05.28.25 Best Auto Insurance / Economic Uncertainty: Preparation & Family Communication

Summary

The Clark Howard Podcast: May 28, 2025 Episode Summary

Title: Best Auto Insurance / Economic Uncertainty: Preparation & Family Communication
Host: Clark Howard
Release Date: May 28, 2025

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Introduction and Episode Overview

In this engaging episode of The Clark Howard Podcast, host Clark Howard delves into two primary topics impacting listeners' financial well-being: the rising costs of auto insurance and navigating economic uncertainty with effective family communication. Clark combines expert insights with real-life listener questions, providing actionable advice to help listeners save more, spend less, and make informed financial decisions.

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Best Auto Insurance: Navigating Rising Premiums

Clark opens the discussion by addressing the significant increase in auto insurance premiums over recent years. He breaks down the contributing factors, including:

• Inflation of Used Car Prices: The surge in used car prices directly impacts repair costs.
• Parts Shortages and Mechanic Shortages: Limited availability of parts and skilled mechanics has driven up repair expenses.
• Tariffs on Vehicles: Increased tariffs have further elevated the cost of vehicle repairs.
• Insurance Company Finances: Several major insurers have faced substantial losses, prompting them to raise premiums to maintain solvency.

Notable Quote:

Clark Howard [05:00]: "Not a single big brand name makes the list. They're all smaller, boutique insurers that focus on service rather than flashy marketing."

Annual Report Card on Insurers

Clark introduces a fascinating annual report card from CrashNetwork.com, where body shops grade auto insurers based on their cooperation and service quality. The report highlights that most well-known insurers receive mediocre grades, while smaller, service-focused companies excel.

Key Highlights:

• Top-Rated Insurer: North Carolina Farm Bureau received an A, praised for its cooperative approach with body shops.
• Surprising Results: Amica Mutual, a recognizable name, was ranked 13th with a B+, revealing that big brands often fall short in service quality.
• Recommendation: Clark advises listeners to explore smaller insurers outside the usual big names to find better deals and service.

Notable Quote:

Clark Howard [05:50]: "What do people do when they're shopping? Most people stick with big insurers, but that's a big mistake for your wallet."

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Listener Questions and Expert Advice

Clark and his co-host Krista tackle several listener inquiries, providing tailored financial advice.

1. Tony's Fishing Trip Payment Dilemma

Listener: Tony from Illinois
Question: Should Tony pay for his upcoming fishing trip now to lock in the current exchange rate, given the US dollar's decline against the Canadian dollar?

Clark's Advice:
Clark explains the unpredictability of currency fluctuations, advising against committing funds now due to the volatility. Instead, he suggests using services like Revolut or Wise to purchase and lock in Canadian dollars at the current rate without transferring money to the lodge.

Notable Quote:

Clark Howard [09:38]: "Currency movements are so irregular, so hard to judge that I don't know that I would lay money out now for a fishing trip later in the year."

2. Amanda's Cruise Booking Conundrum

Listener: Amanda from North Dakota
Question: Should Amanda book a Mediterranean cruise now or wait for potential price drops?

Clark's Advice:
Given the specific nature of the trip with family members and the uncertainty in cruise pricing, Clark recommends booking now. He emphasizes securing a refundable deposit and the inability to predict future price movements.

Notable Quote:

Clark Howard [14:27]: "I'm going to say something... I would go ahead and book now. You'll be in a position where it will be refundable deposit likely for a long time to come."

3. Mark's Flight Booking Strategy

Listener: Mark from Georgia
Question: Should Mark pay extra for flexibility and Sky Club access when booking Delta flights in Basic Economy?

Clark's Advice:
Clark advises against Basic Economy due to its restrictive nature, such as no seat assignments and limited baggage. He recommends opting for regular economy to maintain flexibility and enjoy additional perks like Sky Club access.

Notable Quote:

Clark Howard [15:24]: "I don't like basic economy. Except for a very last minute booking that you know is going to happen. That's just me."

