption halfway around the world, ...it reverberates right back here to the United States." – Wes Moss (02:36)

• Price Volatility Explained:
  Oil prices are swinging wildly from $85 to $130 per barrel in a single day, causing inflation and impacting costs for all manufactured products.

• Stock Market History & Recovery Data:
  Wes uses historical precedent to explain stock market behavior following geopolitical shocks:

  “Three months after these shocks, on average markets are up a little over 2%. And six months later markets are up about 5%. And a year later…up 11.3%.” – Wes Moss (08:18)

• Key Takeaway:
  Despite periods of volatility and major shocks, markets historically recover within a few years:

  “Investors are typically successful...by participating, not by perfectly timing the world. Participation and longevity is the key.” – Wes Moss (07:43)

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2. Question & Answer Segment

[10:43 - 26:43]
Clark and Wes field practical questions from listeners.

a. Investing in Falling Markets & Rebalancing

• Listener Doug (CA): Asks about a mathematical formula for investing in falling markets.
• Wes’s Answer:
  Rather than timing markets, focus on rebalancing when market swings make your asset allocation drift. Add more to stocks when they're significantly down (e.g., 20%+), but don’t overreact to small drops:

  "When markets do get down 20%, ...it's time for you to really pay attention to adding back to the very area that is down that much." – Wes Moss (12:46)

b. Gifting Large Amounts to Children for Home Purchases

• Listener John (IL): Has substantial retirement assets and wants to gift $125k/year to each of three kids for home down payments.
• Wes’s Guidance:
  • Gifting from retirement accounts triggers income taxes; little can be done to avoid this.
  • Avoid pushing income into higher tax brackets by spreading gifts over more years if possible.
  • Strongly recommends consulting a CPA/financial advisor.

  "Your main thing to do here, John, is watch your tax bracket buckets." – Wes Moss (17:04)
  "This is a tax bracket income management situation for you...work with a CPA to make sure everything's right." – Clark Howard (18:47)

c. 401k Auto-Investing and Market Momentum

• Listener Bert (GA): Wonders if S&P growth is fueled by auto-401k payroll investing.
• Wes’s Analysis:
  • Yes, auto-investing is a tailwind, with roughly 70M Americans contributing over $500B annually to 401ks.
  • While significant, it’s not the sole reason the market grows; demographic and economic shocks still play a role.

  "It's such a massive weight...I don't see a disruption in that particular piece of the equation anytime soon." – Wes Moss (22:49)

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3. Artificial Intelligence Isn’t Reducing Our Workload – It’s Increasing Burnout

[27:02 - 34:26]

• Key Study Result:
  Wes introduces a study from ActiveTrack Productivity Lab, showing that after AI tools are introduced, workers’ hours increase.

  "AI isn't killing jobs, it's burning us out with more work, a lot more work." – Wes Moss (28:06)

  • Email time: Up 104%
  • Messaging: Up 145%
  • Business management tool usage: Up 94%
  • Weekend work: Up 46% (Saturdays), 58% (Sundays)
  • Collaboration: Up 34%, Multitasking: Up 12%

  "When AI shows up, the workday doesn't shrink, it swells, it grows, it expands." – Wes Moss (30:10)

• Why More, Not Less Work?
  AI eliminates bottlenecks, so “everything is figureoutable,” creating continuous new tasks.

  "Anything you can think about...Now, everything is figureoutable and it creates more work because there's nothing we can't do.” – Wes Moss (31:43)

• Consequence:
  The new risk for workers is burnout (“brain fry”), not joblessness—especially in small business sectors.

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4. Listener Q&A: FIRE, CFP Careers, Bonds vs. High Yield Savings

[34:27 – 44:51]

a. Dry Powder for Early Retirement (FIRE Movement)

• Listener Spencer (IL): 33 years old, $1.1M invested, asks about timing “dry powder” for FIRE-style early retirement.
• Wes’s Advice:
  Under 10 years to retirement, “dry powder” (cash or other liquid safe assets) becomes vital. But in your 30s with high flexibility, it’s not necessary yet:

  “You don’t really need dry powder today in your 30s… Where dry powder comes in is when you’re getting within three years or sooner of when you’re going to totally stop working.” – Wes Moss (36:01)

b. Maxing 401ks and True-Up Issues

• Listener Bill (NY): Asks about 401k match mechanics and if more savers are affected by timing/maxing out issues.
• Wes’s Response:
  About 14% of Americans max out 401ks—true-up policies help, but missing out on market growth is possible.
  • For career-changers interested in becoming CFPs:

    “There are very few jobs that are as well suited and welcoming as a mid-career change to being a CFP...It’s totally attainable.” – Wes Moss (41:25)

c. High Yield Savings vs. Bond ETFs for Diversification

• Listener Nick (MI): Is there a benefit to a bond ETF in a brokerage vs. HYSA at similar rates?
• Wes’s Perspective:
  • Bonds lock in rates for longer; if Fed lowers rates, HYSA rates will fall but bond interest stays fixed.
  • Bonds also offer diversification and potential price appreciation when rates drop.

