The Clark Howard Podcast: "Ask An Advisor With Wes Moss"

Date: August 26, 2025
Host: Clark Howard (with Wes Moss & Krista DiBiase)
Episode: 08.26.25

Episode Overview

This "Ask An Advisor" segment features money expert Wes Moss joining Krista DiBiase to answer listener questions and share practical financial guidance. Main topics this week include navigating large IRA withdrawals and their impact on Medicare costs, understanding tokenization in investing, utilizing AI for financial planning, the ins and outs of real estate investment trusts (REITs), tax strategies for capital gains, and more. The episode blends real-life case studies, audience questions, and clear explanation of complex financial issues—always with a focus on maximizing savings, minimizing costs, and avoiding common consumer pitfalls.

Key Discussion Points and Insights

1. The $125,000 Renovation: IRA Withdrawals & Medicare IRMAA

[01:42–10:33]

• Wes shares a case study involving "Whit and Jen," a retired couple (early 70s) needing $125,000 for a home renovation.
• Their assets are all in a regular IRA, so any withdrawal counts as taxable income—potentially triggering higher Medicare Part B/D premiums via IRMAA (Income Related Monthly Adjustment Amount).
• IRMAA explained: Higher income can suddenly raise your Medicare premiums by thousands.
• Options to limit IRMAA impact:
  • Spread the IRA withdrawal across two tax years ([07:00]), but not always feasible if contractors need upfront payment.
  • Use a home equity line of credit ([07:37]), but "Whit and Jen" didn't want to re-mortgage their paid-off home.
  • Take the full IRA distribution but manage tax payments to hit IRS "safe harbor" rules ([08:30]), delaying the actual out-of-pocket tax and giving more time for planning.
• Key lesson: Major financial events (like renovations) in retirement require careful coordination between tax strategy and withdrawal planning to avoid expensive surprises. Always consult with a CPA.

Wes Moss [05:20]: "There are so many different ways to solve for not inviting Aunt Irma into the house because she stays for a long time. Once you click over that level, now you've got new Medicare costs, and it's going to be that way for the entire year."

2. Explaining Tokenization in Investing

[10:34–13:50]

• Question from Jack in Oklahoma: What is tokenization? How might it change brokerage services?
• Wes’s explanation: Tokenization converts traditional assets (stocks, bonds, real estate, even cash) into digital tokens using blockchain, allowing them to be divided and traded in tiny slivers.
• Robinhood is piloting tokenization in Europe; the US is awaiting regulatory approval.
• Benefits: Lower cost and faster global asset movement, potential for fractional ownership of almost anything.
• Risks: Regulatory uncertainty; widespread adoption depends on SEC and government support.

Wes Moss [12:29]: "If I were a betting man, it's here to stay... But the risk would be that Congress at some point looks upon it and doesn't like it, and they change the regulations."

3. Social Security, Legal Guardianship, and Grandchildren

[13:50–16:20]

• Question from Edward in North Carolina: Can becoming a grandchild’s legal guardian enable the child to receive Edward's Social Security if he passes?
• Wes’s answer: Just being a legal guardian isn’t enough; Social Security survivor benefits depend on dependency status, not just guardianship.
• Key requirements: Must adopt the child or provide over 50% of support with the child living full-time. Survivor benefits more commonly pass from parent to child, not grandparent to grandchild.

Wes Moss [15:15]: "Just being a legal guardian and doing some paperwork doesn’t allow, shouldn’t allow...every grandparent could just legally become a guardian, and their grandkids get Social Security until they’re 18."

4. Rental Income: Pay Down Mortgage or Invest?

[16:20–19:24]

• Question from David in Tennessee (currently in Colorado): Should he use extra rental income to pay down his old home’s mortgage or invest it?
• Mortgage rate is 4.125%. David already has a robust emergency fund.
• Wes’s advice:
  • Paying down the mortgage guarantees a 4.125% "return;" this is conservative but increases peace of mind and move toward mortgage-free living (linked to retirement happiness).
  • Investing excess cash (e.g., into a balanced portfolio or equities) could provide a higher return over 4.125%, but with risk.
  • Decision should depend on personal preference around debt and risk, but either is defensible if emergency savings are strong.

Wes Moss [17:56]: "Not having a mortgage in your primary home is really powerful psychologically and...points and leads toward retirement happiness."

5. AI’s Role in Investing and Financial Planning

[22:00–30:10]

• Segment explores how artificial intelligence (AI) is changing financial research and advice.
• AI is everywhere—search tools (Google, OpenAI, Perplexity) now mostly operate in AI mode.
• In finance, AI is a powerful analyst, not a crystal ball:
  • Great for data analysis: screening companies, modeling cash flow, analyzing retirement projections, planning estate/legacy issues.
  • Weaknesses: Not a substitute for professional tax, legal, or investment advice, especially when handling nuanced, customized scenarios. AI may oversimplify or overlook key variables in complex tax interactions.
• Powerful analogy:
  • Wes Moss [23:15]: "It’s like AI is the equivalent of figuring out how to fly an airplane...but if you don’t have the knowledge on really how to use it, the plane is not going to stay in the air and it’s going to be a disaster."
• Advice: Use AI for research, not final decisions; always verify with experienced professionals.

