The Clark Howard Podcast – Episode: "Ask An Advisor With Wes Moss" (June 10, 2025)

In this engaging episode of The Clark Howard Podcast, host Clark Howard sits down with Wes Moss, a fiduciary financial advisor, podcast host, radio host, and author. Together, they delve into critical financial topics, answer listener questions, and provide actionable insights to help listeners achieve financial freedom. Below is a detailed summary capturing the key discussions, insights, and conclusions from the episode.

1. Introduction to the Episode

[00:50] Clark Howard welcomes Wes Moss to the show, highlighting Wes's diverse roles and expertise in financial advising. They briefly touch upon the hectic nature of summer as Wes manages his roles as a father of four.

2. Corporate Earnings: Importance for Investors

The first major topic of discussion centers around corporate earnings and their significance for investors.

• Understanding Corporate Earnings

  • [02:07] Wes Moss emphasizes that earnings are a paramount metric for assessing a company's financial health. He explains that while numerous metrics exist—such as revenue, net income, and margins—earnings often take center stage for both individual companies and the broader market.
  • Notable Quote:
    Wes Moss [03:15]: "If there's anything to look at for the growth of the US equity markets, it really comes down to earnings and the growth of earnings."

• Earnings Growth and Market Performance

  • Wes illustrates the relationship between aggregate earnings of the S&P 500 and market indices over time, noting that growth in earnings generally correlates with rising stock markets.
  • He differentiates the impact of earnings on individual stock investors versus index fund investors, suggesting that while individual investors should monitor earnings of their specific holdings, index fund investors benefit from overall market earnings trends.

• Earnings Per Share (EPS) Clarification

  • [05:21] Clark Howard seeks clarification on whether EPS refers to net earnings, to which [05:31] Wes Moss responds affirmatively, explaining that earnings typically represent net profits after expenses.

3. Audience Questions: Proxy Voting

A listener from New York, Clint, poses a question about proxy voting for shareholders.

• [08:48] Clint's Query:
  "I hold seven different stocks in a Fidelity non-retirement account and receive secure emails requesting my proxy vote prior to the annual company meeting. I always vote as the board recommends. Is this a good practice?"

• Wes Moss's Response:

  • Wes explains that proxy voting allows shareholders to cast votes on company matters, akin to voting in national elections.
  • He highlights that while individual votes may have limited impact compared to large institutional investors, participating in proxy votes is a way to exercise ownership rights and influence company decisions.
  • Notable Quote:
    Wes Moss [09:23]: "Companies do listen now, the boards are usually going to get their way because they're lobbying big owners, but you should vote if you have an opinion."

4. Audience Questions: Social Security Strategy (6270 Strategy)

Doug from Pennsylvania asks about optimizing Social Security benefits using the 6270 strategy.

• [11:34] Doug's Query:
  "What do you think of the 6270 Social Security strategy where the higher-earning spouse waits until 70 and the lower-earning spouse claims at 62?"

• Wes Moss's Response:

  • Wes supports the strategy, explaining that it allows the higher-earning spouse to maximize their benefits by delaying until 70, while the lower-earning spouse can access benefits earlier, providing immediate cash flow.
  • He mentions the additional benefit of income insurance, where if the higher-earning spouse passes away, the lower-earning spouse inherits the higher benefit amount.
  • Notable Quote:
    Wes Moss [12:02]: "It's an optimization strategy... it gives a little bit of income insurance because nobody knows exactly when the clock's going to expire."

5. Best Advice Segment: Financial Tips for Beginners

Clark challenges Wes to offer quick advice for someone starting their financial journey.

• [15:02] Wes Moss's Advice:
  • Wes passionately advocates for the Roth IRA, citing its benefits of tax-free growth and withdrawals.
  • Notable Quote:
    Wes Moss [15:02]: "Roth, Roth, Roth. The Roth IRA is the number one thing I want you to do because it forces you to live on less than what you make."