  “It’s about locking in an interest rate...and the zig versus the zag of equity markets with fixed income.” – Wes Moss (44:08)

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Notable Quotes & Memorable Moments

• Wes Moss on Market Panic and Recovery:
  "Participation is the key and longevity is the key." – (07:43)

• Wes Moss on Automated Savings:
  "You just cannot dispute that automatic savings is a wonderful thing relative to trying to remind yourself to always be saving." – (19:52)

• On Artificial Intelligence:
  "AI isn't killing jobs, it's burning us out with more work, a lot more work." – Wes Moss (28:06) "When AI shows up, the workday doesn't shrink, it swells, it grows, it expands." – Wes Moss (30:10)

• On Worker Burnout:
  "The real risk isn’t no work. The real risk is being able to balance almost too much work." – Wes Moss (33:09)

• On FIRE and Dry Powder:
  “You don’t really need dry powder today in your 30s… Where dry powder comes in is when you’re getting within three years or sooner of when you’re going to totally stop working.” – Wes Moss (36:01)

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Timestamps for Key Segments

• [00:51] Wes Moss outlines oil supply crisis and initial market response
• [08:18] Historical returns after geopolitical shocks
• [11:14] Rebalancing and mathematical investing during downturns
• [14:48] Gifting large sums to children—retirement asset management and taxes
• [19:19] 401k contributions and market momentum
• [27:02] AI’s true effect on workplace workload and burnout
• [34:49] Early retirement strategies and the role of cash reserves
• [40:21] Maxing 401k contributions, career switch to CFP
• [43:44] Bonds vs. High Yield Savings Account

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Summary of Practical Takeaways

• Stay the course during market volatility. Don’t panic-sell during shocks; markets recover over time.
• Rebalance your portfolio, don’t try to time the market. Act when your allocation drifts significantly.
• Gifting from retirement assets triggers taxes—strategize to avoid bracket jumps. Consult a CPA/financial advisor.
• Automated saving is one of the strongest drivers of investment discipline and wealth accumulation.
• AI may automate tasks, but so far, it’s making us more busy, not less—be wary of overwork.
• Early retirees (FIRE): Maintain your growth orientation when young; add more “dry powder” as you near your retirement date.

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Final Thoughts

Clark and Wes emphasize the benefits of steady, automated investing, prudent financial planning especially amid volatile times, and the importance of adapting to new workplace realities brought on by technology. The episode offers both immediate practical advice and broader context for financial decision-making—with the familiar Clark Howard encouragement to “save more, spend less, and avoid ripoffs.”

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Transcript

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[Clark Howard]

Welcome to Ask An Advisor where we here on Team Clark help you manage your money, your investments. We talk about how you can save more, spend less. And Clark handles the not getting ripped off part. We usually don't get into that on Ask an Advisor, right? Wes Moss we don't.

[Wes Moss]

But we do deal with markets constantly and there are periods of time where you feel a little bit like that. And we're going through one of those times right now with the International Energy Agency just said that we are in the middle of the largest oil disruption and supply disruption in the history of global oil.

[Clark Howard]

So much happening in the World War, lots of stuff to get to, but how's that going to affect us? And so I think a lot of people are very worried right now. So really I'm looking forward to getting your take on that. And then later on after, of course, you're going to take questions from all of our listeners. We are going to talk about AI and not in the way that it's normally talked about because all the talk is about AI and job loss, of course, innovation, but job loss on most financial shows. But you have a different angle and

[Wes Moss]

has been wreaking havoc on different sectors in the stock market. Software is an example, down 20, 30, 40% because the worry that AI is just going to take and replace what these software companies are doing. So there's been a lot of disruption with artificial intelligence and how it's changing the job market. And there are new studies, brand new, that I've just found because I think it's so new that it's kind of the first time studies are coming out about how much we're using AI and what it's actually now doing in the labor force. And it's almost the opposite of what you might think. It's almost crushing us from a workload which is totally the opposite of what it was supposed to be doing, for sure.

[Clark Howard]

All right. But before that we're gonna talk about what's happening in law.

[Wes Moss]

