08-11-26 Ask An Advisor With Wes Moss

Summary

The Clark Howard Podcast — Episode Summary

Episode Title: Ask An Advisor With Wes Moss
Date: August 11, 2026
Host: Clark Howard (guest hosted by Krista Dubiaz)
Featured Advisor: Wes Moss

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Episode Overview

This episode is a special installment of the “Ask An Advisor” series, where guest host Krista Dubiaz sits down with money expert Wes Moss to answer listener questions around retirement planning, spending in retirement, the emotional side of money, and navigating major life decisions like relocation. The main theme revolves around achieving a “happy retirement”—not just financially secure, but also filled with purpose and meaning. Wes emphasizes the importance of balancing pragmatic financial advice with lifestyle planning to maximize happiness in the retirement years.

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Key Discussion Points & Insights

The Human Side of Retirement Planning

• Purposeful Planning
  Wes shares that traditional financial planning should be complemented with lifestyle planning, drawing on both numbers and intentional design of a happy, meaningful retirement.

  • “It's not this quest of the biggest villa to make people happy. It's really about a life of meaning.” — Wes Moss (08:22)

• Aristotle and Retirement Happiness
  Wes references the Aristotelian concept of eudaimonic happiness: fulfillment through purpose, not just pleasure.

  • “We’re really looking for what Aristotle branded over 2,000 years ago, which was eudaimonic happiness, which is a life of purpose, a life of meaning, a life of alignment.” — Wes Moss (07:25)

• Vision Boards/Life Maps
  He advocates creating a “Happy Retiree Life Map,” similar to a vision board, listing core values, current/potential pursuits, and aligning them visibly on paper.

  • Supported by a Harvard study showing those who plan for meaning are happier in retirement.
  • “That map sets you up. It puts your mind working towards all of those things as opposed to thinking and hoping that purpose will just land in our laps, which it never does. We’ve got to create it and find it.” — Wes Moss (08:54)

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Q&A Highlights

1. Relocation in Retirement (09:52)

   • Listener: Emily in Virginia
   • Issue: Unhappy in current community, wants to move but has a low mortgage.
   • Advice: “So what if you have a 2.875 mortgage? You don’t want to be locked into a community which matters way more than the interest rate on your mortgage.” — Wes Moss (10:59)
     • Tools: Use cost-of-living calculators (NerdWallet suggested), but the hyper-local aspect (neighborhood, even street) is most vital for happiness.
     • Krista adds: Always rent first in a new location unless you know it intimately. (13:19)

2. Over-Concentrated IRA (Apple Stock) (13:39)

   • Listener: Cheryl in California
   • Issue: 75% of $1.1M IRA in Apple stock—how to diversify?
   • Advice: No tax issues due to being in an IRA—diversify now as if you were starting afresh.
     • “You got wealthy. It's time to stay [wealthy].” — Wes Moss (15:53)
     • Suggested gradual selling, reframing to: Would you put 75% into one stock today? If not, reduce.

3. The Rule of 55 for Early Retirement (16:26)

   • Listener: Anonymous in Georgia
   • Issue: How to find out about penalty-free 401k withdrawals at 55 without alerting employer.
   • Advice: “Go to the 401(k) website and pull down the supplemental plan description…you can just call the 401(k) provider itself and ask a representative that question.” — Wes Moss (17:27, 18:52)

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Spending Paranoia & The “Underspending” Epidemic in Retirement (22:13 onward)

• Segment Opens: “Do you notice a fear of retirees not wanting to spend as much?” — Wes Moss to Krista (22:22)
• Context:
  • 64% of Americans fear running out of money more than death.
  • Even high-net-worth retirees are paralyzed by fear of spending, keeping balances static for decades despite market growth.
  • “What's the point of doing all this grinding and working and saving and squirreling away…if you can't really ever even use it?” — Wes Moss (25:49)
• Withdrawal Strategies Discussed:
  • Referenced controversial advice (spend only 2%/year) as overly conservative and impractical.
  • Reaffirms the classic “4% rule” as a solid, data-backed middle ground for 30-year retirement periods, plus inflation.
  • “That 4% rule of thumb range gives me an ultra-high probability of never running out as long as I have at least 50% in equities.” — Wes Moss (27:33)

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More Listener Questions

Should I Shift to Lower-Risk Investments Before Retirement? (28:27)

• Listener: Lyn in Georgia
• Advice: Yes, with a retirement horizon of only 3 years, now is the time to reduce risk by introducing more bonds (aka “dry powder”) so you are prepared for any downturns.