4. Shelly's Unexpected ER Bill

Listener: Shelly from Florida
Question: Why was Shelly charged a second copay for a follow-up ER visit, and was she wrong to question it?

Clark's Advice:
Clark sympathizes with Shelly and explains that once the situation is no longer an emergency, follow-up should be handled by primary care providers, not the ER. He advises viewing the incident as a learning experience and attempting to negotiate the bill.

Notable Quote:

Clark Howard [30:28]: "You just got to treat this as a very expensive lesson learned and you've done a favor for everybody else."

5. Dave's Gifting Strategy for College Graduation

Listener: Dave from Virginia
Question: Is it beneficial to transfer S&P 500 funds to his daughter's Vanguard account to avoid capital gains taxes?

Clark's Advice:
Clark confirms that gifting the shares is permissible and can help avoid capital gains taxes. He suggests transferring the funds directly within Vanguard and consulting a tax professional for specifics.

Notable Quote:

Clark Howard [32:53]: "You can gift anybody up to $19,000 and there's not even a gift tax implication."

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Clark Minute: The Importance of Early Retirement Savings

In the Clark Minute, Clark emphasizes the critical nature of saving for retirement early, highlighting the significant gap between what people plan to save versus what they actually have.

Notable Quote:

Clark Howard [17:39]: "The earlier you start, the more you save. Changes the game."

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Economic Uncertainty and Family Communication

Clark shifts focus to the broader economic landscape, discussing the potential for a recession and the importance of open communication within families.

Key Points:

• Economic Indicators: While unemployment rates are historically low, the stability is questionable due to potential shifts in hiring and inflation impacts.
• Family Discussions: Clark stresses the necessity of talking to children about financial situations appropriately, alleviating their worries by explaining the family's preparations for economic downturns.
• Couples Communication: He urges partners to engage in regular, non-confrontational money discussions to strengthen financial resilience.

Notable Quote:

Clark Howard [20:02]: "Parents generally avoid discussing with their children what's going on generally with the economy and what it means in their house... it's all about being appropriate for the age of your kids."

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Conclusion and Closing Remarks

Clark wraps up the episode by reiterating the importance of financial knowledge and proactive planning. He encourages listeners to utilize available resources, engage in meaningful financial conversations with their families, and remain disciplined in their savings habits to navigate uncertain economic times effectively.

Notable Quote:

Clark Howard [32:53]: "That's what I'm about and that's what I want for you, is to have more knowledge, more power in your own life."

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Resources Mentioned:

• CrashNetwork.com – Annual insurer report card
• Revolut – Currency exchange and financial services
• Wise – International money transfers

Submit Your Questions: www.clark.com/askclark

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Join future episodes of The Clark Howard Podcast for more expert advice on saving money, spending wisely, and achieving financial freedom.

Transcript

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[Clark Howard]

It's great to have you here on the Clark Howard Show. Mission is to serve you with advice and information that empowers you to make better financial decisions in your life. In this episode, auto insurance is going crazy high and you want to shop around, right? Well, you should. But who should you be shopping with? I got new information for you. And also there's a lot of economic news out there, some negative, but a lot really uncertain. If you got kids, how do you talk to them about that? There's no silver bullet on that, but I have some strong opinions on why you need to discuss with your kids, what's going on with the economy and what it means when within the four walls of your own life. And while I'm on that, if you've got a life partner or a spouse, you need to have conversations with each other about money even more now than normally. But that's later because right now we're going to talk. Auto insurance premiums have gone up crazy amounts over the last several years. And there are a lot of factors I've, I've covered this in the past about how much the cost of used cars inflated, how much the cost of parts is, shortage of body shop mechanics, all these things are factors now. Tariffs on vehicles pushing up the cost of repairs and insurers were not making money on their investments. You know, the way insurance works is they try to at least break even on insuring your home or your car and then make money on the investments from the premiums. Well, what's happened in recent years, a lot of big insurers have actually lost billions of dollars on just the policies themselves. So they've been scrambling to raise premiums to keep themselves solvent. But the thing that I find the most interesting is something that came on my radar screen two years ago. And it's an annual report card on insurers done by body shops, which I find fascinating because you got all these ads that the auto insurers, the big ones, run on TV and some on social media, but still TV has been very popular as an outlet for insurers. And so they're all trying to be cute in them and humanize a very dull product flow from Progressive and Jake from State Farm, then the goofy guy from Liberty Mutual and then the Allstate Mayhem guy. I mean, the ads run all the time and sometimes if you're watching a bad show or bad movie, the ads more interesting than what and entertaining than what you're watching, potentially. So crashnetwork.com does this list once a year where the Body Shop people warn each other and alert each other which insurers are behaving and which aren't. And they get a grade from A plus to F. Now they put out an honor roll each year which they include all the companies from A plus down to a solid B. What's fascinating on this list, there's almost not an insurer on here that is a name that people routinely might recognize. Krista's insurer, Amica Mutual, came in 13 on the list with a B plus.