Let's talk about the geopolitical events of the day. We're in kind of week two, approximately, we have seen the IEA just came out recently and said that we're in the middle of the largest oil disruption, supply disruption that they've ever seen. And that's a global issue. Remember that even though we have plenty of oil in the United States, we produce more oil here than we even consume. So we're actually a net exporter. The price of oil is determined globally. If there's a supply disruption halfway around the world, which is exactly what's happening, it reverberates right back here to the United States. And it's really difficult. Even with the release of the Strategic Petroleum Reserves, which we've heard about also, there's only so much that can do to help curtail prices of oil. If we go back to, let's say, the end of last year, Christa, oil prices, and this is by the barrel, were in the mid-50s. And that translated to prices at the pump in the $2 range, 282.90. So we had some real relief at when we're filling up our cars. I know that Clark doesn't do that because he drives a Tesla, but for those who still use petrol or gasoline, it was relatively inexpensive last year. Now, the minute you see oil prices go up, the minute you see gas prices go up, and for every $10 per barrel, it's about 25 cents per gallon at the pump. And we have seen oil now go in the $100 range. So in any given day, depending on. When you're listening to this, the swings in oil have been so dramatic. Again, somewhat unprecedented to see prices move this much where we can see $120 per barrel oil in the morning and then $85 barrel oil in the afternoon. So depending on the hour you're listening, we could be at $130 in oil. We could be at $85. It really just depends on the news headline of the minute and the hour. What I do know is that the situation that we're in with the US at war in Iran, engulfing the entire Middle east, which impacts the critical oil choke point in the world, which is the Strait of Hormuz, where 20 to 25% of the entire world's oil is moved through. When that is shut, that means that a quarter of the world's oil is not moving. Yeah, that's a very, very big deal. What also doesn't get talked a Lot about are all these other, let's call them chemicals and fertilizers and other distillates that come through that strait. So it's not just oil, it's a supply chain that involves even more than that. So it's very disruptive. And that means that even if there's, let's say, movement and healing and traffic starting back up again, it's going to take a while for the oil market to kind of find its footing. So we're going to be in these reverberations of higher oil prices for potentially quite some time, even if there is a solution. So the question is, what does that do to the stock market? The minute you see oil go up, you typically see the stock market go down. It may be good for oil companies on that given day, you'll see red on the screen with almost every sector. But you might see oil companies up a little bit when prices are up. But for the vast majority, because oil is such a big input in our lives, 95% of products that are manufactured have some level of oil in them or derivative in them. So it's inflationary as well. We've been looking at. Inflation is an issue that the Fed has continued to try to deal with. So an oil shock impacts the economy and it impacts the stock market and impacts your 401. And the question is, what happens when we go through these shocks? The Federal Reserve keeps a list of geopolitical events. They are typically war related. Almost all of these are war oriented or standoff oriented. And we go back to history to say, how does the market do what happens to stocks when we get a war like or geopolitical shock? And we can go back to. Because the Dow Jones was around in the early 1900s, we can go back and look at the Dow Jones and how stocks did all the way back to the first geopolitical event, which is the Russia Japan war, which was well before World War I and then World War I and then World War One escalation, and then Germany invades the Eastern Bloc and then World War II and Pearl harbor, et cetera. And we go all through. There's about 25, let's call it two dozen geopolitical events that we can measure. Falkland's War, Iraq invades Kuwait, and then the Gulf War and then the Bosnian War, et cetera. The day that this happens, it's usually not good for stocks, as you can imagine. And we just saw that, the beginning of the disruption here, we saw the market down a couple percentage points. And we've had Some thousand point swing days in the Dow as well. But the real key here is to as we all know, investors are typically successful. Investors are participators as opposed to those who are perfectly timing the world right. And participation is the key and longevity is the key. And we want to go out and look okay, even though we have this shock typically the day of or the week of even what happens to markets three months later and six months and 12 months and even 36 months later. And the news there is pretty good. Even in situations like the Gulf War as an example, there's really kind of two different this is late 1990 and early 1991, where first it was Iraq invades Kuwait and then it was really the Gulf War. We saw oil prices double, then oil then was $20 a barrel doubled to over $40 a barrel. Stock market down 18%. So really big correction in stocks. But what happens on average over time, markets recover pretty significantly and they get back to more like their normal long term averages. Three months after these shocks, on average markets are up a little over 2%. And six months later markets are up about 5%. And a year later after these shocks, on average markets are up 11.3%. Which sounds a lot like the normal long term averages during those periods of time anyway, even without the shocks. So the shocks are scary and they do impact the world. In many cases it's because oil prices are going go up, makes everything more expensive. We're worried about inflation. We don't know when things are going to end and when the reverberations will stop. But ultimately history has shown us over and over and over again, really once every three to five years we have one of these shocks, the market has found its footing and recovered. And I think it's always important during periods of time of this extra volatility that we remember that. So that's the takeaway here today. Even though we're in the middle of a shock that may reverberate for a while, we need to be patient and know that markets eventually find their footing.

[Clark Howard]

I'm guessing too that the volatility is even worse now because we have, first of all, it's so much easier to buy and sell your own stocks than it used to be. And then you've got social media and people feeding into the frenzy when something happens in the world. So I'm guessing it's just easier access for people to try to time the market and try to make these moves when slow and steady is usually best, wouldn't you say?

[Wes Moss]

It depends on how you look at it, to some extent, we get bad news quicker and there's more reaction, and then we get good news quicker. Too true. And that's why the whip solness is perhaps even greater today than it was. The levels we end up hitting both on the low side and the high side tend to be even quicker recoveries. At least that felt that way over the last five to 10 years.

[Clark Howard]

The whipsaw ness. I like that. All right, you ready for some questions?

[Wes Moss]

Yes, let's do it.