Can I Retire at 58? (30:47)

• Listener: Steve (“Steve Areno”) in Oregon
• Situation: Debt-free, $1.5M saved, wants to retire at 62—wonders about withdrawal timing and sequencing.
• Answer: “The answer is yes.” (31:56) — Wes crunches the numbers live, showing a 5% withdrawal rate until Social Security kicks in, then dropping to 2.25%. Warns about timing as some assets are locked until 59½, but overall plan is solid.

Paying for Big Expenses—HELOC vs. IRA Withdrawal (34:25)

• Listener: Wendy in Michigan
• Issue: How to pay $175,000 for a garage without derailing Roth conversions/tax planning.
• Advice: Use a HELOC to spread the spending and minimize tax spikes, keeping flexibility for planned Roth conversions. “Ty goes to the HELOC.” — Wes Moss (36:38)

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Notable Quotes & Memorable Moments

• On Retirement Happiness
  “The state matters little. The city matters a little more. The neighborhood in your community matters a lot. And maybe even more than anything, the street matters even more.” — Wes Moss (12:36)
• On Overconcentration in a Single Stock
  “Imagine that you have a $1.1 million IRA and it's all in cash and you need to invest it. Would you buy 75% in one stock? And the answer is no way.” — Wes Moss (15:23)
• On the Irony of Saving
  “What's the point of doing all this grinding and working and saving and squirreling away and dealing with markets if you can't really ever even use it?” — Wes Moss (25:49)
• On Retirement Withdrawal Rates
  “That 4% rule of thumb range gives me an ultra-high probability of never running out plus inflation as long as I have at least 50% in equities.” — Wes Moss (27:33)
• On the Emotional Side of Money
  “Money gives us this huge reaction on the emotional continuum. There's FOMO and fear of missing out… but timing does matter here.” — Wes Moss (29:05)
• On Reader Interaction
  “I'll make a deal with you… I'd love an in season Pink Lady apple from Oregon. And the answer is yes!” — Wes Moss (31:56)

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Timestamps for Key Segments

• [01:55] – Mapping Your Future: The Human Side of Retirement Planning
• [07:25] – Aristotle, Eudaimonic Happiness, and Your Life Map
• [09:52] – Listener Q: Moving for Community/Quality of Life vs. Mortgage Rate
• [13:39] – Listener Q: Managing Concentrated Stock in IRA
• [16:26] – Listener Q: Rule of 55 Early Retirement Withdrawals
• [22:13] – Returning from Break: Spending Fear in Retirement, Underspending Advice
• [28:27] – Listener Q: Changing Investment Risk Near Retirement
• [30:47] – Listener Q: Can I Retire at 58 with My Savings?
• [34:25] – Listener Q: HELOC vs. IRA Withdrawal for Major Purchase

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Conclusion

The episode delivers practical strategies blended with philosophical insights about retirement, aiming to help listeners create not just wealthy, but truly fulfilling and happy retirements. The repeated motif: balance the numbers with intentional lifestyle design, and don’t let fear—be it fear of spending, running out of money, or missing out—steal your hard-earned happiness.

Submit questions for future episodes at westmoss.com/ask.

Transcript

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[Krista Dubiaz]

Welcome to another edition of Ask an Advisor. I'm Christa dibias here with Wes Moss. Welcome back from Michigan.

[Wes Moss]

Wes, Great to be back in the sweltering heat of Atlanta.

[Krista Dubiaz]

That was fun doing the episode with you remotely last week, but it's, it's

[Wes Moss]

more fun to be in the studio, but it's nice to be able to travel.

[Krista Dubiaz]

It is fun because we get to be around everyone that you don't get to see in the background here. We've got Grace, we've got Mallory and Sally working hard to put this podcast and show together for us. So we appreciate all the ladies here. And today, you know, I was thinking about Wes, like, remember when we used to use MapQuest to get around or heaven forbid, paper maps like back in the day and now we have gps. I love one of the things that you talk about a lot, which is, and you're going to share this with us today, how do you really make a plan and a map for your future? Right.

