The Clark Howard Podcast: Episode Summary – April 29, 2025

Title: Ask An Advisor With Wes Moss
Host: Clark Howard
Guest: Wes Moss, Fiduciary Financial Advisor
Release Date: April 29, 2025

Introduction

In this episode of The Clark Howard Podcast, Clark Howard hosts a special episode titled "Ask An Advisor" featuring fiduciary financial advisor Wes Moss. The discussion centers around managing fear in the stock market, understanding the VIX (Volatility Index), and addressing listener questions on various financial topics. The episode provides valuable insights for both novice and seasoned investors aiming to achieve financial stability and growth.

Main Discussion: Understanding Fear and the VIX

Krista Dibiaz: Welcomes Wes Moss and introduces the topic of fear, particularly in relation to the stock market's volatility.

Wes Moss: Delves into the concept of fear as an "uplifting version" and explains how fear manifests in market behavior through the VIX, commonly known as the "fear index."

• [01:20] Wes Moss: "The VIX is a measure of people buying safety to protect their portfolio from going down."

Moss explains that a low VIX indicates a calm market, while a high VIX reflects investor anxiety and potential market downturns. He emphasizes that historical patterns show fear eventually subsiding as underlying issues are resolved, whether through fiscal interventions or positive economic developments.

• [09:42] Krista Dibiaz: Transitions the discussion to listener questions, prompting Wes to move from theoretical discussions to practical financial advice.

Listener Questions and Answers

1. Retirement Savings Strategy

Listener: Anonymous from Maryland
Question:
A 36-year-old earning $76,000 annually with $51,000 in Roth 401(k) and $52,000 in a previous Roth account. After their husband took a lower-paying job, they are now the sole retirement saver. With a $116,000 combined income and a second child on the way, increasing contributions is challenging. They are behind the typical retirement savings benchmark and are considering a higher-paying job with a longer commute to catch up.

Wes Moss:

• [10:50] Wes Moss: "Your savings goal should be to consistently contribute what you can, even if it's challenging."

Wes advises maintaining the current savings rate of approximately 10%, including employer matches. He projects that sustained contributions over 30 years could accumulate over $1.5 million, providing a solid retirement foundation. He encourages patience and gradual increases in savings as financial circumstances improve.

2. Required Minimum Distributions (RMDs)

Listener: Kathleen from Oklahoma
Question:
At 72 years old and still employed, should she begin taking RMDs or wait until retirement at 73?

Wes Moss:

• [14:10] Wes Moss: "If you're still working and have a company 401(k), your RMDs can be delayed."

Moss explains that individuals who are still employed and participate in a company 401(k) may postpone RMDs until retirement. He also discusses strategies like consolidating retirement accounts to manage RMD requirements more effectively.

3. Funding a New Home Purchase in Retirement

Listener: Martin from South Carolina
Question:
At 80 years old, planning to move into an over-55 community involves selling their current home and purchasing a new one, resulting in a $200,000 shortfall. With substantial investments in IRAs, Roth accounts, and taxable brokerage accounts, which funds should be used to cover the shortfall considering tax implications?

Wes Moss:

• [16:25] Wes Moss: "Using the Roth funds would be tax-efficient and leave other accounts intact."

Moss recommends utilizing a portion of Roth accounts for tax-free withdrawals to cover the shortfall. He advises against tapping into traditional IRAs due to tax liabilities and suggests using taxable accounts selectively if needed.

4. Understanding ETF Issuer Benefits

Listener: Andrew from Iowa
Question:
How do ETF issuers benefit from low asset fees, and are there hidden revenue streams that make issuing ETFs profitable?

Wes Moss:

• [28:10] Wes Moss: "It's all about scale and hidden revenue streams like securities lending."

Moss explains that large ETF providers benefit from economies of scale, allowing them to earn significant revenue even with minimal fees. Additionally, practices like securities lending and creation/redemption fees contribute to their profitability.

5. Transitioning to Cash or Liquid Assets in Retirement

Listener: Laura from Georgia
Question:
At 63 and 77 years old, planning to retire due to medical reasons with $250,000 saved in traditional IRAs and 401(k)s. With a need of $20,000 annually, how much should be moved to cash or liquid assets, and where should it be kept?

Wes Moss:

• [32:34] Wes Moss: "Maintain about 40% in liquid assets for five years of spending."

Wes advises keeping approximately 40% of funds in liquid, low-risk assets like CDs or money market funds to cover five years of expenses. He emphasizes the importance of having immediate access to funds without the need to sell investments during market downturns.

6. Providing Funds to Elderly Parents Safely

Listener: Cheryl from Texas
Question:
Best method to provide elderly parents with limited access to funds for personal expenses without granting full access to their bank accounts. Additionally, how can spending be tracked?

Wes Moss:

• [36:17] Wes Moss: "Use prepaid debit cards with set limits, such as Greenlight or Trulink."

Moss recommends using prepaid debit cards that allow setting spending limits and track transactions. He suggests services like Greenlight, Trulink, Netspend, or Bluebird by Amex as effective tools to manage and monitor the funds provided to elderly parents.

Market Timing Discussion

Wes Moss:

• [22:53] Wes Moss: "Timing the market by trying to miss the worst days often leads to missing the best days."

Moss discusses the pitfalls of attempting to time the market, highlighting that missing a few of the best trading days can significantly reduce overall returns. He explains that rebound days often occur shortly after the worst days, making it nearly impossible to avoid both without sacrificing potential gains. Wes advocates for a long-term, patient investment strategy rather than trying to predict market movements.

Conclusion

In this episode, Wes Moss provides thoughtful and practical financial advice on managing retirement savings, understanding market volatility, and safeguarding assets for both himself and others. He emphasizes the importance of consistent saving, leveraging tax-advantaged accounts, and maintaining a disciplined investment approach to navigate financial challenges. The listener Q&A segment offers personalized solutions to common financial dilemmas, reinforcing the podcast's mission to empower individuals toward financial freedom.

Notable Quotes:

• Wes Moss [01:20]: "The VIX is a measure of people buying safety to protect their portfolio from going down."
• Wes Moss [10:50]: "Your savings goal should be to consistently contribute what you can, even if it's challenging."
• Wes Moss [14:10]: "If you're still working and have a company 401(k), your RMDs can be delayed."
• Wes Moss [22:53]: "Timing the market by trying to miss the worst days often leads to missing the best days."
• Wes Moss [28:10]: "It's all about scale and hidden revenue streams like securities lending."

This summary encapsulates the key discussions and advice offered in the episode, providing listeners with actionable insights on managing investments, preparing for retirement, and making informed financial decisions.