[Clark Howard]

This one came in from Doug in California. You've recommended to keep some powder dry for opportunities when the stock market is crashing. This is not for everyone, but if an investor has followed all of your other recommendations, this may be a good financial step. Is there a mathematical formula for investing in a falling stock market? As an example, if the stock market falls 20% from its high, and then I invest, say 25% of the funds allocated for this investment, 30% down, say 40% of the investment, what do you think, Doug?

[Wes Moss]

It is really. I think this question is about rebalancing. Because if you think about this, Doug, anytime there is a big shock in your portfolio, let's say the stock side goes down, or maybe it's the international piece or the US piece is down disproportionately to the rest, or how you originally set things up, or how your kind of target goal of where you feel comfortable. Well, if there is a big movement in equities and you look at your portfolio and your allocation is way off, then rebalancing in itself, it's not necessarily saying because the market's down a certain amount, it's saying that now my allocation is off, that then it is totally normal. In fact, rebalancing is a way to automatically have yourself do this. Then when your piece of the pie, which was supposed to be 70% in stocks, let's say, as an example, and now it's 63%, is it prudent to add and go back to 70? The answer is yes. In fact, that's exactly what rebalancing is. I don't believe that in a garden variety down 5 or even 10%. And these are moves that happen quickly and all the time. I think you still stick to your allocation, but be open to rebalancing. That is really the kind of what's behind rebalancing over time. When markets do get down 20%, though, it is time for you to really pay attention to adding back to the very area that is down that much. And we're Talking about something down that much, we're almost always talking about stock. So that's when I would say you can get even more interested in being more proactive around adding to the area that's down. Buying low in this case. But I wouldn't be rebalancing and I don't have a rule of thumb is just because the market's down 3% or 6 or 8% that you automatically, it's time to go, go back into stocks. I think you keep your long term allocation that you're comfortable with. If it gets way off, you rebalance back to it.

[Clark Howard]

All right. This is from John in Illinois. Wes, I've been fortunate. I have a Fidelity account that has amassed $4.6 million. Of that, 4.2 million is in a defined benefit plan. And of that which $425,000 is in a 401k and 25,000 of that is a Roth 401k. I also have another $30,000 in an HSA. I'm very fortunate that I will be one of the few that still have a pension as well that will provide us $9,500 a month.

[Wes Moss]

John is doing great in Illinois.

[Clark Howard]

People are jealous. And I am present planning to take a 75% survivorship when I retire in about three years. I also have $50,000 in a high yield savings account and I'm 62. I know I have enough to retire today or when required in three years. But we've decided to pay out approximately $125,000 a year to my three children in order for them to purchase their houses over the next three years. My son is sitting here, my 20 year old son. Don't get any ideas. We still have 300.

[Wes Moss]

I like this idea, Mom.

[Clark Howard]

Yeah. We still have $350,000 on our mortgage which I plan to pay off once I'm not in the 35% tax bracket. And we have a $4,000 monthly house payment. It seems the only way to provide my $125,000 gift to my kids is through a withdrawal from retirement. And that comes with about a 30% FICA tax. Is there a good way to avoid this or another vehicle to provide this? We definitely want to gift the money to our children now versus later. You can't take money to the grave.

[Wes Moss]

Can't take it to the grave, John. And as you can see here, I'm taking notes and I'm doing some math for you. It sounds to me, John, you're in a fortunate position to be able to help because it is. So think about the problem that John and his family are facing is it's really hard to buy a house.

[Clark Howard]

Yes. It's so hard.

[Wes Moss]

You be 30 and making a great

[Clark Howard]

living and still first time home buyers.

[Wes Moss]

Still really hard to buy a house. Right. Rates are higher. Home prices are essentially as high as they've ever been still. So it's really hard to be able to come up with a down payment of 10% or 20%. And I get it. And you're in a position to help.

[Clark Howard]

Very generous.

[Wes Moss]

If you'd like to do $125,000 a year and do it for three years for three kids. The way I'm looking at this is it's basically about $42,000 a year to each child for three years. And as you listed out your assets, I was paying attention to the location of those assets. We think about how much we talk about tax planning and where assets. Are they in retirement accounts? Are they in Roth accounts? Are they after tax accounts? And you've got all this money, 4.6 million. And from what I am hearing, everything except 50 grand. John is in a retirement account. Yeah, 25 in a Roth. That's not going to help much here. 50k in an HSA or I'm sorry, a high yield savings account. I don't think you ever want to. You could potentially use the HSA money, but I'd say no, don't do that either. So it really has to come from your retirement accounts. The defined benefit plan is treated as a retirement plan. So when you pull money out, it's going to be taxed as ordinary income. He said FICA there. He probably just means federal taxes, right?

[Clark Howard]

I think so.

[Wes Moss]

Not fica, which would be your, your wage taxes, your Social Security taxes on your wages. So the good news is this, this is how I see this happening. There's very little way to get around. I'm even thinking maybe you could give them a family loan and let them pay it back.