[Krista]

Wow. I'm surprised. They've usually been higher than that, haven't they?

[Clark Howard]

Well, with the body shop, maybe that's a good score. Auto Owners, which is an insurer in some parts of the country people are familiar with, came in 14th. As to other brand names, not a single big brand name makes the list. They're all smaller. Not marketing based insurers, but smaller boutique, generally service based insurers.

[Krista]

Why don't you run through the top 10?

[Clark Howard]

I'm going to run through the top. I was going to run through all the A's.

[Krista]

Okay.

[Clark Howard]

And then have a link on our notes where people can go to the full list.

[Krista]

Perfect.

[Clark Howard]

How's that?

[Krista]

In the episodes notes. That's amazing.

[Clark Howard]

Number one, North Carolina Farm Bureau, the only insurer in America that gets an A from body shops, meaning that they're cooperative. Cooperative with the body shop. They want to do what's right for the customer. That's what this is about. The only A went to Chub, which is a rich people's insurer. And then Acuity Insurance got an A minus. Don't know who they are. Michigan Farm Bureau, Alpha Mutual and Erie Insurance. Those are the only people who got an A minus, A or A plus. Then the B pluses. Pure Insurance. Another insurer for rich people, Grinnell Mutual. Who are they? AIG Private client. Another rich people insurer, Mutual of Enumclaw. Enumclaw, what is that? Farm Bureau, Property Casualty, Wisconsin Mutual. And already mentioned Amica Mutual. The first well known recognized brand name of a regular insurer. Amica Mutual. The only one in the top 13. You can see the full list of all no name insurers that actually do a good job for their customer. They're not spending money a zillion dollars on cute advertising. They're just insuring people. If you want to go to our link easy or you just go to crashnetwork.com and I love this list because what do people do when they're shopping? When they get most people are with these big insurers and when they get a big premium increase from one, the only places they go for quotes are the other big insurers. Big mistake. Big mistake for your wallet. And while I'm at it, when you're shopping for a car with how expensive auto insurance has gotten shop insurance quotes before you buy a brand that you're unfamiliar with because there's enormous gaps now and the cost of insuring different brands and models. So you might have in your funnel your funnels the vehicles you're interested in considering. You might have three or four different models. If you see what they quote out for auto insurance, you may decide that the third one is a better choice than 1, 2 or 4 because the insurance costs could be so very different.

[Krista]

All right, you ready for some questions?

[Clark Howard]

I'm always born ready.

[Krista]

Oh, this one's from Tony in Illinois. I love fishing. Every year I travel to Canada to fish for a week. Usually I go to a lodge and they charge Americans in the US dollar. This year the lodge I'm going to charges in Canadian funds. Traditionally you pay for your trip when you attend, which for me is in late August. However, I'm given the option to pay now with the US dollar dropping to the loonie. Should I pay for my trip today versus later this? The cost of the trip is 2,680 Canadian, which today is when he wrote this email, $1,931 US dollars because it.