[Wes Moss]

Yes. The human side of it too. We really usually think of that as the just the numbers and we do planning with numbers. But there's a lot to be said about planning on the human lifestyle side for retirement happiness as well.

[Krista Dubiaz]

For sure. And then a lot of people are very afraid to actually, you know, we all worry about having enough money in retirement and then become afraid to spend the money when we retire. Right.

[Wes Moss]

There's a growing body of research around under spending. You think of that as well. That doesn't sound like a problem. That means people have a reserve. But from what I've started to read about and find which then led me to thinking about what really happens in real life. There is a real underspending issue in the United States because of the fear of running out. There's a huge percentage of people that really don't ever want to touch anything and they hate to spend, which makes the saving a grind and then the no spending a grind. So we'll talk about getting through that spending anxiety.

[Krista Dubiaz]

Great. And I, of course, have questions for you that came in at your [e-mail] ask that's W E S M O S S.com ask.

[Wes Moss]

So what does Aristotle teach us about happiness in retirement? That's maybe we'll start this out. And you guys have recently asked, why do so much research around happiness and retirement? Why is it such an important topic to you? So, first of all, I think it's somewhat, it's a little rhetorical to say, why is focusing on happiness so important? Well, of course it is. I don't think anybody would argue with that.

[Krista Dubiaz]

Some people think, though, oh, retirement will make me happy.

[Wes Moss]

But the problem is that we've got these two major we've got our youth, then we've got our working years, and then we've got our retirement. If you think of the life in those three major phases, and the third phase presents for almost all of us a really big challenge to continue to live a happy life. And I think the reason I've started studying it is that I think of it as do you remember the book there's a 7 Habits of Highly Successful People? Stephen Covey, the good old Stephen Covey book, One of the Seven? I don't remember all seven, but I do remember one. And one of them is Begin with the End in Mind. And that stuck with me from when I was probably 20 years old when I read that book. And as I've been in the financial planning business for so many years now, the goal isn't necessarily to just have the most money possible. It's that it sets you up and serves your life so that you have a happy retirement. So the end in mind, the goal is to have a happy retirement, a fulfilling retirement. Now, there's a couple of ways to define happiness, and this is a philosophical question. There's the hedonistic version of happiness, which is about the presence of fun and joy and pleasure and the absence of pain. And that's one way that philosophers talk about happiness. And that's a little bit like the weekend in Vegas version. I'm going to have a whole lot of fun and it's going to Be pleasurable. That's not the brand of happiness that I'm going after, that our listeners are going after, our readers are going after. I think our contingency is probably, and maybe not everyone. There's nothing wrong with a weekend in Vegas, right? For some retirees, I think that can be lots of fun. But we're really looking for what Aristotle branded over 2,000 years ago, which was eudenomic happiness, which is a life of purpose, a life of meaning, a life of alignment. And that's the brand of happiness. When I'm doing my money and happiness and lifestyle research, that's what we're after. So Aristotle said that it's not this quest of the biggest villa to make people happy. It's really about a life of meaning. So how do you do that? You've got the money side and then you've got the life planning side, which doesn't get as much press on the money side. We've already covered this. I've talked about the green zones in answering a lot of our questions and I've written about the green money zones. One is about investable assets, one is about income, one is about the housing money green zone. So I'm not going to go over that today. But let's just assume we've got the three money green zones and we're good on the money side and we have a plan, a retirement timeline so that we feel really comfortable that we're not going to run out. So now those money green zones are just supporting the human side of retirement. And one of the exercises I think is a really fun, very much just lifestyle only exercise. Because remember, I know statistically from my research that the happiest retirees have five plus core pursuits. These are super activities that we love to do when we stop working. And by the way, here's the challenge. We stop work, so we lose socialization. As we're stopping work, we're usually getting older, so we lose socialization, we lose the purpose of our work, we lose structure. And at the same time, Krista, and you're kind of already there. I'm not quite there yet. Our kids move out, so we get hit with all these different really major. Those are all life headwinds that we have to make up for. And that's why, again, the study of happiness is so important to me. What are the things that the happy retirees do well in their five core pursuits? Five plus, they're supported by a plan so they can do those things. And it doesn't matter what they are. It doesn't matter what those hobbies on steroids are, what those activities are. It's a matter of having a long list of them that are really in two main categories. The daily, hey, what am I going to do? Every day, every week, every month, Then roll up to your yearly or larger purpose when you're in retirement. And I give credit to two places for this exercise that anyone listening can do. And it's fun. I think it's a lot of fun. One, from Wendy, a listener in Pennsylvania who wrote in. And two, the Harvard Business Review did a article about this transitioning into retirement and what makes people happy versus unhappy. So thank you to Wendy and to Harvard for this. She sent me her happy Retiree life map. And essentially, you list out your core values. What's most important to you in the world, family, lifestyle, let's say travel, volunteering, et cetera. And then all of your potential current core pursuits or ones that you're curious about adding to the list. And then draw that out with a colored pencil, maybe. It's lots of different colors, little icons, and in one giant page that lists all those major categories, then all the activities underneath. And what the longitudinal Harvard study showed, and what Wendy, I think is showing in practice, is that that map sets you up. It puts your mind working towards all of those things as opposed to thinking and hoping that purpose will just land in our laps, which it never does. We've got to create it and find it.

