09-23-25 Ask An Advisor With Wes Moss

Summary

The Clark Howard Podcast

Episode: 09-23-25 – Ask An Advisor With Wes Moss
Date: September 23, 2025
Host: Clark Howard
Guests: Wes Moss (Advisor), Krista Dibiaz (Co-Host)

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Episode Overview

On this “Ask An Advisor” edition of The Clark Howard Podcast, money expert Clark Howard’s team delves into the recent Federal Reserve interest rate cut, the implications for mortgages and the stock market, and addresses pressing listener questions about business banking, retirement strategies, dividend investing, Roth IRAs, and more. Wes Moss, Certified Financial Planner, provides actionable advice for individuals and small business owners, and gives a candid exploration of Americans' biggest retirement fear—running out of money. Throughout, Wes keeps the discussion approachable, pragmatic, and lighthearted.

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Key Discussion Points & Insights

1. The Federal Reserve’s Recent Interest Rate Cut

Segment begins at [01:36]

• Interest Rate Cycle Context:
  Wes Moss recaps how, for years post-2020, the Fed held rates at zero, making borrowing cheap. In response to inflation, the Fed elevated rates significantly—pushing mortgage rates from 3% up to nearly 8% by October 2023, resulting in a housing market freeze.

• Current Situation:
  The Fed has just cut rates by a quarter point. The current 30-year fixed mortgage average stands at 6.13%, down from the peak but still above pandemic lows.

  "If you have a 3% mortgage, you’re not moving. You're locked in, and you have very little motivation to start...and trade in your 3% mortgage for a 6% mortgage." (Wes Moss, [05:07])

• Impact on Borrowers:
  Borrowers with variable-rate debt or new borrowing will see slight relief, but the cut is minor.

  "A quarter of a point is not that much, but it's not nothing." (Wes Moss, [08:53])

• Fed’s Balancing Act:
  The Fed is torn between keeping inflation in check (still hovering at 3%, above the desired 2%) and preventing job market slowdown (job growth has slowed to a crawl).

  "They really had to thread the needle here. And essentially what Chairman Powell said is...we've got risk to the downside in the job market, and that seems to be slightly bigger of a risk than more inflation. And that's why they cut rates." (Wes Moss, [07:19])

• Historical Stock Market Impact:
  Wes references 40+ years of history: in 19 out of 20 past instances where the Fed cut rates while the stock market was near a high, stocks were up a year later, by an average 12.9%.

  "You’ve seen a 95% historical data that shows markets are up on average 12 months later." (Wes Moss, [09:04])

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2. Listener Q&A with Wes Moss

A. Small Business Savings Strategy

Karen from Wisconsin, [09:34]

• Scenario: Karen’s daughter, a photographer, keeps profits in a no-interest business checking account.
• Advice:
  • Operate under an LLC.
  • Only keep a buffer in the business checking.
  • Move surplus to a business high-yield savings account—“Banks count on us being lazy…You have to be vigilant.”
  • For longer-term goals (like buying a wedding venue in 5–7 years), consider a balanced mutual fund, not something aggressive.

  "Put as much as you can in High Yield Savings and then if there’s some real money there, invest at least some of it for a big purchase in the future." (Wes Moss, [13:56])

B. Dividend Investing Choices

John from Rhode Island, [14:16]

• Reinvest Dividends or Allocate Manually?
  • Both effective; for simplicity and consistency, automatic dividend reinvestment (DRIP) is best.
  • Manual reinvestment lets you rebalance, useful in retirement.

  "The easier and frictionless we can make investing...usually the better." (Wes Moss, [15:10])

C. Backdoor Roth IRA Logistics

Michelle from Oregon, [16:36]

• Issue: Earnings over Roth IRA limit require recharacterization, producing excess gains that complicate things.
• Advice:
  • It's a “good problem to have”—you’re maximizing all available options.
  • Simplifying by making annual contributions and converting right away may be best; don’t chase perfection.

  "The enemy of a good plan...is the dream of a perfect plan." —John Bogle, quoted by Wes Moss ([19:06])

D. Retirement's Biggest Fear: Running Out of Money

Wes’s research, [22:52]

• Audience Questions: What keeps you up at night? Is it headlines, geopolitics, the economy?
• Core Anxiety:
  • Nearly half of Americans cite “running out of money in retirement” as a top fear, across all wealth levels—even among those with $3M+ saved.
  • Inflation erodes purchasing power (dollar has lost 47% since 2000).
  • The solution is clarity through planning, not just piling up more assets.
  • “Rich ratio” formula: income ÷ expenses.
  • Regular review and updating of the plan helps alleviate worry.