[Clark Howard]

Changes all through every day.

[Krista]

For reference, the Canadian price was actually 1860 this past January. So with the recent drop in the US dollar means this current cost is $71 more than earlier in the year. For context, if I pay now and Something unforeseen happens and I have to cancel my fishing trip. The lodge will roll over my payment to the next year. I can afford to pay for the trip right now. Should I pay now with the risk of the US Dollar continuing to drop or is the time value of money more important?

[Clark Howard]

Okay, Tony, a lot of moving parts here. First, the Canadian dollar has been in a secular decline versus the US Dollar for a good while. Canada is going to suffer mightily unless behind the scenes there were some meaningful negotiations when the new prime minister, Canada Carney, was in the U. S. Meeting with President Trump. If they are able to move towards a deal, the value of the Canadian dollar probably will stabilize. The US Dollar is falling as well, obviously, which is why you're seeing having to pay more. Currency movements are so irregular, so hard to judge that I don't know that I would lay money out now for a fishing trip later in the year. It's just too hard. What you could do, though, if it's really. If you just want to know the cost is what the cost is because you're talking about the US Dollar's recent decline making the trip more expensive in Canadian dollars, which is funny because the Canadian dollar has been in such decline for such a period of time and now we're the ones in decline. This is all so hard to predict, but if you just want to be done with it. I wouldn't give the money necessarily to them, but you may have heard me in the past talk about Revolut and wise. Revolut. You could buy now Canadian dollars at the current exchange rate, lock in the cost of the trip, hold it in your revolut account and then pay later. I don't like you paying now because if something happens, why should you have your money in the hands of the lodge for another year? What happens if the lodge changes hands and your money is not transferred with them and you lose the value of that? I don't like the prepayment, but if you do want to lock in, you can go check out Revolut and also Wise and see what it would cost you now to buy a block of Canadian dollars and lock in the price and hold it till it's time to pay.

[Krista]

This one's from Amanda in North Dakota. My significant other's brother is going on a cruise with his family and has let us know that we can come if we'd like. I like the family. They have two other groups going as well. So we will have about 11 people in their group, 13 with us. The Mediterranean cruise and Summer dates next year have been chosen and they've purchased their tickets already. If I have all this information, should I wait to see if the price softens or buy now? I'm a well seasoned traveler and have been to half of the locations we'll be seeing. But my future husband has never traveled internationally and seems interested in the family bonding aspect of it. So I think a cruise may be a good way to ease him into Europe. The cruise line is Norwegian, if that's important.

[Clark Howard]

Okay, so one of the mainline cruise lines and the the big cruise lines all do wave season, what used to be called wave week in January. You're talking about going next summer. Usually the best deals of the year are offered in January. Each year, by tradition, you already know you're going on this cruise. It's more than a year out. And so it's a bit of a gamble because if you wait till January and the bookings have been really solid for that Mediterranean cruise for that week that's already picked, you can't just opportunistically buy a great deal on something. This is one that's almost a roll of the dice. If you buy now, you're just buying it. Whatever crazy special they claim they're offering that moment when you're booking. And it could go cheaper in January. But again, everything is based on expected occupancy levels and how much they're sold out. It is a gamble to wait till January, which is what I'd normally advise if you were asking me about going on a cruise next summer anywhere. But because this is a specific event to be with specific family members, I'm going to say something. I'm not going to choke saying it. Even though it's hard for me to say it. I would go ahead and book now. You'll be in a position where it will be refundable deposit likely for a long time to come. You can keep watching the prices and rebook over the next many months if you need to, but you'll know you're locked in at no worse than what the price is booking right now.

[Krista]

Would you recommend looking at Costco Travel to see if they have that cruise?

[Clark Howard]

Well, they'll have that cruise and I love for you to use a discounter. The family may already be using a cruise agent. It might be a good idea to use the same cruise agent they're already using. But Costco Travel, if you remember, I mean, Amanda's in the only state. I've never been to North Dakota anyway. I'm not sure that Costco is in North Dakota. Maybe they are, maybe they're not. But Costco Travel is fantastic for saving money on cruises.