[Krista Dubiaz]

Reminds me of a vision board. So it's basically like a sor of formalized vision board.

[Wes Moss]

It is a, I call it a happy Retiree life map, but it is very much like your own vision board. Harvard study proved out that the participants that did that and drew it out in an intentional way 10 years out, were much happier in retirement, much more life satisfaction, the Aristotle brand of happiness, than the folks that had very little that they put down on that initial human side, lifestyle side of that next third phase that is, I think, more challenging than the first two.

[Krista Dubiaz]

Okay, well, let's go to some questions to challenge you here, Wes. Emily in Virginia says, we moved to Virginia five years ago and I really don't like it here. We aren't near any family and community has been difficult to build. People here are very spread out, so there's a lot of friction in terms of establishing relationships. I want to move to Colorado or back to Europe. We lived in England for many years for my husband's government job. We have a 2.875% mortgage on this house. So if we move we will lose that. Two questions. One, can you suggest a reliable cost of living calculator where we could see the difference between states? And two, how do you counsel families on whether to move or not if they are unhappy in their current location, but moving to a new place may make their lives more expensive? I don't want us to stay in this place only because of a mortgage interest rate. But I recognize that moving and buying a house now comes with drawbacks.

[Wes Moss]

Emily, I'm right with you. I've known many a family in retirement, they moved to a place thinking it's going to be this great new retirement life. And it stinks. And it stinks not because of the cost of living, because you know what that's going to be and not because the weather. It stinks because of one word community. And you said that word, there's no family near you. The community has friction to meet people. And that makes so what if you have a 2.875 mortgage? You don't want to be locked into a community which matters way more than the interest rate on your mortgage. That's what the key here is. So I'm telling you, move, move, move. But with some caveats. One, there are a bunch of good online calculators that take census data from cities. Like nerdwallet has a really good one. And you can say I live here in thinking about moving to this city and it gives you the up or down as far as cost of living. As long as you stay away from the coast of California where everything is double, triple, quadruple or maybe New York, Boston, Boston, outside of those super expensive areas, you're going to be able to find a place outside of Virginia that's equivalent, maybe a little more expensive, maybe a little low. So that's not going to be a problem. But the move is hyper local and your hyper local area in your community, that's what matters. So you need to talk with this is a huge thing I think a good real estate agent can be good at is knowing the communities in a new city that you don't know and then just knowing anyone. Like if somebody asked me or Krista about, tell me about Atlanta, where should I go if I want these three things. We've lived here for 20 plus years. We know this community and we can say here are three places you should really look at. So the state matters little. The city matters a little bit more. The neighborhood in your community matters a lot. And maybe even more than anything, Emily, the street matters even more. And I know that's a harder thing to map out prior you really got to test it out. But you need to find a community that's welcoming where you have socialization and a good a friend in that community or in that city can probably direct you. A really great a great real estate agent can do that. You want all the things that matter to you to be surrounding you with like minded people that are easy to meet. Forget the mortgage, you do the COLA on cities, that's no big deal, but just get hyper local so you find the right community.

