The Clark Howard Podcast

Episode: Ask An Advisor With Wes Moss
Release Date: April 15, 2025

Introduction

In this episode of The Clark Howard Podcast, host Clark Howard presents a special segment called "Ask An Advisor" featuring financial expert Wes Moss. Together with team member Krista Dibias, they delve into pressing financial topics, offering insights and answering listener questions to empower individuals in managing their personal finances effectively.

Market Volatility and Tariffs

Timestamp: [01:00]

Wes Moss opens the discussion by addressing the recent turbulence in the markets, primarily driven by uncertainty surrounding international tariffs. He explains that tariffs act as taxes on imported goods, influencing both producers overseas and consumers domestically.

Wes Moss:
"Tariffs are basically taxes on goods coming from other countries... Does the producer on overseas eat it or all of it or part of it or do we eat it as consumers?"
[03:21]

Moss highlights the unpredictable nature of tariffs, especially with recent pauses that indicate ongoing global trade negotiations. This uncertainty has led to significant market volatility, with dramatic swings such as the Dow Jones Industrial Average experiencing one of its best days since World War II juxtaposed against days of sharp declines.

Krista Dibias:
"One thing that's really low on the list or high on the misery list is playing games on your phone."
[29:14]

Investment Balance and the 4% Rule

Timestamp: [07:20]

Emphasizing the importance of a balanced investment portfolio, Moss advises against overexposure to equities despite their current high performance. He warns against the temptation to increase stock holdings during market highs, which can lead to significant losses during downturns.

Wes Moss:
"If you can't handle that, it's almost better psychologically... So uncertainty is part of the game."
[10:22]

He introduces the concept of "dry powder"—maintaining a portion of investments in safety assets like money markets and high-quality bonds—to navigate through uncertain times without compromising long-term financial goals.

Retirement Happiness Research

Timestamp: [23:55]

Moss shares intriguing findings from the Mappiness Project and insights from data scientist Seth Stephen Davidowitz, who analyzed anonymous search data to understand what genuinely contributes to human happiness.

Wes Moss:
"People are happiest when they are in warm weather... Spending time with someone you love."
[25:35]

The research ranks activities and environments that foster deep happiness, such as intimacy, attending arts events, exercising, and gardening, while ranking chores and work-related tasks lower in terms of contributing to personal happiness.

Listener Questions and Expert Answers

1. Retirement Savings Clarification

   Timestamp: [10:22]

   Listener: Rick from North Carolina asks whether the suggested $700,000 retirement savings is per household or individual.

   Wes Moss:
   "It's for the household... The median number we have seen work is 750,000..."
   [10:52]

   Moss clarifies that the figure represents a household, acknowledging that single individuals may require slightly less but generally aligning with household-based planning.

2. Home Remodeling and Investment Strategies

   Timestamp: [12:47]

   Listener: Catherine from California inquires about financing home remodeling—whether to use a HELOC or pay cash—and the best way to invest remaining savings.

   Wes Moss:
   "If the renovation is $50,000, then I'd say probably just pay for it out of the cash... If it's more than a quarter, then I would say you don't want to rid of that much of your after-tax money..."
   [13:18]

   Moss advises paying cash for modest renovations to avoid debt, while larger projects might necessitate a HELOC to preserve liquidity.

3. Financial Advisors and Roth IRA Considerations

   Timestamp: [15:19]

   Listener: Cliff from Idaho seeks advice on when to start interviewing financial advisors and the benefits of Roth IRAs for long-term investments.

   Wes Moss:
   "If you're comfortable investing and understand your risk tolerance... then you may not need a financial advisor. However, there's never a bad time to start consulting someone..."
   [16:18]

   Moss emphasizes the value of financial advisors for personalized planning and outlines the advantages of Roth IRAs, including tax-free withdrawals, while cautioning about the five-year rule on conversions.

4. Real Estate Investment Post-Mortgage Payoff

   Timestamp: [32:57]

   Listener: Rochelle from California contemplates purchasing an additional property after paying off her mortgage, questioning its viability as an investment.

   Wes Moss:
   "The cap rate... California real estate is expensive... I would prefer if you didn't have to do a ton of debt and be leveraged heading into retirement."
   [35:51]

   Moss discusses the importance of evaluating cap rates and the risks associated with real estate investments in high-cost areas like California, advising caution against excessive debt.

5. Social Security Benefits Timing

   Timestamp: [37:37]

   Listener: Ruth from Massachusetts asks whether to claim Social Security benefits at 60 or wait until 62, especially considering potential future cuts.

   Wes Moss:
   "You should be able to wait on your own and turn it on in the future of a tier."
   [37:37]

   Moss recommends consulting directly with Social Security to understand the best timing based on individual circumstances and highlights the trade-offs between claiming early versus waiting for higher benefits.

6. Implementing the 4% Withdrawal Rule

   Timestamp: [30:33]

   Listener: Craig from Utah inquires about suitable investment vehicles to adhere to the 4% withdrawal rule for retirement.

   Wes Moss:
   "At least 50% in broadly diversified equities, up to 75% in diversified equities... the other 40% in safety assets."
   [30:35]

   Moss explains the necessity of a diversified portfolio with a significant portion in equities and the remainder in safety assets to sustain the 4% withdrawal strategy, ensuring longevity of retirement funds.

Conclusion

Wes Moss wraps up the episode by reinforcing the importance of balanced financial planning, understanding market dynamics, and aligning investment strategies with personal happiness and retirement goals. He encourages listeners to seek professional advice when necessary and to remain steadfast in their financial strategies despite market fluctuations.

Krista Dibias:
"If you can't handle that, it's almost better psychologically..."
[10:22]

Listeners are reminded to utilize available resources, such as submitting questions via www.clark.com/askclark, to receive personalized financial guidance.

This episode provides a comprehensive overview of navigating financial uncertainties, optimizing retirement savings, and understanding the factors that contribute to long-term happiness, making it an invaluable resource for anyone seeking to enhance their financial well-being.