The Clark Howard Podcast – Episode 08.05.25: Ask An Advisor With Wes Moss

Release Date: August 5, 2025

Hosts:

• Clark Howard – Nationally syndicated radio talk show host and consumer reporter.
• Krista Dibias – Co-host alongside Wes Moss.
• Wes Moss – Certified Financial Planner (CFP), fiduciary, broadcaster, author, and financial advisor.

Introduction

In this episode of The Clark Howard Podcast, Clark Howard teams up with Career Financial Planner Wes Moss for the segment "Ask An Advisor." The discussion centers around essential retirement planning strategies, particularly focusing on the 50 Plus Retirement Catch-Up Toolbox and the 4% Plus Withdrawal Rule. Listeners are encouraged to submit their financial questions to www.clark.com/askclark, fostering an interactive and informative conversation aimed at empowering individuals to achieve financial freedom.

50 Plus Retirement Catch-Up Toolbox

[01:25 – 10:50]

Wes Moss delves into the challenges of saving for retirement, especially for individuals who start late—those with little to no savings by their 50s. He introduces the 50 Plus Retirement Catch-Up Toolbox, a set of strategies and IRS provisions designed to help late savers maximize their retirement savings in the final working years before retirement.

Key Strategies Discussed:

1. Catch-Up Contributions:

   • 401(k) and SIMPLE 401(k): Annual contribution limit increased by $7,500, totaling $31,000.
   • Traditional and Roth IRAs: Additional $1,000 atop the standard $7,000, bringing the total to $8,000 annually.
   • Super Catch-Up (2025): At age 60, an additional $11,250 can be contributed, raising the 401(k) limit to $34,750.

2. Health Savings Accounts (HSAs):

   • Enhanced contributions starting at age 55, allowing an extra $1,000 annually on top of the standard $4,100 for individuals and $8,300 for families.

3. Social Security Optimization:

   • Delaying Social Security benefits beyond age 62 to maximize monthly payouts.

4. Roth Conversions:

   • Converting traditional IRA funds to Roth IRAs during lower-income years (ages 66-73) to benefit from tax-free growth without affecting Required Minimum Distributions (RMDs).

5. Spousal IRA Contributions & Reverse Mortgages:

   • Contributions to spousal IRAs to bolster household retirement savings.
   • Considering reverse mortgages as a last-resort option for those aged 62 and above to access home equity.

6. Income-Producing Annuities:

   • Utilizing immediate annuities to generate steady income streams, with higher payouts for older retirees.

Notable Quote:

“If you have the ability to do so in your mid-60s, it's still doing pretty well in the U.S.”
— Wes Moss [03:30]

Understanding the 4% Plus Withdrawal Rule

[22:26 – 33:26]

Krista Dibias and Wes Moss explore the 4% Withdrawal Rule, a cornerstone of retirement planning designed to ensure that retirees do not outlive their savings. Wes Moss provides a comprehensive analysis of the rule’s applicability, its historical success, and the debates surrounding its effectiveness in today’s economic climate.

Key Points Discussed:

1. Origin and Purpose:

   • Developed by William Bengen in the early 1990s to determine a sustainable withdrawal rate.
   • Aimed to allow retirees to withdraw 4% of their initial retirement portfolio annually, adjusted for inflation, with a high probability (99%) of lasting 30 years.

2. Controversies and Adjustments:

   • Recent challenges due to low interest rates and volatile stock markets.
   • Emerging studies, including those by JP Morgan and Bengen himself, suggest that withdrawal rates might safely exceed 4%, potentially reaching 4.25% or 4.5%.

3. Balanced vs. All-Stock Portfolios:

   • A balanced portfolio (60% stocks, 40% bonds) historically has provided greater security and reduced the risk of depleting funds compared to a 100% stock portfolio.
   • All-stock portfolios, while offering higher chances of growth, carry increased risks during market downturns, potentially leading to significant losses and earlier depletion of funds.

4. Dynamic Flexibility:

   • Emphasizing the need for flexibility in withdrawal amounts based on market performance and personal needs, rather than strictly adhering to a linear withdrawal plan.