[Krista]

Mark in Georgia says when booking on Delta for a family, basic economy is a lot less expensive than Maine. Would you pay the extra to have the ability to change flights and use the Sky Club? Also found out that if you book with Amex Travel, it's considered a third party and Delta will not make any changes for that.

[Clark Howard]

Okay, so if you book any fare through a third party booking and American Express and Delta are as tight as any credit card company could ever be with any airline, all it means is that you would with the online booking tool with Amex. If you book regular economy, you would make your changes there instead of on the Delta app. Except I think day of travel getting your family in the Sky Club. You only get yourself in the Sky Club. You get a couple of passes a year as a Sky Club member to bring in family. Everybody else you have to pay for. The big problem with basic economy is you don't get seat assignments, you don't get checked bags. You obviously have some decent status with Delta. If you're a Sky Club person, you're not going to get the free bags you normally would. I don't think as someone with a Delta American Express card, I just don't like basic economy. Except for a very last minute booking that you know is going to happen. That's just me. I like the flexibility of a regular economy booking that can be changed with full credit. No penalty at any time. Just my opinion. Coming up ahead, talking about family, we'll talk about having discussions about money. With the economy being unsettled now, recession possibility, kind of 5050 as we move through the year, I think it's time to just have talks. Not a talk talks. I'm going to tell you why. Ahead.

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[Krista]

It's Krista from the Clark Howard Show. I'm going to play you what we call a Clark minute. It's sort of a vitamin of advice from Clark squeezed into one minute. Here it is.

[Clark Howard]

This is Clark Howard. How are you doing saving for retirement? Well, the younger you are, the more I want you in the habit of saving money every paycheck or every month. And an employer provided 401k or in your own IRA, preferably a Roth IRA. And let me tell you why. Survey says the average person say they'll need to save $1.8 million for retirement. But what is the average person approaching retirement having saved? 87,000. I want you to think about that. People say, hey, you know, to live the life I want to live and not work anymore, I need nearly $2 million. But then the average person has less than 100,000. That's not going to work. The earlier you start, the more you save. Changes the game.

[Don McDonald]

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[Clark Howard]

So many people in their 30s who are still suffering trauma because of what their parents, what their families went through during the Great Recession following the banking scandals. And so these now adults bear scars from the harshness of the Great Recession where they could have found themselves with both their parents unemployed, they could have found themselves evicted from their home or apartment. Home could have been foreclosed, the apartment they could have been evicted from. That's rough. As a kid, my dad, growing up in the depression, came home twice from school to find themselves a family evicted and Their stuff on the street. And my dad carried that his whole life. So we're not going into the Great Recession, but we are going to have likely some level of rising unemployment from what's a very low unemployment base. The unemployment rate in the United States still by historical numbers extremely low. What economists used to refer to as full employment because there are for every person who loses a job, there's another job out there that may or may not be true later in 25 or moving into 26. And as I said, it's a toss up if we're going to go into a recession. But the reality is employers have been holding on to workers but not hiring as much as before. The holding on to workers that could end later. And plus so many families have been crushed by inflation. That brings me, this whole preamble brings me to something I feel that parents generally avoid discussing with their children what's going on generally with the economy and what it means in their house. Parents are so worried that they're going to bring stress into their kids lives. But it's all about being appropriate for the age of your kids. And it's not a conversation you want to engage your kids because they may be silently worried because a friend of theirs parent lost his or her job or they're worried about what's going on with the ability to spend money in the household. So age appropriate, talking to your kids about where you are financially, what you're doing to prepare. And as I've said for months, this is a time of uncertainty that makes it more compelling, more important for you to build up reserve for rainy day. And if you're doing it, you tell your kids, yeah, it's true, things could get tougher. But here are the things we're doing to prepare. And maybe, just maybe the very thought of talking to your kids about it gets you in gear, doing what you know you should be doing anyway. This is not a time for impulse spending. This is not a time for optional purchases. This is a time that you preserve your cash, you build up reserves and if you're doing that, let your kids know, yeah, things are potentially going to be tougher ahead for some of your friends, parents, things are going to be tougher potentially for us. But here's what we're doing to prepare and be doing it, get with it and do this to prepare. But your kids may be worrying, particularly if they're teens, they may be worrying more than you realize and just not talking to you about it. And so you say, yeah, from time to time, times get tough financially. Here's what we're doing and you'll be surprised. Your kids may surprise you. Say how can I help you engage in that conversation? Now, I alluded at the very top of this podcast and YouTube show about couples. Couples are notoriously bad generally at talking about money with each other. This is one of those inflection times that if that's the nature of your relationship, whether you're married to someone or so someone you're living with, whatever the situation, talk to each other. Not when something bad has happened or you're angry about something, talk about it. Just generally. And it's not a sit down conversation. It's creating new communication in a couple about money. More important during a time where a recession is a clear possibility than even regularly. Because I want you to do this anyway, just now, there's more urgency. Krista okay, do you know who knows if there's going to be a recession?