  "Clarity is the antidote to not worrying about running out of money." (Wes Moss, [27:41])

E. Spousal IRA Contributions in Retirement

Jeffrey from Virginia, [30:42]

• If your spouse has earned income and you file jointly, you can contribute the max to your Roth IRA—even if you are retired and have no earned income yourself.

F. IRA 72T Withdrawals and New Employment

Jason from Florida, [32:26]

• It's possible to take 72T distributions from an IRA and later re-enter the workforce contributing to a 401(k).
• Consider applying 72T rules only to a portion of your IRA, to preserve flexibility.

G. High-Income ETFs—Too Good to Be True?

Jonah from Florida, [34:47]

• Caution advised with income-focused ETFs like QQQY; payouts may look attractive, but they're based on options premium, not dividends/interest.
• Net asset value may steadily decline.

  “You never want to hone in on just one thing...particularly something when you’re getting the whiff of too good to be true.” (Wes Moss, [35:41])

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Notable Quotes & Memorable Moments

• On mortgage market inertia:

  "Honey, ain’t nobody moving. And it’s slow as molasses." (Wes Moss quoting a mortgage professional, [04:54])

• Dividend reinvestment clarity:

  “The easier and frictionless we can make investing, which is already kind of a full time job or a full time sport, usually the better.” (Wes Moss, [15:10])

• On planning for retirement fears:

  “It is a planning solution and it is a clarity versus fuzziness solution. And if you have clarity, you start to sleep better at night.” (Wes Moss, [28:29])

• When discussing high-yield “too good to be true” products:

  "Just because these investments have worked over the last few years doesn't mean they'll always work...Limit your exposure, limit your risk. Just be really careful here." (Wes Moss, [36:33])

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Timestamps for Important Segments

• [01:36] – Federal Reserve rate cut impact and mortgage/employment discussion
• [09:34] – Listener Q&A: Small business banking and saving strategy
• [14:16] – Listener Q&A: Dividend reinvestment versus manual allocation
• [16:36] – Listener Q&A: Backdoor Roth contribution logistics
• [22:52] – Segment: The biggest fear in retirement is running out of money
• [30:42] – Listener Q&A: Spousal IRA contributions during retirement
• [32:26] – Listener Q&A: Taking IRA 72T withdrawals and then returning to work
• [34:47] – Listener Q&A: The risks of high-yield, option-based income ETFs
• [37:36] – Outro

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Episode Tone

The episode is approachable, practical, and deeply focused on real-world financial decisions. Wes Moss combines technical acumen with relatability, often lightening the tone with friendly banter with Krista and clear, regular-person analogies ("slow as molasses," "banks count on us being lazy"). Advice is always wrapped in encouragement to plan carefully and never chase easy-appearing “hacks.”

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Summary for Non-Listeners

This episode informs listeners about the ripple effects of a long-awaited Federal Reserve rate cut—offering cautious optimism for mortgage rates and the stock market—before Wes Moss answers a variety of listener questions, ranging from optimizing small business cash reserves to practicalities of retirement account rules and tackling the universal fear of running out of money in retirement. The guidance emphasizes vigilance with financial institutions, the value of automatic investments, the dangers of seeking shortcuts, and, most fundamentally, the power of clear, ongoing financial planning.

Transcript

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[Krista Dibiaz]

Welcome to Ask An Advisor. Where we here at Team Clark go deeper on all things money and investing. I'm Krista Dibiaz here with Wes Moss. Hi Krista, how are you today?

[Wes Moss]

Good, very good.

[Krista Dibiaz]

And so the Fed, big news headliner, finally cut rates last week and you're going to talk about how that's going to affect us and especially things like mortgage rates, what they're thinking for sure. And then what is everyone's biggest fear around retirement?

[Wes Moss]

Yeah, I got a question at a presentation the other day about what keeps you up at night. So I'm going to discuss, discuss where that conversation went.

[Krista Dibiaz]

Okay. And then of course, we'll get to your questions. If you have a question for Wes or for Clark, you can go to clark.com ask so we'll start with the.