[Clark Howard]

You could forgive each year too, and give.

[Wes Moss]

Yeah, but they still have to get the money, right?

[Clark Howard]

They have to get to it first to do the loans.

[Wes Moss]

So he's still got to get the state loans.

[Clark Howard]

But they don't want to do that.

[Wes Moss]

I think they're trying to avoid that. So, John, you still, even if you did a family loan situation, they've got to have the capital and it's got to come from somewhere and it's got to come from retirement count. So either way you get taxed. So the good news here is that you're going to be fine in retirement no matter what. You've got this 9,500 bucks a month plus another 4.6 million to produce income for you. So you're totally in great shape. I think the issue here is that probably one of the best things you can do is think about spreading this out one over time. Maybe it's not just in the next three years. Maybe you do it over five. And I think your main thing to do here, John, is watch your tax bracket buckets. And if you find yourself with $100,000 worth of room before you get to the next bucket, then it's probably an okay time to be gifting because you're still at the same tax rate. And it's a little bit like thinking about a Roth conversion. But the minute you go over into the next bracket and think about there's the 24 bracket that jumps all the way to the 32, then you want to avoid having income which gets created by pulling money out of the retirement accounts. You want to be careful that you don't go from 24 all the way to 32 and even higher. So this is a tax bracket income management situation for you. Sounds like you can totally do it. But I would just be careful about going too high in those buckets. And the only solution there would be to spread it out maybe a little longer than you're thinking and maybe work

[Clark Howard]

with a CPA to make sure everything's right.

[Wes Moss]

Or a financial advisor. I think this is both. I would say you should be working with a CPA or your CPA on this in coordination with a financial advisor on these withdrawals because the withdrawal adds to your adjusted gross income.

[Clark Howard]

Okay. Burton, Georgia sent this one. And Wes, do you think much of the continued growth of The S&P 500 is due to automatic 401k payroll investing from employees and employers? What could disrupt this momentum?

[Wes Moss]

I'd say it's the fault of one of my author good buddies named David Bachelor.

[Clark Howard]

Oh, yeah.

[Wes Moss]

He's actually coming out with a new version, the 2026 version of a book called the Automatic Millionaire. And that Automatic Millionaire was so good at making sure people said, look, just put this thing on auto, auto save. And the easiest place to do that is in a 401k.

[Clark Howard]

So you're going to hold him solely responsible. That's good. I think you'd appreciate that a lot. It's a good thing.

[Wes Moss]

I think he contributed to that.

[Clark Howard]

I do too. I think Clark did too.

[Wes Moss]

And I think Clark did too. I think we, we all the financial community, because it just, it's one of the few you just cannot dispute that automatic savings is a wonderful thing relative to trying to remind yourself to always

[Clark Howard]

be saving, do it first. And you never see the money that's been important. That's worked for me for sure.

[Wes Moss]

So, bert, there are 70 million people in America that are participating in 401k plans. 70 million people putting money in most of that automatic. The way I've looked at the math on this, because I've thought about the same question too, and here are the rough numbers. About A half a trillion 500 billion of 401k contributions are going in every year. Okay. And by the way, there's about 10 trillion in 401k assets. So that's what, 5% every year now that's just 401k assets. There's another 20, $30 trillion of liquid assets in the United States, which is hard to even get an accurate picture on. But we're contributing as Americans about a half, 500 billion in 401k and another 1.5 trillion in other investing. Let's say outside of retirement accounts, we're putting in about $2 trillion. That's how much we're saving. Thank you, Clark. Thank you, David Bach. And we're.

[Clark Howard]

Thank you, Wes.

[Wes Moss]

We're pulling out about 1 trillion. So the way I see that is that we still have this tailwind of more money going in that's than coming out. And it's a supply demand market. So more people buying and less people selling would tend to help to push the market higher over time. Over time. And that is such a massive weight. It's such a big pool of people, 70 million plus all these other people, another 20, 30, 40 million people that are saving in other capacities. I think that it's really hard to disrupt. But it also doesn't mean that we're not gonna have oil shocks like we're in the middle of today. Other economic shocks, higher interest rates. Demographics are slowly changing and people are slowly in mass getting a little older. So there's an argument that more money is going to be pulled out because less people are saving. That argument's been being made for 10 or 15 years now, and I haven't seen that really happen all that much either. So there's two ways to look at this. The net inflow to the US Stock market. And by the way, not everybody's putting every dollar into stocks either. That's the other thought here. But the net inflow in itself is not responsible for the market going up. It is perhaps a small piece of the equation and the tailwind that has seen a rising market over time and it's such a massive footprint that I don't see a disruption in that particular piece of the equation anytime soon.

[Clark Howard]

I hope not, because I love that people are automatically saving like that. That is what you always talk about.

[Wes Moss]

And it's on autosave. I mean, it takes a lot of effort. Think about how much effort it takes to stop doing that.

[Clark Howard]

Oh yeah.