[Krista]

Nobody.

[Clark Howard]

Nobody. You know, you can, you can have your predictive models and they range anywhere from like 40% minimum to like 70% maximum right now. But it's just a range and it's not a certainty.

[Krista]

Okay, just Another millennial in Washington wrote in with this question. Like Most millennials approaching 30, my husband and I dream of buying a house someday. We made a combined approximately $250,000 a year, which sounds like a lot, but in the Pacific Northwest it seems average.

[Clark Howard]

Isn't that weird?

[Krista]

So crazy. We are diligently saving both in a high yield savings, $3,000 a month, as well as our work retirement plans. Our goal is to have all debt paid off by the end of the year. This would free up maybe $1,000 a month, right? Our problem lies in the question of when do we have enough to start looking at home? Seriously, when? Or do we give up and just rent forever? Any home worth pursuing within an hour of our jobs and with enough space for us to think about starting a family will be at least $1,000,000. We currently have about 100k liquid savings, but I know we should have some on hand for emergencies and fees of buying a home too. Should I lower my 401k contributions to save faster and only get my employer match? I know that goes against conventional wisdom, but I'm just not sure how we can reach 20% down before prices keep going up on homes. I'm sure we're not alone in this, so any advice is appreciated.

[Clark Howard]

So gosh, brutal in the i5 corridor. I mean from the Mexican border in San Diego to the Canadian border in Washington State the i5 corridor is brutal. Housing costs that are just mind blowing to people elsewhere is in the United States, although there are parts of where you went to college, the Boston area, in New England that are having same kind of issues as the i5 corridor on the west coast or as they say in California, the five. There is no right answer for your question, but you're creating the possibilities already by living on substantially less than you make saving money like crazy. I mean, think about what you're doing with the 36,000 a year you're saving in just a savings account that's more than 10% of your pay just right there. Then you're doing the 401k. I mean, you have the right attitude and right discipline to get there. If you decide that you want to, in your case, cut back what you're contributing to the 401k to pick up the full employer match. I know I'm going to shock you, Krista. I'd say because of the the culture of your household where you live so substantially on less than what you make, I'm okay with you doing that. To ramp up savings towards a down payment on a home, you don't have to do 20% down, although that's preferable. You could if you get to 10% with your financial discipline, I'm fine with that. It means you might have private mortgage insurance for a while, or you might do something known as an 801010 where you avoid private mortgage insurance by putting 10% down and borrowing 10% in a second mortgage to go with the first. Because you live so substantially on less than what you make, we don't know what's going to happen with home values going forward other than the rapid acceleration in prices is over. So every year you go forward, your paycheck will buy essentially more than it would have before in the housing market after year after year, it bought less. So with your discipline though, I'm okay with you proceeding on buying a home because you'll handle it and you'll be able to easily handle the payments with an income of more than a quarter million a year. And again, congratulations to you on being such a great saver living substantially on less than what you make.