[Krista Dubiaz]

I would also I've heard Clark say this a lot and I totally agree. I would rent wherever you're going to go unless you're really familiar with it. Maybe you lived in Colorado before and you love this specific neighborhood, but I would rent for at least a year totally and just see if you really like it there so you you don't get into another mortgage and have all the costs and stuff associated.

[Wes Moss]

Good idea.

[Krista Dubiaz]

Cheryl in California says I have what I call a good problem. In 2011 I bought Apple stock and after several splits and some sales I now own 3,800 shares worth more than 1.1 million with a cost basis below $7 per share. The stock is held in my traditional IRA and now represents about 75% of my total portfolio. I'm 63 and hope to retire in about four years. I know having so much of my retirement savings tied to one company is risky, but I'm hesitant to sell because Apple's performed so well Right now I sell about 10 shares at a time when the price rises and reinvests the proceeds in bond funds, S&P 500 index funds and Vanguard ETFs. Between my salary, my husband's pension and his Social Security income, we have enough cash flow and I don't expect to need withdrawals from my IRA until I retire. What would you recommend? Should I continue gradually reducing my Apple position and what percentage of my portfolio should it represent by the time I retire at 65 or 66? How can I balance protecting my retirement savings with the fear of selling too much and missing out on future growth?

[Wes Moss]

Cheryl, you're caught between FOMO and true fear, FOMO and truth here. This would be a really hard question if this was an after tax brokerage account and every single time you sold you're paying long term capital gains and you've got to worry about how much in long term capital gains because that will determine your long term capital gain rate. Could be 0, 15 or all the way up to 23.8% if you put all the different taxes in, the great news is all your Apple stock's in the crock pot. It's all protected for its. There's no worry about taxes. Your diversification process essentially costs you nothing. And I would ask yourself, you've gotten wealthy now, Cheryl. You're going into retirement. It's your job to stay wealthy. And because you have no tax ramifications in the crock pot, you can diversify tomorrow and not have any tax consequences. So this is an easy answer, Krista. This is super easy because I want you to imagine, Sheryl, for a second that you don't have a $1.1 million account that's in Apple or any individual stock. Imagine that you have a $1.1 million IRA and it's all in cash and you need to invest it. Would you buy 75% in one stock? And the answer is no way. So reframe how you think about it and reframe it as what would I be doing if I were to start today with this 1.1 million? And I bet you the answer is that it's not all in one stock. So the great news is it's easy to diversify today. And that's how you should be thinking about this. You got wealthy. It's time to stay.

[Krista Dubiaz]

Okay. Anonymous in Georgia says I turn 55 next year and I'm considering retiring early. Given the rule of 55 allowing 401k withdrawals without the 10% penalty in the year you turn 55. How do I find out if my employer allows this without letting them know I'm considering it? That's a good question.

[Wes Moss]

It is. Krista, does she go to the HR department?

[Krista Dubiaz]

No.

[Wes Moss]

No.

[Krista Dubiaz]

I mean, can't you find out about your plan in another way?

[Wes Moss]

Here's my first thought. If you think, if you are worried about asking a basic, fundamental employee right conversation to your HR because you're worried that they're going to push you out, you've got bigger problems in your job.

[Krista Dubiaz]

Yes, but you don't want to say I'm thinking of retiring, like next.

[Wes Moss]

You know, everyone's thinking about retiring all

[Krista Dubiaz]

the time, but in the next year or whatever.

[Wes Moss]

I understand. I get it. First of all, it shouldn't be a problem next year.

[Krista Dubiaz]

Oh, next year it shouldn't be a problem.

[Wes Moss]

But I get if you're uncomfortable, so I'll answer your question. Anonymous in Georgia.

[Krista Dubiaz]

I get it. Anonymous.