[Wes Moss]

How many people right now can just go log into your 401k account? I know that I'd have to probably go remember my password and go log in. And because I actually just did this the other day, I remember then having to go and figure out the contribution and then trying to figure out which area that I can go and change the contribution or see the contribution. It takes a little bit of time. Anytime there's some friction in what we do, it tends to not get done. And the good news is there's a lot of inertia of people saving.

[Clark Howard]

That's great. Well, coming up next, we're going to talk about AI, but a different angle than you've probably heard before. Is it making us work harder?

[Wes Moss]

We'll see.

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[Wes Moss]

Welcome back to Ask An Advisor. I'm Wes Moss along with Krista Dibias here on the Clark Howard Show, Ask An Advisor Day. And we're going to jump into. I mean, there's plenty to worry about in the world, isn't there?

[Clark Howard]

Yes, I would say so.

[Wes Moss]

Oil prices going bananas has been the worry of the day, but the worry of the year has not gone away at all. In fact, it's not going away really in our lifetime. And that is about artificial intelligence and what that does to the workforce, what it does to the economy, what ultimately how this impacts you as an Investor and your 401k as how I think about it. But also because I'm still in the workforce. I've got young kids. I want them to be able to have a job when they grow up. I have a company. I'm in the middle of work life. Like a lot of you listening and I think about, especially over the last couple years, what is this going to do to this technological revolution? What Is it going to do to our jobs and then our kids jobs? So I think that you have to have your head in the sand if you're not thinking about this.

[Clark Howard]

My son, I mentioned earlier, my 20 year old son's in here, he was a software engineering major and he switched to business because of all this.

[Wes Moss]

So here's my take on what's happening. And this is a brand new study that just came out and it was published, it was talked about in the Wall Street Journal, but it was also, it's been in a lot of other. It's. We went and actually looked at the actual study from its Active Track Productivity lab is the company that did this new study. First of all, here's the short way I would like to set this up. AI isn't killing jobs, it's burning us out with more work, a lot more work. That's what's really happening. You've seen CEOs say 50% of all white collar jobs will be gone in five years. And we're a couple years into AI now. And I was looking around at a meeting just this past week and I was saying to our team, wait a minute, I think we need to hire some people. We have to hire more people because there's so much more to do. If you think about this is the one way I look at the world that we live in and think about your job right now and think about you get to the end of the day, you come home, do you feel like there was still more to do?

[Clark Howard]

Oh yeah.

[Wes Moss]

Oh yeah is the answer. And I think that we are going to, in any given day or let's say tomorrow, I'm going to look back and I'm going to say, oh, there was more work to be done. And that one phrase is I think the answer to what is going to happen with the technological revolution. And this study to me is very, very strong evidence that that's going to be the case. I think at the end of the year we're going to look back and say, wow, I didn't realize there was so much to be done and there was so much more we could do.

[Clark Howard]

Is this mainly with white collar jobs?

[Wes Moss]

Would you say it's with every job in every company in every industry. So here's what happened. ActiveTrack looked at, it was a giant sample set. They analyzed 443 million hours digital activity from 164,000 workers, over 1100 employers. And there's another study from Berkeley, the Haas study, it's in the Harvard Business Review that shows When AI shows up, the workday doesn't shrink. It swells, it grows, it expands. So here are some of these more work stats. So they looked at companies 180 days prior to them implementing AI tools for their employees, and then 180 days after they implemented AI tools after the AI adoption, what happened? Time spent in email jumped 104%. Messaging time back and forth with your team, up 145%. The use of business management tools, up 94%. Krista, weekend work. This is weekend hours, okay? On Saturdays, up 46%. Up Sundays, 58%.

[Clark Howard]

We don't like that.

[Wes Moss]

I thought we were supposed to be doing less, right? Isn't I going to just do our job for us and we can go home at noon? The answer is it's the opposite of that.

[Clark Howard]

I'm confused by that.

[Wes Moss]

It's because there's always more work that you never thought you could do to be done.

[Clark Howard]

Instead of spending your time taking notes in a meeting, AI is taking them for you and you can then work on that.

[Wes Moss]

You immediately go work on those notes as opposed to assimilate those notes.

[Clark Howard]

Got it.

[Wes Moss]

