The Clark Howard Podcast - Episode 04.22.25: Ask An Advisor With Wes Moss

Release Date: April 22, 2025

Introduction

In this engaging episode of The Clark Howard Podcast, host Clark Howard collaborates with Krista Dibiaz and special guest Wes Moss, a fiduciary financial advisor. The episode delves into crucial financial topics, offering listeners expert insights on navigating the economy, investment strategies, and retirement planning.

Should You Cancel Your Beach Trip Due to a Bear Market?

[01:07 - 09:42]

The episode kicks off with Krista presenting a common dilemma: "Should we cancel our beach trip this summer because of the stock market downturn?" This question highlights the anxiety many retirees and pre-retirees feel amid market volatility.

Wes Moss addresses this concern by emphasizing the importance of maintaining life plans despite economic uncertainties. He shares a real-life scenario of a couple in their late 70s contemplating canceling their decade-long family beach trips due to fears of a 50% portfolio decline. Moss reassures them:

Wes Moss [04:12]: "You do not want to cancel your beach trip. You can go on an amazing trip without spending a whole lot of money."

He explains that with a balanced and diversified portfolio, a 50% drop is unlikely unless the entire market collapses—a scenario he deems implausible. Moss advocates for staying the course and enjoying life's moments, stressing that bear markets are typically short-lived compared to bull markets.

Wes Moss [08:04]: "We're in a period of uncertainty. It's a little scary, but the world is not ending, and we’re not canceling the beach trip."

Understanding Investment Benchmarks

[19:24 - 28:06]

Krista introduces a discussion on investment benchmarks—the standards investors use to gauge portfolio performance. Wes Moss critiques the common practice of using high water marks (the peak value of a portfolio) as benchmarks.

Wes Moss [22:48]: "The most popular benchmark in investing. Well, I'm down 6%. I'm down."

Moss argues that focusing on high water marks can distort an investor’s perception, especially during volatile periods. Instead, he recommends evaluating portfolio performance over longer horizons:

Wes Moss [24:12]: "Take a look at how you've done over the past full year. Take a look at how you've done over the past five years as an investor. Take a look at the last 10 years."

This approach provides a more accurate and less emotionally charged assessment of investment health, encouraging investors to maintain a long-term perspective.

Listener Questions and Expert Advice

[09:29 - 36:40]

The heart of the episode features a series of listener-submitted questions, each thoughtfully addressed by Wes Moss.

1. Retirement Withdrawal Strategy

Listener: Bill from North Carolina
Question: Is withdrawing $2,000 monthly from his TSP while planning to retire soon a sound strategy?

Wes Moss’s Response [10:39]:
Moss affirms Bill’s approach, aligning it with the 4% withdrawal rule, which suggests that withdrawing 4% annually from a retirement portfolio has a high likelihood of sustaining funds over 35+ years. He highlights that Bill’s planned withdrawals are well within this guideline, especially considering his decreasing expenses over time.

2. Rebalancing a Taxable Brokerage Account

Listener: Todd from Florida
Question: How to rebalance a taxable account without incurring significant taxes?

Wes Moss’s Response [13:35]:
Moss advises Todd to utilize loss harvesting strategically and avoid forcing sales that trigger high capital gains taxes. He suggests balancing new contributions to steer the portfolio towards desired allocations without disrupting the tax efficiency of the account.

3. Asset Allocation for a Teacher with a Pension

Listener: Chuck from Massachusetts
Question: Should a 33-year-old teacher with a pension and maxed-out Roth IRAs adjust their aggressive stock allocation as retirement approaches?

Wes Moss’s Response [17:09]:
Moss supports Chuck’s aggressive allocation, noting that the pension serves as a significant safety net. He recommends gradually rebalancing the portfolio as retirement nears, incorporating more bonds to reduce risk.

4. Evaluating Home Equity in Retirement Planning

Listener: Wayne from New Hampshire
Question: Does home equity factor into the 4% withdrawal rule?

Wes Moss’s Response [31:18]:
Moss clarifies that home equity is not included in the 4% rule. However, he acknowledges its potential role in overall financial planning, such as downsizing to unlock equity and enhance liquidity.

5. Roth IRA Conversions for a 63-Year-Old Public Employee

Listener: Dawn from New York
Question: Is it advisable to convert a portion of a 457B to a Roth IRA at age 63?

Wes Moss’s Response [33:58]:
Moss advises caution, emphasizing the importance of timing conversions when the tax bracket is lower. He suggests evaluating whether the conversion aligns with Dawn’s overall tax strategy and financial goals, recommending professional consultation to navigate plan-specific rules.

Conclusion

Throughout the episode, Wes Moss provides practical, reassuring advice tailored to individual financial situations. His expertise reinforces the podcast’s mission to empower listeners to manage their finances wisely, even amidst economic challenges.

Notable Quotes:

• Wes Moss [08:04]: "We're in a period of uncertainty. It's a little scary, but the world is not ending, and we’re not canceling the beach trip."

• Wes Moss [24:12]: "Take a look at how you've done over the past full year. Take a look at how you've done over the past five years as an investor. Take a look at the last 10 years."

• Wes Moss [31:18]: "No, Wayne, it is not. When you can't, you can't live in retirement."

Key Takeaways

• Maintain Life Plans: Economic uncertainties shouldn't derail long-term personal goals, such as family trips, especially with a balanced investment strategy.

• Long-Term Benchmarks: Focus on evaluating investment performance over extended periods rather than short-term highs and lows to gain a clearer perspective.

• Personalized Financial Strategies: Tailored advice, considering individual circumstances like pensions and risk tolerance, is crucial for effective financial planning.

For more personalized financial advice, visit Clark.com and submit your questions to join the conversation.