6. Are REITs a Good Investment?

[30:10–33:20]

• Question from John in Georgia: Pros and cons of investing in REITs (Real Estate Investment Trusts)?
• Wes’s answer: REITs are a structure, not a guarantee of returns:
  • REITs must pay out 90% of earnings to shareholders, allowing them to avoid double taxation.
  • Public REITs can focus on apartments, offices, data centers, industrial or healthcare property, etc.
  • Quality depends on the underlying sector and the management team.
  • Wes prefers index/basket REIT exposure as part of a multi-income strategy.
  • Higher yields than the S&P 500—typically 4% or more in dividends vs. 1.2–1.3%.

Wes Moss [31:42]: "REITs really are a part of multi-asset class income investing, which is the style I really believe in."

7. Capital Gains Planning: Taking Advantage of the 0% Bracket

[33:20–37:48]

• Question from Todd in Florida: Should he sell a successful IPO position this year (in the 0% capital gains bracket), or wait and risk higher taxes next year when family income rises?
• Capital gains tax is progressive (0%, 15%, 20% brackets), and the gain itself counts as income in determining your bracket.
• Blend strategy: Sell enough this year to fill up the 0% bracket; extra gain above that gets taxed at 15%.
• Wes’s advice: Careful tax planning is required in years of big income or investment changes—CPA guidance strongly advised.

Wes Moss [35:33]: “The amount of capital gain you realize also counts towards your income...So just be aware of that.”

8. The Overarching Importance of Tax Planning

[37:48–39:12]

• Financial planning is about much more than investing; tax strategy, withdrawal plans, and even Medicare considerations are vital.
• Most new financial “issues” that derail people are tax-related oversights—they should be anticipated with proper forward planning.

Wes Moss [38:03]: “It’s so much more to financial advice and being an advisor than just the investments...there’s so many other variables—withdrawal strategy, Medicare...all that goes into having a really good financial plan.”

Notable Quotes & Memorable Moments

• [05:20, Wes Moss]: “Once you click over that [IRMAA] level, now you’ve got new Medicare costs, and it’s going to be that way for the entire year.”
• [12:29, Wes Moss]: “If I were a betting man, it’s here to stay... But the risk would be that Congress at some point looks upon it and doesn’t like it.”
• [15:15, Wes Moss]: “Just being a legal guardian and doing some paperwork doesn’t allow...every grandparent could just legally become a guardian, and their grandkids get Social Security until they’re 18.”
• [17:56, Wes Moss]: “Not having a mortgage in your primary home is really powerful psychologically and...retirement happiness.”
• [23:15, Wes Moss]: “It’s like AI is the equivalent of figuring out how to fly an airplane...but if you don’t have the knowledge...the plane is not going to stay in the air.”
• [31:42, Wes Moss]: “REITs really are a part of multi-asset class income investing, which is the style I really believe in.”
• [35:33, Wes Moss]: “The amount of capital gain you realize also counts towards your income...So just be aware of that.”
• [38:03, Wes Moss]: “It’s so much more than just the investments...it’s withdrawal strategy, really understanding your tax strategy, Medicare, a Medicare plan...all of that goes into the comprehensive system of a really good financial plan.”

Timestamps for Important Segments

• [01:42–10:33]: IRA withdrawals and impact on Medicare premiums (IRMAA)
• [10:34–13:50]: Tokenization explained and its potential in investing
• [13:50–16:20]: Social Security benefits for grandchildren—legal guardianship rules
• [16:20–19:24]: Rental income: pay down mortgage vs. invest
• [22:00–30:10]: How AI is reshaping investing and personal finance
• [30:10–33:20]: REITs: what to know and who should invest
• [33:20–37:48]: Capital gains tax planning amid changing income
• [37:48–39:12]: The deep importance of comprehensive tax planning

Takeaways & Actionable Advice

• Major IRA withdrawals can cause a spike in Medicare premiums—plan with a tax advisor.
• Tokenization will transform how assets are traded but regulatory risk remains.
• Social Security survivor benefits are primarily for legal dependents, not just legal guardians.
• Both paying down a mortgage and investing excess cash are good choices if emergency savings are strong; know your preferences and goals.
• AI is excellent for research and modeling—but always validate with human professionals.
• REITs offer attractive income but require selectivity; broad index exposure often safer.
• Take full advantage of 0% capital gains rates in low-income years; stacking gains can bump you into higher brackets.
• Successful financial management requires anticipating tax impacts of investments, withdrawals, and life changes—do not go it alone.

If you’re preparing for retirement, handling a windfall, or just want to get more efficient with your money, this episode is packed with up-to-the-minute strategies, candid expert insight, and actionable tips confirming why Clark Howard and his team remain go-to guides for smart American consumers.