6. Discussion on the Rule of 55

Returning from a brief interlude, Clark and Wes dive into the Rule of 55, an often-overlooked provision allowing early access to retirement funds without penalties.

• Understanding the Rule of 55

  • [25:33] Wes explains that the Rule of 55 permits individuals who leave their job at or after age 55 to withdraw funds from their 401(k) without the typical 10% early withdrawal penalty.
  • Key Conditions:
    • The withdrawal must be from the 401(k) of the job from which the individual has recently left at age 55 or older.
    • Not applicable to IRAs unless rolled over into a 401(k).

• Practical Applications

  • Wes shares scenarios where the Rule of 55 can provide financial flexibility, such as accessing funds earlier for unforeseen circumstances without incurring penalties.
  • He advises on strategic rollovers and the importance of planning to maximize the benefits of this rule.
  • Notable Quote:
    Wes Moss [26:50]: "If you qualify for it, you can start tapping your retirement money at 55 without the 10% penalty. Great."

7. Audience Questions: Rules-Based Funds and ETFs

Scott from New York inquires about the viability and costs of rules-based funds and ETFs compared to traditional index funds.

• [27:27] Scott's Query:
  "Are rules-based funds and ETFs still considered passively managed? Their expense ratios are typically three times that of Vanguard's. What do you think Jack Bogle would say about these higher costs?"

• Wes Moss's Response:

  • Wes acknowledges that higher fees in rules-based or factor ETFs can be justified by the additional strategies they employ beyond mere index tracking, such as screening for specific financial metrics.
  • He cautions investors to scrutinize the factors these ETFs focus on and to ensure that the higher costs align with their investment goals.
  • Notable Quote:
    Wes Moss [31:15]: "They do matter. They do matter... I would use some of these factor rules-based ETFs as it gives me great comfort knowing that I'm investing the way I would like for a portion of my assets."

8. Audience Questions: IRAs, 401(k), HSA, and FSA Management

Danielle from Virginia seeks advice on managing her IRA, 401(k), HSA, and FSA amidst changing employment.

• [31:15] Danielle's Query:
  "Can I roll my existing IRA into my new 401(k) to facilitate a backdoor Roth? Also, can I max out my HSA independently since my new employer doesn't offer a high deductible plan?"

• Wes Moss's Response:

  • Wes advises that consolidating the IRA into the new 401(k) can simplify backdoor Roth conversions by avoiding the pro-rata rule, which complicates tax calculations when multiple IRA accounts exist.
  • Regarding the HSA, he explains that since the new employer doesn't offer a high deductible plan, contributions may be limited. However, if Danielle remains eligible outside of employer offerings, she can continue to contribute independently.
  • For the FSA, Wes recommends contributing only if she is confident she can utilize the funds within the year to avoid forfeiture.
  • Notable Quote:
    Wes Moss [34:14]: "If you know you're going to use it, absolutely. Particularly if you're limited on the HSA contributions."

Conclusion

Throughout the episode, Clark Howard and Wes Moss provide invaluable insights into navigating corporate earnings, optimizing Social Security benefits, leveraging the Rule of 55, and making informed decisions about investment funds and retirement accounts. Their expert advice aims to empower listeners to make strategic financial choices tailored to their unique situations.

Listeners are encouraged to submit their own questions for future episodes at www.clark.com/askclark and to utilize the free resources Clark Howard spearheads—Clark.com and ClarkDeals.com—to further their financial education and savings strategies.

Notable Quotes:

• Wes Moss [15:02]: "Roth, Roth, Roth. The Roth IRA is the number one thing I want you to do because it forces you to live on less than what you make."
• Wes Moss [26:50]: "If you qualify for it, you can start tapping your retirement money at 55 without the 10% penalty. Great."
• Wes Moss [31:15]: "They do matter. They do matter... I would use some of these factor rules-based ETFs as it gives me great comfort knowing that I'm investing the way I would like for a portion of my assets."

This episode underscores the importance of understanding key financial principles and leveraging available rules and strategies to enhance financial well-being.