[Wes Moss]

Fed because this is the interest in the Fed ebbs and flows. There are periods of time, maybe, let's go back a couple years when rates were kind of at zero and they're staying put. The Fed tends to go in cycles. They'll get to a level they like and they'll stay put. And the meetings don't get a whole lot of fanfare because everybody already knows that they're just going to keep them where they were or are and there'll be these long periods of time where rates will just stay exactly the same. The interest goes up for all of us when they're starting to make a change. There was the big change was a couple years ago when we had inflation and rates were close to zero. Then the Fed went on this campaign where they were hiking interest rates almost every time they met. The question was how much are they going to hike and what is that going to do with mortgage rates? And I pulled a mortgage Chart because this really relates back to a lot of this has implications for home buyers. It has implications for anybody with loans. There was a loan I was reviewing with a family the day after the Fed cut and they said, well, my loan just went down by a quarter of a percent because their loan was tied to the short term rate, usually the short term rate plus 2% to 3%, but it's based on that short term rate. So a lot of people have credit or interest rates that are tied to the fed funds rate or the so far rate, which will move almost in line with the Fed rate. So low rates just means cheaper money for people, less interest. So it's a good thing for the most part. And there's always two sides of the coin. But if I look at this chart around mortgage rates and I go back to, let's go back to what I would call somewhat normal times. If you go back to November of 2018, we were in the 4.9 range for the 30 year fixed mortgage rate. And then we went on this long cycle, particularly after Covid hit in 2020, where the Fed dropped rates to literally to zero. And then that pulled every all other rates lower. And at one point In January of 2021, the average 30 year mortgage was 2.65%. And we had a really long period of time where it was right around that 3 range, a little lower than 3, a little higher than 3. And that was when the great lock in happens. The other thought here is I was in the same recent event that I did. There were a couple of different mortgage folks there and we started talking about the mortgage business. Well, let me fast forward in October of 2023. So about two years ago mortgage rates really peaked at almost, it's 7.79%. So it went from 3 to almost 8 in the course of just a couple of years. And I said, well, how's the mortgage business? And the answer was, honey, ain't nobody moving. And it's slow as molasses. Oh wow. I heard slow is molasses for a long time now. It has just recently started to pick up. And if I go to the last 30 year fixed mortgage rate is 6.13. So that's still pretty high relative to locking in a rate at 3%. But compared to when we almost got to 8% two years ago, now we're down to 6.1 and the Fed just cut interest rates. So the question is, does that continue to go lower or was the mortgage rate just in anticipation, knowing that rates were probably going to Start coming down. And that's the question mark. The reality here is that higher rates have really almost. If you're in the mortgage business, it's been tough in the last couple of years. If you have a 3% mortgage, you're not moving, you're locked in, and you have very little motivation to start looking for houses and trade in your 3% mortgage for a 6% mortgage. I think we'll see real activity if it can creep just below 6. That's a psychological level. But the tug and the pull and the difficulty around what the Fed's trying to figure out, and I think of it as almost just this barometer of where the risk lies. And it's only two things. The Federal Reserve cares about maximum employment, and they care about price stability, which is inflation. And they always want to balance those two. They want high employment and moderate to low inflation at 2%. The problem with, with where the Fed is right now, and that's why there's such intrigue around these meetings, what are they going to do? What are they going to do is that they don't have a clear picture of which is a bigger risk. Inflation going back up, that's a risk. Jobs slowing down too much, that's a risk. So if you were to look at the balance on if the needle of the speedometer is all the way to inflation, we know we've got to increase rates. If the needle is all the way over to the risk of a slow job market or a worsening job market, then we know we need to cut rates. The needle is right in the middle because there's still this risk. Inflation's still right around 3%, which is considerably higher than the 2% level the Fed wants. And job creation has slowed dramatically. We've only seen about, on average, over the last quarter, 29,000 new jobs added. That's super slow relative to the 150,000 per month that we were getting used to. So they really had to thread the needle here. And essentially what Chairman Powell said is that, look, we've got risk to the downside in the job market, and that seems to be slightly bigger of a risk than more inflation. And that's why they cut rates. So that's the reality of where we are right now. They're trying to take a cautious approach to making sure that the job market doesn't get too weak that we've seen weaken. It's still not weak. 4.3% unemployment, still relative, very low. But here's what the stock market does. So. So, number one, it Means for, for or all of us, if we have credit tied to the fed funds rate, which a lot of people do, whether it's mortgage related, business loan related, credit card related, in some cases, not in all cases, you're gonna see a little bit of relief. Not a whole lot. A quarter of a point is not that much, but it's not nothing. The second implication is for investors what happens to the stock market? And we went back and pulled data around. How does the market act when, when the Fed cuts, when the market is already at a really close to an all time high. So we looked at instances from Fed rate cuts since 1980. There were looking at periods when the stock market was, was within 2% of an all time high and the Fed cut rates. And that has happened, Krista, 20 times since 1980. 19 of those 20 times a year later the stock market was higher. Hmm, interesting, isn't it? That is so 95% of the time over since 1980. So we're going back 40 plus years. You've seen a 95% historical data that shows markets are up on average 12 months later to the tune of an average of 12.9%. So the second implication here is what does that mean for stock market investors? Companies like lower rates, particularly smaller companies that have to pay on loans that are tied to the federal funds rate. Federal fund rate comes down better for a lot of different sectors and particularly smaller companies. Which stands to reason it makes sense that you've seen stocks actually do well. So at least that's where we are today. The Fed is still trying to thread the needle. They don't know if they need to cut rates dramatically. That's why they just went 1/4 of 1%. They're cautious about the job market. But slightly lower interest rates usually on balance is a good thing for A investors, B, anyone that has any loans and C, if this trickles through to the mortgage market and we see the average 30 year fixed below 6%, I think we'll start to see some real housing activity.