[Wes Moss]

I'm with you keeping this anonymous. So here's what I would say without going to HR and your company you can go to the 401 website and pull down the supplemental plan description. I think it's the sponsor or something, or the supplemental plan document that describes everything in the plan. Remember the rule of 55? That's part of the tax code. It's allowed for every plan. But some plans do make it difficult because they don't let you take money periodically throughout the year. So it kind of makes it so that it's hard to utilize that rule. And you can't just roll it into an IRA and still use the rule of 55, because that's now 59 and a half in an IRA. So two ways to do it. One, just download that plan document and look for. If they address that number one, the rule of 55, they probably won't. But if they say that once you leave the money you can take it out freely in any increment you want, then the tax code rule should kick in and you should be fine. If there's anything about a limitation on how many withdrawals you're allowed to make in any given year or you have to take all of it at once, that's your message that it wouldn't be allowed. The other thing you can do is go directly to the 401k provider, not necessarily the HR person at the company.

[Krista Dubiaz]

Right? Exactly.

[Wes Moss]

You should be able to just call the 401k provider itself and ask a representative that question. And there's no. They're not talking to the company, they're just taking inbound calls. So anonymous in Georgia. You can find this out, no problem.

[Krista Dubiaz]

Okay, we will be right back. We're going to take a quick break and then you're going to talk about withdrawing money in retirement.

[Wes Moss]

The big underspending question in America.

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[Wes Moss]

Welcome back to Ask An Advisor here on the Clark Howard Show. I'm Wes Moss along with the Krista Dubiaz.

[Krista Dubiaz]

Thank you.

[Wes Moss]

We're gonna go right into. Do you feel as though. Do you notice a fear of retirees not wanting to spend as much?

[Krista Dubiaz]

Yes. I see it in my own father. Sure. Yeah. I think all of us, like you wanna make sure you have enough to make it through. And so, yeah, you're probably always afraid of taking out too much and you wanna have a buffer and because we all hope we're going to live forever, right?

[Wes Moss]

We all want to live forever and we want to never have to worry about running out of money. But that's one of the greatest fears in all of money planning, retirement planning, aging, et cetera. And today I want to address something. Maybe it's as simple as why you should not be scared to spend money in retirement. A couple of things. One, 64% of Americans say fear running out of money more than they fear death itself. My own research shows that more than 50% of Americans list as their top fear financial fear. Their number one financial fear, one of their top main fears is running out of money. It's very, very high if your assets are low or not in the money green zones. But even in the money green zones, people are still worried about it. And the $3 million plus category, folks that have over $3 million saved, one in four of that still top financial concern, running out of money. And what does that lead to? It leads to and I don't know if you would call this a problem. Maybe it's because Clark Howard and you are so good at your jobs. People, there's almost an epidemic of underspending when it comes to retirement. Now, the statistics here are still interesting. About a third of all folks by the time they get to age 80 still have as much in their retirement balances as they started with 15, 20, 25 years prior. Now, part of that, I think, is market growth. And people are only taking out what they're following. Let's call it the 4% plus rule. But I notice it too, as I've started to read and learn about this. There is a real fear of taking money out of retirement accounts, not to mention the taxation of that. The more we take out, the higher our taxes can go. But really, most of this comes back to the genuine human fear that at some point you are spending too much and you're going to run out because you can't. You're worried about big costs in the future, a medical cost, healthcare issue, some sort of major housing cost, and it paralyzes us from spending. Now, there was a great article. One of my favorite writers, Wall Street Journal was Jason Zweig, who wrote youe Money in your Brain, one of my favorite money and psychology books. He profiled a new book coming out where the authors are retirement planning researchers and they say that you should be approaching retirement spending in a different way. Start with it's kind of the know thyself angle, where it's not about the dollars so much and not about the percentages. But if you are deathly afraid of spending, and spending makes you uncomfortable and watching Your account balance ever go down makes you very nervous if you're in that camp psychologically. The solution, they say, is to take only 2% of your money in any given year, so have 50 times in savings what you're going to spend in any given year.

[Krista Dubiaz]

Wow.