[Krista]

Shelly in Florida says, back in December, I unfortunately made a visit to my local emergency room. To be brief, I had an infection in my lower back. It required a short procedure and then I was put on antibiotics and sent home. Before leaving the er, I was told to come back in three days for a recheck of the wound. I asked if I needed to make an appointment and was told, no, it's just a recheck. I paid my $200 copay and left. Three days later I went back. I was in my mind 1000% sure there was not going to be a charge for this follow up visit.

[Clark Howard]

No such thing in an emergency room.

[Krista]

First of all, this is a recheck of the wound from the original visit. Second, this was no longer an emergency. I was stunned to later get another bill for $200 for my copay. Why would they ask me to come back to the er? Why not let me know I could follow up with an urgent care which they also own within a mile of my house with a copay of $50 or simply go to my regular doctor with a copay of 25. Am I wrong here? I never ever would have gone back had I known they were going to charge me again. I've been fighting this since January.

[Clark Howard]

Shelley, I am really, really sorry. In this case, you just got to treat this as a very expensive lesson learned and you've done a favor for everybody else. When you were in an emergency mode, going to the emergency room was probably the proper thing to do and fought what could have been potentially a very dangerous infection. But the follow up, when it was no longer an emergency, they should have told you that you should have gone to see your primary care doctor and you cost the insurance company a lot more money and yourself eight times the copay by having gone back to the emergency room. There is never a situation that an emergency room is going to be a better choice for a follow up. It's not going to be in this case. I think you got to look at this as a life lesson and I don't know how many people you've helped just by bringing the situation forward. If you can negotiate with them 100 instead of 200, go for it. Whatever it is, try to make a deal. Otherwise pay the 200 and call it like tuition for your life. I don't know what else. Yeah, it is definitely school. Hard knocks. The great news though is you're obviously okay from that infection.

[Krista]

Dave in Virginia says, my daughter's graduating from Virginia Tech. We're giving her a gift of S&P 500 funds that we had started for her several years ago. The funds are currently in our name with Vanguard. It's about $8,000, but is 40% taxable gains. She'll be moving to the D.C. area and probably could use the cash instead since she will have an income of less than $48,000. This year, I thought we could transfer the share to her Vanguard account and she could sell the shares and pay 0% tax. Am I missing anything here?

[Clark Howard]

Okay, Dave, you are allowed to gift the shares to her. $8,000. Yeah. You can gift anybody up to 19,000 and there's not even a gift tax implication. And you can within Vanguard, I think like most firms, you can gift from your account to her account and avoid, since the investment stays in place, avoid capital gains. What she would have to do, she opens her own Vanguard account and it can be a receiving account and then you move the money over as the existing holding of the S&P 500 fund or ETF. So you just move that across. And only if a financial house doesn't permit that, and I don't know any reason why they wouldn't. That would be how you handle it. Now, I don't know if that is tax avoidance or if that is considered to be uncool to move the money and then immediately claim at the 0%, which would be a 0% tax rate for the sale of it in her case, where you would have probably typically 40% capital gains tax. That's above my pay grade. If there's any restriction on how quickly after the transfer of ownership to her she could turn around, it may be maybe the cap gains holding period starts over as another year. I just don't know that. And if we get a good answer on that, we'll put that in today's podcast show notes. But congratulations to her on graduating and getting ready to start at her new job. That's wonderful. And I want to thank you so much for joining us on today's podcast. It's been great being with you and know that coming up on Friday, we have Clark Stinks. And our goal on this YouTube show and our podcast is to serve you with information that adds to your bank of knowledge. What I should say credit union of knowledge, since banks are too expensive to do business with, that you build up that knowledge base so that you can make better decisions, so that you're empowered with ways that you can save more and spend less and avoid getting ripped off. That's what I'm about and that's what I want for you, is to have more knowledge, more power in your own life. And we'll see you Friday.