[Krista Dibiaz]

All right. Okay, we are going to go to questions. Karen in Wisconsin sent this one. Dear Wes, My daughter Allison is a small business owner. She started her own photography company in 2019. Her husband does well financially and is able to support the family from his wages. Since 2019, aside from a few purchases for new equipment and regular business expenses, Allison has banked all of her profits in a business checking account that is accruing virtually no interest. What would be the best option for her in terms of a long term account that would Provide for growth. Their dream is to one day use the proceeds from her business to purchase their own wedding venue. Or are there business CDs, investment accounts or other options that would not have a huge implication on their taxes and yet allowed the capital to grow. Thank you. I love the new Ask an Advisor addition to the Clark Howard show.

[Wes Moss]

Dear Karen. Thank you, Karen. I love when people say dear.

[Krista Dibiaz]

I know.

[Wes Moss]

Dear. We live in a world where so many things are automated and you don't know if you're talking to a chat bot.

[Krista Dibiaz]

Clark does that a lot. He'll send me an email. Dear Krista really does that with people.

[Wes Moss]

Yeah. Does he do that as a funny thing or.

[Krista Dibiaz]

No, he really does it with people. No, he just likes to say that. Like when he's writing you a letter. Yeah.

[Wes Moss]

Dear Krista, I would think I'm getting in trouble.

[Krista Dibiaz]

Dear Krista, not with Clark.

[Wes Moss]

You know, Clark, I still. Maybe I'm going to start doing dear. I usually do hi. I would say hi Wes or hi Karen. But I love when people say dear Karen. Dear Karen, first of all, I always get so excited about when I hear your daughter Allison, who started a business. I love hearing those stories because there's so many positives. I think now it's tougher to do and it's scary to have your own business. But there's a lot that can come out of it. Number one, Allison, I'm sure she probably already has done this or if she hasn't, she should treat this as a real business. Make sure she opens up an llc. I don't know if it's Allie's Digital Photography or whatever the name is, but she needs this in an llc. And then that llc, the bank accounts that she opens can be in the name of the llc. It's not surprising that the business account you have is a really low interest rate. You would think you get some perks because it's a business account. It's almost the opposite. It's almost as though you get penalized because it's a business account. So what you typically will do as a small business owner is have your business operational checking account. And you keep just enough in that account because it's usually paying very little to no interest, just enough to cover your expenses, enough cushion to be able to pay the bills. Secondly, above that, and maybe that number is $5,000 or maybe it's $10,000, but above that for Allison, she can now have a side by side high yield checking account that should have an interest rate that's commensurate with a normal retail checking rate. You shouldn't be penalized in a High Yield savings account just because it's business, but it requires more work. Remember, banks count on us being lazy or not paying attention every second of the day. And, and they love when people have a whole bunch of money just sitting around in their accounts that don't pay anything. They love that. So you have to be vigilant about this and make sure that money is going into the high yield savings account for at least some interest. Now beyond that, if we're starting to think about bigger plans like a wedding venue. Love, love this idea. Depending on how much revenue Allison is going to be able to generate, if it's plenty of. And the other thought here is that the business account will allow make it easier for you to have expenses relative to your income and you really create your own P and L and your own balance sheet so that you're not paying taxes on the things you were able to expense. So there's more. There's some tax efficiency here as well. But if she finds herself with some big chunks of money that she doesn't need to take out at any time right away, then maybe that can be invested in some sort of balanced account that is for the potential for a big purchase like a wedding venue five years down the road, seven years down the road. And that could be something as simple as a balanced mutual fund that has stocks and bonds. I wouldn't do an aggressive account, but a really a nice balanced account for money that you don't need to use right away. It's you maybe have a long horizon of five to seven years or even longer. You can really get some capital appreciation there as well. So I think there's a lot of things to think about. Just know that banks want you to have a bunch of money in the checking side of the ledger so they don't pay you any interest. Put as much as you can in High Yield Savings and then if there's some real money there, invest at least some of it for a big purchase in the future.