[Wes Moss]

So to some extent that's correct. If you only spend 2%, you would mathematically almost never have to worry. You would just not ever have to worry about running out. But, but it's also silly in practice because it makes it so that if you've got a million dollars and you can only spend 20,000 a year for the rest of your life. So it gets into the. I'm from Pennsylvania. There's a phrase that was very often said growing up, and this is more of a, for some reason I think of this as a Pennsylvania thing. What's the point? What's the point of doing all this grinding and working and saving and squirreling away and dealing with markets if you can't really ever even use it? So the suggestion from this Wall Street Journal article, and it's not from the author, it's from the authors of the book they're talking about to me is true, but silly in practice. That's why I go back and default to There is no agreed upon exact number. We don't know because we don't know how long we're going to live. We don't know how markets are going to do over time. But there's often this suggestion that you could only use two, two and a half. Some studies say 2.7% of money, some will say 5 or 6%. It creates confusion that leads to more fear. And almost anytime there's this great financial debate on two sides, one camp says just take 2%, one camp says you can take 6 or 7%. The answer is almost. It's very often just kind of right in the middle. And that's why I subscribe to the max out without running out philosophy that William Bengen came up with many years ago. And I've tested it and I've done the math too. Our team, we've run these numbers as well at different withdrawal levels. And that 4% range really does work in almost every 30 year market cycle. You can find from month to month to month over 30 years without running out. So to be able to know and have the knowledge and the confidence, Krista, so much of it is about just if we are educated, have the confidence that this 4% rule of thumb range gives me an ultra high probability of never running out plus inflation as long as I have at least 50% in equities. To me, that's what we should continue to remind ourselves about. Land on it helps us sleep at night and makes it so that we don't under underspend our retirement assets and not do the things that we want to do. And we save to do in the core pursuits we love. Because then what's the point of being able to stop work going into retirement to begin with?

[Krista Dubiaz]

All right, well, we will go to some questions now for you. Wes Lynn in Georgia says my current plan is to retire in 3 years. Even though my 401k is killing it right now. It's also terrifying me with these unbelievable returns and all the constant drama in our country right now. I'm so afraid a meltdown is around the corner. I've watched losses come back with the drops of 2000 and 2009. But I'm going to need my money. Is now the time to move into a less risky fund? My current funds are only rated an average risk. My investment group offers some below average risk funds with decent returns.

[Wes Moss]

Hey, Lyn, I'm with you. I Love this. Your 401k is killing it. Killing it. But you're also scared to death. A lot of big language in there, Lyn. And it's because money gives us this huge reaction on the emotional continuum. There's FOMO and fear of missing out. We had a question earlier about that. What if I sell this stock and it goes up 30% and the market only goes up 5? I missed out. You're worried about the opposite thing happening right now. But timing does matter here. Now. Your window to use the money has gotten shorter. Your horizon is soon. Three years. Two. Three years. So you owe it to yourself to take away that worry by having the diversification and asset allocation you might not have right now. Because if your 401k is killing it probably means it's almost all in stocks. And it's had this. We've had A great last 12 months in market, so it's probably up a bunch. That's great news. What a great time to rebalance and diversify into making sure you've got some bigger wedges of the pie that are in those below average risk. Those are likely the bond funds inside of your 401k. That will count towards your dry powder, which you want three years worth of spending in your dry powder in the overall pie. That can help you not worry as much about those big dips you talked about. You talked about recoveries from 09 with the financial crisis and then we saw another one in Covid and then we saw another one in 2022. They're going to happen. But if you have dry powder, you can be using that while you give the stock side time to recover.

[Krista Dubiaz]

Okay. Steve Areno in Oregon. Steve Areno an apple for your thoughts. Wes I'm 58, debt free, including my house, married and have always lived below my means and saved. I have self managed accounts consisting of 566k in a traditional IRA, 412k in two 403s, 240k in Roth IRAs, and 250k in high yield savings dry powder. Household income is about 175,000 and we live on about 75,000 a year in household expenses. We're expecting about 3, $500 a month combined Social Security at 62, which I want to take then as I want to enjoy life while I'm younger. I'm really burned out and would love to become one of the happy retirees you talk about. I just don't know how to figure out how to stop order of withdrawal if so, etc. Can I retire? I'll send you an apple if you say yes. For those of you who don't know, Wes loves apples.

[Wes Moss]

Steve Areno all right, I'll make a deal with you. Well, first of all I'm gonna say yes. And what I'd love is a in season because Steve Areno, where is he from again?

[Krista Dubiaz]

He's from Oregon.