Notable Quotes:

“The older we get, the higher those immediate annuity income rates will be.”
— Wes Moss [08:47]

“The 4% rule is a rule that helps us reduce anxiety, reduce worry, and give us some mental armor.”
— Wes Moss [25:00]

Listener Questions and Expert Answers

1. Renee from Colorado: Being One of the Happiest Retirees

[10:50 – 15:43]

Question: Renee and her husband have aggressively saved for retirement, recently became parents via IVF, and have significant investments and minimal debt. She inquires whether they can still be considered among the "happiest retirees" despite not fitting into traditional retiree profiles.

Wes Moss’s Response: Wes commends Renee's achievements, highlighting their substantial savings and low debt as key indicators of a successful retirement plan. He emphasizes the importance of balancing financial security with lifestyle pursuits, suggesting that Renee's proactive financial strategies and optimistic outlook position her well for a happy retirement. Wes encourages maintaining diverse financial moves and fostering personal pursuits to enhance long-term happiness.

Notable Quote:

“You are in such a great scenario. Mortgage wise, kid wise, financial picture wise, core pursuits wise. And I think it'll only get better.”
— Wes Moss [15:05]

2. John from Georgia: Understanding Penny Stocks

[15:43 – 17:31]

Question: John seeks clarification on what penny stocks are and whether they can yield profitable returns.

Wes Moss’s Response: Wes defines penny stocks as shares typically priced below $5. He explains the high-risk nature of these investments, citing low trading volumes that make it challenging to liquidate large positions without affecting the stock price. While acknowledging that minor profits are possible, Wes warns against expecting significant returns, labeling penny stocks as largely unreliable for substantial financial gains.

Notable Quote:

“Penny stocks are typically under $5 and there’s a real lack of volume in these.”
— Wes Moss [15:55]

3. Joel from Idaho: Impact of Pension on Investing Strategy

[33:26 – 38:18]

Question: Joel asks how receiving a pension should influence his investment strategy, particularly regarding the asset allocation between stocks and bonds.

Wes Moss’s Response: Wes compares Joel’s pension to a substantial bond holding, equating a $50,000 annual pension to a $1.25 million bond portfolio based on a 4% withdrawal rate. He recommends a more aggressive investment approach, such as a 100% stock allocation, given the stability provided by the pension. However, Wes advises incorporating a balanced portfolio (70% stocks, 30% bonds) as Joel approaches retirement to ensure liquidity and mitigate risks, especially in scenarios where pension and Social Security may not cover all expenses.

Notable Quote:

“Having one of these pensions gives you the opportunity to be a more aggressive investor.”
— Wes Moss [18:08]

4. Lucas from California: Investing in Emerging Markets ETFs

[38:18 – 42:00]

Question: Lucas is concerned about overexposure to China in his current emerging markets ETF (VWO) and is considering a new Vanguard ETF focusing on countries like India, Brazil, Taiwan, and South Africa. He asks for advice on whether to switch, hold both, or remain with his current investment.

Wes Moss’s Response: Wes advises against holding both ETFs to prevent overexposure to emerging markets. He suggests choosing one option: either continue with VWO, accepting its inherent China exposure due to the integrated nature of global revenues (e.g., S&P 500 companies derive a significant portion of their revenue from China), or switch exclusively to the new ETF focusing on other emerging markets. Wes highlights the importance of diversification while cautioning against concentrated risks associated with geopolitical tensions affecting specific regions like Taiwan.

Notable Quote:

“You can't get away from China exposure unless you just buy a local utility company in the United States.”
— Wes Moss [41:51]

Conclusion

The episode wraps up with Wes Moss and Krista Dibias encouraging listeners to submit their financial questions for future episodes. They reiterate the importance of informed decision-making in retirement planning and investment strategies. Listeners are reminded to visit www.clark.com/askclark for personalized advice and to continue leveraging Team Clark's resources for financial empowerment.

Final Quote:

“Don't lose hope. It's hard for everyone to save significant money and invest in America, but there are tools out there to do it if we have the discipline and the fortitude and the income to do it.”
— Wes Moss [10:50]

Resources:

• Submit your questions: www.clark.com/askclark
• Follow Team Clark for more financial advice and updates.

Note: This summary omits commercial advertisements and non-content segments to focus solely on the informative discussions and valuable insights shared during the episode.