[Krista Dibiaz]

Okay. John in Rhode island says, when my stocks offer dividends, I take the cash accumulated and usually buy another kind of stock or invest in stocks that I like. Am I better off doing that or taking the dividends from each particular stock and putting it back into that stock? What should I do, John?

[Wes Moss]

One word answer. Automatic, automatic reinvest. Automatic dividend reinvest. Now, I'm going to couch that by saying what. What John is doing is also a great method.

[Krista Dibiaz]

Okay.

[Wes Moss]

Because let's Say you have a handful of stocks and you're getting dividends regularly or every quarter from all of your different individual holdings or ETFs that are also paying dividends. Being able to see the money come in as cash, which is what happens when a dividend gets paid. You have cash shows up in your account. Then being able to make the choice of buying the same stock. Or maybe you want to be buying some other sector that helps rebalance the account by putting cash to work in other areas without having to sell because you're not putting new money to work. That's not a bad strategy at all. And in fact, when someone is in retirement, it's pretty typical to not be on dividend reinvest because A you're either using that cash or B you want to use that as a rebalancing tool. So it's a totally fine methodology that you're doing. However, if I had to choose one, John, the easier and frictionless we can make investing, which is already kind of a full time job or a full time sport, usually the better. So that if I had to choose one of the ways to do it for you, I would say automatic reinvest. Because the day you get cash is the day you get more shares or purchase more shares. And over time it eliminates those periods where maybe you didn't think about it for a month or you're away for two weeks and you're playing catch up and you forget to do the dividend reinvest. This takes that worry off the table and you can always rebalance in another way. So the easy answer here is automatic. What you're doing, John, is still totally fine. Automatic makes it potentially a little easier.

[Krista Dibiaz]

All right. And Michelle in Oregon says, can we talk about the details of the backdoor Roth? My husband and I are usually right on the edge of the line of our Roth IRA income limits. We've continued monthly contributions, hoping to stay under the threshold. But for the past two years, we've had to recharacterize to a traditional IRA and then convert via the backdoor Roth. That process leaves us with gains over the contribution limit, which we then have to roll over to our 401. Ks are taxable in retirement. If we contribute monthly to a traditional IRA instead, we still face the same issue. Any gains before the backdoor conversion would either stay in the traditional IRA or roll into the 401. I've considered monthly backdoor conversions to keep the gains tax free in the Roth, but that sounds like a logistical hassle. Contributing once A year. And converting right away is another option. But then we lose out on dollar cost averaging. I'd love your insight on the best strategy. Thanks so much, Michelle.

[Wes Moss]