[Wes Moss]

Oh, perfect. It's like it's one of the best places for apples on the planet. Oregon, Washington State. I'd love a in season pink Chris Pink lady apple in season from Oregon. And the answer is yes. Now here's why my math, and this is quick, but if you add up all those numbers, 566 to 412, 242, you have almost a million five. Okay, you said you needed 75. You've got a gap from 58 to 60. You said you want to retire at 62, so you have a four year window before social kicks in. So you need the full 75 and it's got to come from your assets. What's 75 divided by 1.5 million? It's 5%. Little bit high from the 4% withdrawal rule, but it's a rule of thumb. So 5% is totally fine for a little while. For a couple of years maybe. Totally fine long, long term. Steve Areno but it works right now. And then guess what, your social's going to kick in and when Your social kicks in in four years, which was 35K. 35. Look, 75 minus 35 is what? 75 minus 35. You think I should do this?

[Krista Dubiaz]

It's 3,500amonth. So it's actually 42K, isn't it?

[Wes Moss]

42. So 75 minus 42. This is all pretext. Only 33 grand of a gap. Steve Areno. 33 divided by what? Divided by 1.5 million. Now your withdrawal rate drops all the way down to two and a quarter, my man. So you're good Apple.

[Krista Dubiaz]

That's assuming no growth in those four

[Wes Moss]

years, and that's assuming no growth. But the 5% rule does escalate for spending now. Look, so it's not a money problem. The numbers work. It's not a math problem. Maybe a little bit of a time problem. Because you're only 58. You can't use those IRAs until you're 59 and a half. You do have some Roth money in there, so those contributions are always available. Think about where the money's going to come from. Maybe some of the Roth contributions coupled with that after tax account to keep your taxes low during that period of time. There's a little bit of a timing issue, but mathematically I see this thing working out. Because guess what? Steve Areno has no debt and no mortgage. You're hitting all these money green zones. So this works. The apple is a pink lady, my friend.

[Krista Dubiaz]

All right. Wendy in Michigan says, my husband and I are building a large garage and the all in cost is a about $175,000. I'm retired and my husband will be at the end of this year. We're 60 years old. I receive a pension of 35,000 a year. And we have about 2.1 million in a traditional IRA and 200,000 in a Roth. We don't have any debt and our monthly expenses are about $4,000. We were planning on withdrawing the money to pay for the garage from the ira, but we were wondering if doing a HELOC would be a better way to pay for it. We are paying $35,000 in cash, so the loan would be $140,000 at about 6% interest rate. We also want to do some Roth conversions in these next few years. So that needs to be taken into account. What is your opinion on this matter? What's more economical, HELOC or IRA withdrawal?

[Wes Moss]

Wendy in Michigan, the garage 140. I probably lean towards the HELOC because your, your monthly spending's already so low. And if you were to pull out $140,000 from the traditional IRA, assuming you don't want to use the Roth, which I wouldn't want to use that for this. It's a big tax number. But you also only have $35,000 in income. So you're already in a pretty low bracket. But the $140,000 creates a big taxable issue. And now your taxable income goes to 175, almost $200,000. And now your tax rate percentage goes way up. So that's why 25% tax rate on 140 kind of pales in the comparison of what the interest would be and the principal payment for that loan from a heloc. So I'd lean towards I would use a HELOC and then just know to pay it back, but pay it back over a pretty short period of time because that way you can spread this thing out over two or three years. And that way you don't have to take a giant chunk out of the IRA to do so at the same time. Wendy, there's some complication about taking big chunks from an ira, but you're also doing Roth conversions. A Roth conversion will also increase your taxable income too. So you can do it, but it takes really careful tax planning. If you're pulling out of the IRA to spend and pulling out to convert, both of those are going to increase your income. So because now that I'm talking this through, the more I think about it, if you're going to try to accomplish both of those goals, the heloc, really, what does it do? It buys you time to spread out what you have to pull out from the IRA so that you keep your taxes low. Ty goes to the heloc. Wendy.

[Krista Dubiaz]

All right, that's going to do it for us today on Ask an Advisor.

[Wes Moss]

That was fun. Great questions today.

[Krista Dubiaz]

Super fun. If you want to hear about the money, green zones and more, you can pick up Wes's new book, exciting Retire Sooner Method, Retire Sooner Method. And you can ask [e-mail] ask thank you so much for being with us. We hope that you'll subscribe to our YouTube [e-mail] Clark Rate us wherever you listen or watch. We really appreciate it so much and hope that the rest of your day is awesome.

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