Everything in the world, almost any problem that you can think of today that was not the case last year or the year before is now figureoutable. So there's anything you can think about that, oh, maybe I should do this. How many times do you think, oh, gosh, I could have done that, should have done that, would like to have done that? I don't know if I know really how to do it now. Everything is figureoutable and it creates more work because there's nothing we can't do. And companies are not ever going to say, wow, we got the same amount of work done in six months as we did last year. Everyone just go take the next six months off. No, no, no, we're gonna keep going because we're gonna double the amount that we did from the year prior. And that's the reality of the world now that we're living in. And I think these several studies really show that. Collaboration, up 34%. Multitasking, up 12%. So now the bad news, everyone, is that it is leading to burnout. It's leading to a very scientific term called brain fry, which I don't really know what that means, but it's probably the cousin to burnout, because people are maxing out what they're doing. They're working more, they're working more hours. So I think that the real risk, as we move forward in this technological new corporate and small Business world is that the real risk isn't no work. The real risk is being able to balance almost too much work. I'll leave you with one last number. Think about the technology teams. There's a couple hundred, let's call it a thousand or two thousand, really, really big companies. The vast majority of businesses in America, 38 million of them are small businesses. 28 million of those businesses are solopreneurs. Another six and a half million are one, plus one, two, three people. If you think about big, let's say technology teams being able to shrink from 1,000 people down to 500, that could be several hundred thousand jobs that go away. But going back to the conversation I was having with our team the other day, like, oh, I think we actually need to hire a couple people. So does every single other business in America and every single sector if they don't want to be left behind. So I think that we may lose 500,000 jobs due to tech efficiency and then we're going to have 5 million open jobs for all the small businesses in America. So that is my take. I've been thinking this way now for a while. This active track and the Harvard Business Review study give me more evidence that that's really what's happening.

[Clark Howard]

All right, you ready for some questions?

[Wes Moss]

Yes.

[Clark Howard]

Spencer in Illinois wants to retire early. He says, hi, Wes. I know you're a big proponent of having dry powder as you approach retirement. I'm curious to hear your commentary on dry powder and risk in an aggressive early retirement Strategy. I'm currently 33 with just shy of $1.1 million in total invested assets.

[Wes Moss]

Go, Spencer.

[Clark Howard]

I know a mix of tax, deferred, post tax and brokerage. My dry powder is essentially zero. My target retirement spending is around $75,000 a year. I'm looking for around $2 million in total assets. I project I will hit that number by 40 with my savings rate of $81,000 a year and a 100% stock portfolio. How do you balance diversifying the portfolio in dry powder when growth is needed? And I will add, I'm completely flexible in my retire early date and earning additional dollars part time. I realize my investing age is young, but my total asset number is approaching.

[Wes Moss]

Spencer, I think you're going to like the retire sooner method because that's, that's coming out in a couple months because you are. Listen, it's not that I don't like the fire movement. I think it's a great aspirational. It's a good idea. But retire sooner method is Kind of what you're looking to do right now, which is a realistic version of fire. It's a realistic version of fire and you need to have pretty significant assets to be able to do it. And the key of what you just said there in your email, Spencer, is that you're super flexible around your date.

[Clark Howard]

Yes.

[Wes Moss]

That's a very smart statement by you, Spencer. You said, I'm a big proponent of dry powder. I'm a bigger proponent of retire sooner. So I know that there's some mechanics behind dry powder and we get a lot of questions about it. But I'm a proponent of retire sooner and we're going to be talking a lot about the retire sooner method throughout this year. But you're in that jet stream of retire sooner. You do not need dry powder if you're 10 years from retirement. If you're 20 years out, Spencer, you don't need any of the dry powder. Where dry powder comes in is when you're getting within three years or sooner of when you're going to totally stop working. Have to rely on your actual investments. Because remember, the 4% plus rule of thumb is predicated on a balanced portfolio. If you go back over the course of history, 100% stock portfolio that you are withdrawing from has a lower probability of lasting than than a balanced portfolio taking out higher amounts. So there's some quantitative piece to this. That balance helps you sustain your portfolio and your withdrawal rate. How do you max out what you're pulling out from the assets without running out? And even though stocks been the best asset class over time, from rate of returns perspective, there's some really big drawdowns and drops that can really mess up your plan if you are relying on the portfolio. So you don't really need dry powder Today in your 30s, if you choose your retirement date and it's in your mid-40s, you're going to want some sort of dry powder then. But Spencer, I don't think you need it today.

[Clark Howard]

Okay. Bill in New York sent this one in. Hey, Wes, first things first. The Snapdragon apples are good, but have you tried Cosmic Crisp apples yet, Bill? They have more flavor or more crisp and in the clarkiest of ways are about half the price in my area. I'm finding them at our favorite grocery store, Aldi.

[Wes Moss]

Okay. All right, Bill, should we just tackle that first? Bill, Where I live, they're pretty much the same. They're about two bucks a pound. The Snapdragon and the Cosmic Crisp, I bet you.

[Clark Howard]

Now, when's the last time you were in an Aldi.

[Wes Moss]

Wes it's been a couple months, but I was in an Aldi in Maryland. I've been in Aldi's many times. The Snapdragon I'd love to know what Clark would choose. If I'm a betting man, he would totally X out the Cosmic Crisp.

[Clark Howard]

I guarantee that Clark would choose in the apple that would taste best to him is the one that was cheapest. Probably it would influence his olfactory senses.

[Wes Moss]

Bill these are both approximately $2 a pound. My experience is that Cosmic Crisp is actually a little more, even though it's supposedly a tiny bit less. But the Cosmic Crisp is like a vanity apple. It's a marketing apple. It's like a Disney character apple. It's not a real apple. It was fabricated in a lab as far as I'm concerned, and probably the Snapdragon was too. But there's something grittier about the Snapdragon and that's my choice. Each Apple II his own my friend. Let's keep going.

