The Clark Howard Podcast

Episode: Ask An Advisor With Wes Moss

Date: August 19, 2025
Host: Clark Howard (Guest Host: Krista Dibiaz)
Guest: Wes Moss, Investment Advisor & Fiduciary

Episode Overview

This episode of "Ask An Advisor" features investment advisor Wes Moss, who fields listener questions and delves into practical financial decision-making strategies. Key themes include asset allocation for retirees, the meaning and implications of an inverted yield curve, recession-resistant sectors, correct international stock allocation, pension decision-making, interest rate outlooks, starting retirement savings as a young adult, and using trusts for elder care planning.

Key Discussions & Insights

1. Asset Allocation for Retirees with Strong Pensions

Segment Start: 01:48

• Case Study: “Marcia and Fred” in their 80s: Both retired with hefty, guaranteed monthly pensions ($3,000 each) and Social Security ($2,000 each), totaling $10,000 per month, exceeding all spending needs.
• They also have substantial investments (75% stocks), but don’t touch this money; it may go to their kids.
• Classic Rule: "Own your age in bonds" (i.e., 80 years old = 80% bonds) is often cited.
• Modern Take: That rule is waning. If your income covers your needs (or more), your investment time horizon may be "infinite"—i.e., for you and your heirs.
• Wes Moss’s Key Quote:
  • “If you find yourself having plenty of income, your investment time horizon is either longer than you might think, or it technically could be considered somewhat infinite.” (07:30)
• Advice: Allocation becomes about preference and risk tolerance, not age alone.

2. Yield Curve Inversion & Recession Risks

Segment Start: 08:13

• Listener Question: What is the inverted yield curve, and will it cause a recession? Are there recession-proof stocks?
• Explanation: Normally, longer-term bonds pay higher interest. An inversion (where short-term rates are higher) historically precedes recessions, but can give false signals.
  • Memorable Quote:
    • “It’s essentially, and this is how an economist would say it, the inverted yield curve has predicted seven out of the last five recessions.” (10:01)
• Recession-Proof Stocks:
  • Wes focuses on sectors, not specific picks:
    • Defensive Sectors: Consumer staples (potato chips, diapers, paper towels) and utilities.
    • Cyclical Example: Industrials (e.g., bulldozer manufacturers) do poorly in recessions.

3. Global Stock Market Allocation Confusion

Segment Start: 12:45

• Listener Nate: Confused by Wes’s prior claim that US is 20% of global equities (vs 50-60% commonly stated).
• Clarification:
  • “Total world market cap right now for stocks... about 120 trillion and the United States is about 60 trillion. So, it’s half.” (14:16)
• Practical Tip: Even though global stocks are 50% non-US, most Americans can keep only 5-15% international due to the global nature of US companies’ revenues.

4. Pension Decision: Lump Sum vs. Monthly Payments

Segment Start: 15:35

• Listener Alvin: Where can I find advice on taking a pension lump sum vs. monthly payments?
• Wes’s “6% Rule”:
  • If annual pension payout divided by lump sum offered is less than 6%, lean toward taking lump sum.
  • If it’s over 6%, monthly payments may be better.
  • “It’s a really good starting guide to be looking for to make that lump sum or pension decision.” (17:17)

5. Where Are Interest Rates Headed? (And Why the Fed Matters)

Segment Start: 18:44

• Analogy:
  • “I think of the Fed as the powertrain. It's the engine...they control the brakes and the gas pedal of the US Economy. Probably the better analogy is just they control the fuel line.” (18:48)
• History:
  • Low rates post-2008 crisis and pandemic led to housing booms; high rates cooled things off.
  • High rates = good for savers (money markets yielding ~5%); low rates reward borrowers.
• Current Outlook:
  • Inflation is near Fed’s 2% target, jobs market is cooling—signs rates may be cut soon (next meeting: mid-September; “over a 90% chance” for a quarter-point cut).
  • Warning:
    • As the Fed cuts, money market rates will fall quickly.
    • “We just have to be careful. If we go into a lower interest rate environment, just be careful about money sitting around in money markets thinking, ‘oh, it was getting five and then it was four...’ That could go down really, really quickly.” (25:23)

6. Young Couple: Retirement Saving Advice

Segment Start: 25:47

• Listener Marcus: 27, paid down debt, $25k in 401ks, feels “behind.”
• Wes:
  • It’s hard to get ahead in your 20s; median net worth is only $7,600.
  • Quote:
    • “It is not just a marathon. It's the Iditarod... that's what saving and investing is about. It’s not just a marathon. It's longer than that. It's harder than that. It's the Iditarod.” (28:08)
  • Use automation: Set up 401k/investment contributions to happen automatically, and let compounding work over time.
  • Krista adds: Whenever new income (e.g., spouse returns to work) arrives, “go all in” on 401k contributions to avoid “lifestyle creep.” (29:46)

7. Elder Care Planning: Should You Put Your Home in an Irrevocable Trust?

Segment Start: 30:29

• Listener Jerry: Is putting your house in an irrevocable trust a good way to protect it from nursing home costs?
• Wes’s Guidance:
  • This is complex, must be tailored by an estate planning or elder care attorney.
  • Pros: May shield home from Medicaid/Medi-Cal asset tests.
  • Cons: Loss of personal control over the home; five-year Medicaid “look-back” applies; ongoing costs.
  • Underlines importance of planning “when the sky is blue” (before there’s an urgent need).
  • Alternatives: Life estate and Ladybird deeds in certain states.

Notable Quotes

• On Time Horizons in Retirement:
  • “When you have guaranteed income streams coming in that, I would say, far exceed, in this case several thousand dollars every single month, your spending need, then your time horizon is to some extent infinite.” — Wes Moss (05:30)
• On Yield Curve Signals:
  • “The inverted yield curve has predicted seven out of the last five recessions.” — Wes Moss (10:01)
• On How to Start Saving Young:
  • “It is not just a marathon. It's the Iditarod...You're on a dog sled and it's like in the dark for almost two weeks...saving and investing is about...harder than that.” — Wes Moss (28:08)

Timestamps for Key Segments

• Asset Allocation for Retirees: 01:48 – 07:51
• Yield Curve, Recession Risks & Defensive Sectors: 08:13 – 12:45
• Stock Market Allocation (US vs International): 12:45 – 15:35
• Pension Lump Sum vs Monthly Payments (“6% Rule”): 15:35 – 17:26
• Interest Rate Environment & Fed Policy: 18:44 – 25:23
• Young Couple Retirement Savings Advice: 25:47 – 30:29
• Placing Your Home in a Trust: 30:29 – episode end

Tone & Style

The episode is informal yet highly educational, blending listener-driven Q&A with data-rich, practical advice. Wes Moss uses real-life analogies (“powertrain,” “Iditarod,” “infinite horizon”) and self-deprecating humor when correcting previous misstatements.

Summary:
This episode is a deep-dive into the nuances of personal finance, with practical takes on shifting retirement “rules of thumb,” interpreting financial headlines, and the nuts and bolts of planning for family legacies and young adulthood savings. Wes Moss is candid, sometimes humble, and always attentive to situational detail, making complex topics accessible for listeners at all stages of their financial journey.