[Clark Howard]

You recently mentioned that a ridiculously low percentage of the population maxes out their 401k for me personally, my current company has this true up plan for the company match in case you max out your 401k early in the year. Unfortunately, this process takes about six months to get to the original match invested, So I ended 2025 with contributions of just over 23,000. I have friends who would have to forfeit their company match altogether if maxing out early, so they're doing something similar. I'm curious if the data would change if we were looking up the percentage of people who contributed 22,000 plus third. I'm a 40 year old who has become very interested in becoming a cfp. I've been in sales since college, various industries, none of them the financial space, but over the last few years became a little obsessed with personal finance. I'm curious if you have any advice for an old career changer like myself to get started on the right track. I'm not interested in selling life insurance or annuities and I'd be able to take a pay cut, but less than 90k per year would be difficult due to the cost of living in my area. If you can't already tell, I love the show. Keep up the great work.

[Wes Moss]

Bill is a cool dude and I hope you're going to be listening to the answer here. Nobody's brought this up in the last year and a half I've been doing this and it's a very helpful question because you're running into A situation and it's something like 14%. It's a little less than 15% of Americans max out their 401k. And the way most companies match is that they match you every single month. So the match only comes when you put money in and then you get the match. But if you are a big earner and you have a really high percentage savings rate, you may have maxed out your 401k plan in six months. Okay. Then you've only gotten matched those six months. The other six months you don't get it. Now in your company Bill, you get what's called a true up because some companies will say, well, if you max out early and you don't get your true match, then we'll true you up. But it takes another six months usually to do that. So you've missed out on market growth for like a whole year.

[Clark Howard]

Right.

[Wes Moss]

So the answer to that is if you're true up, at least you're getting the free money match. But in some cases it may be better to just do this systematically and spread out your 401k max contribution depending on your age, so that it approximately fills you up by the last month of the year. How many more people would be maxing out math because they get hit in these true up situations? I don't know. Probably not a lot more. If 14% of Americans max out their 401k and they count people that get to 23, 5, 79 because they just missed out the backs, maybe another percent or two. It's really, it's a lot of money for people to save and most people are not able to do that. That's why only 14 or 15% of people do. So I don't think the number changes much. Bill, last question is a simple one. Let's say you're 40 and you want to be a CFP. There are very few careers and jobs that are as well suited and welcoming as a mid career change to being a cfp. It's a really good industry that you could start at 50 if you wanted. So at 40, not going to say you're a spring chicken, but it's totally attainable because you could have a 20, 25 year career as a CFP, which is super long. You're not too late to be thinking about making a career shift at all. And if you get a CFP, you're going to be able to earn that 90 minimum, I think pretty easily, even as like a brand new person at a firm.

[Clark Howard]

Wonderful. Okay. Nick in Michigan says, I have a 401k Roth IRA, a brokerage account and a High Yield Savings account for my personal investments in my brokerage account. Why would I choose to diversify with a bond etf? I currently hold BND as a percentage and not just put it into my High Yield Savings account. The return rate on BND doesn't seem swell and my High Yield Savings account has a guaranteed return rate of around 3.5%. I understand the tax implications of now versus later, but is that the only reason to avoid present day taxes? The security of a High Yield Savings Account for the safe portion of my investment seems smarter. Put simply, if I want an 8020 brokerage, can my High Yield Savings account count toward that 20 that would normally be in a bond ETF?

[Wes Moss]

Nick in Michigan it's very much about locking in a an interest rate. Nick, first of all, on the surface what you're saying totally makes sense and it's not the worst thing in the world. If you're not doing bonds. I get, I get it. But imagine this. Bonds are paying you 4% and your high yield savings account's paying you 4% and you say okay, why not just do the HSA? Well, let's say that next year the Fed has lowered rates and now HSA is paying 2%. Now you're getting 2%, your bonds are still getting 4. It's about locking in an interest rate. Is reason number one why I still like diversifying with bonds. Slash fixed income because you're locking in longer periods of time with rates, number one. Number two, the diversification that comes. Remember, if rates go down, not only are you getting a locked in rate, but you're also usually getting some appreciation. The seesaw effect of rates going down, prices going up. So there's some the zig versus the zag of equity markets with fixed income to me is another variable why I like using bonds and not just high Yield Savings accounts.

[Clark Howard]

Okay, well that's going to do it for us today on the Clark Howard Show. Ask an Advisor again if you have a question, go to clark.com ask and let us know if it's for Wes or for Clark. Covered a lot today Wes.

[Wes Moss]

Fun, fun show today.

[Clark Howard]

A lot of great stuff. Thank you.

[Wes Moss]

Keep your questions coming.

[Clark Howard]

Hope you will subscribe wherever you listen or if you watch our YouTube channel, please subscribe there. We have a lot of great, great content on there. In addition to Ask an Advisor and Clark's podcast, Clark will be back with us tomorrow and hope the rest of your day is great.