This is. Let me just try to frame the question here for people that didn't get all of that, because what Michelle is doing, and Michelle, first of all, you're very on it, which is 95% of the battle. Yes, Michelle is right at the limit, her and her husband on being able to make a Roth contribution or not. So she's making the Roth contribution. It's, let's say she didn't say what age she is, but let's say $7,000 per year. And then by the end of the year her income is making her. So she can't do the Roth. So she's having to take that seven and put it into. Recharacterize it into a regular Iraq. The problem she's running into is that there's some growth, Maybe isn't just seven, it's now 7,500. And she can still only back to a Roth seven of the 7,500. So she's saying, what should I be doing here? Well, there's this $500 left over 7 in the Roth, recharacterized to the IRA, then backdoored back into a Roth, but she could only do seven. What do you do with the other 500? You're rolling that back into a 401k. That also helps get rid of the pro rata rule. If most of your other money or all of your other retirement money is 401k, you can not worry about the pro rata rule here. But I would also say this is one of those good problems to have. And you're using the rule to its fullest. All you can do is the 7,000, so you're getting the full benefit. And it's not as though the rule's not working. It's just that you're using the rule with the $7,000 to its maximum. So it's not the worst problem to have. And think about what you're left with. You end up with a seven in a Roth. And the gain that you had throughout the year, well, that's now growing in the 401k. My answer to really to try to make this easier is your suggestion, which is just do it all at one time. So make your contribution of 7, recharacterize it the next day, and then it gets to grow inside of the Roth forever, essentially. That may be the only simpler way or the way to simplify it. But you're kind of running into a good problem because you're already maxing out this rule. And John Bogle from Vanguard, John Bogle says the enemy of a good plan, which you have, is the dream of a perfect plan. And you're trying to make this totally perfect. I think you're taking the good all the way, as good as you can make it. And it's not the end of the world. But at least that's a discussion around what I think you're doing.

[Krista Dibiaz]

Great. All right. And coming up straight ahead, we'll have more questions for you, Wes, and you're going to talk about our biggest fear in retirement.

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[Wes Moss]

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[Krista Dibiaz]

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[Wes Moss]

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[Krista Dibiaz]

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[Wes Moss]

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[Krista Dibiaz]

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[Wes Moss]

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[Krista Dibiaz]

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[Wes Moss]

To Ask an Advisor on the Clark Howard Show. Wes Moss here to answer your questions along with Krista Dibiaz. And we're already onto our next topic. The story here is that I was at an event recently talking about the economy, talking about markets, talking about some of my research for the retire sooner method. And one of the questions from the audience, it was someone that I've known for a long time who was there. His name was Mike. And Mike said, well, what keeps you guys up at night? What's your biggest fear? Is it something out of the blue like a war or another sudden announcement that changes the economy? Like what? We saw the turmoil around tariffs, which the stock market has now certainly settled in and kind of accepted that. But what's around the corner? Corner? Are we worried about government debt that keeps going up? At what point does that start to create a real issue? And it was actually not just the first question. There was a couple questions around what is next? What keeps you up at night? And the reality here is that the real question in how I responded to this is that what people are really worried about in America is, is not the next headline and not the next event that we have to go through. It is what the next headline or the event that we go through does to the stock market and does to their portfolio, your portfolio. So really the root of any time you're you're asking that question, the root is worry. And what is that worry? It's running out of money. It's having my portfolio be damaged to the point where I can't pay for the lifestyle I would like in retirement. So that is the real question that is the root of any financial worry. Question is, could the next event or headline then do something to my portfolio, your portfolio, that makes you not be able to pay the bills? And when I do research on challenges Fears. What makes people happy in retirement? What scares people in retirement? The numbers are really striking. Almost half of all America, across all different savings levels, it's almost 50% of people. One of their top three worries is the phrase running out of money in retirement. That's the real worry and the fear. It's not the headline, it's that what the headlines can do over time. So I want to just first of all acknowledge that's the real fear. Any worry question kind of is rooted in that. And even when we have higher asset levels and as you can imagine, the fear of running out of money goes down. As your asset levels go up, it still stays, in my opinion, super high. People between 100,000 and a million or almost a million, 51%. If you're 100 to 500K, 51%, 500 to a million, 45% people with a million to 2.9 million, 39% of those folks are still worried about running out of money. And even the 3 million plus category, one in four people are still worried about running out. So it doesn't necessarily get solved. It helps as your asset levels go up, of course, but it doesn't cure it completely. And when you still have almost a quarter of what I would call ultra savers, ultra wealthy individuals, there's still some other problem. Well, here's the first problem. It's inflation. If you take a chart and you look at the consumer purchasing power, it's called the US Dollar purchasing power. You can track this and you go back to the year 2000. So we're going back about 25 years since the year 2000. This is a one directional chart. The purchasing and it's lower. The purchasing power of our US consumer dollar is down 47% from January of 2000 to August of 2025. So that's one of the fears. My dollar is not. If I don't invest my money, then I automatically in 25 years have half the money I used to have because my dollar has half the power it had 25 years ago. And that is a one directional chart that is virtually constant. So that's one of the fears, that there's nothing we can do about it. The Federal Reserve likes inflation. They just don't want high inflation. It's baked into the DNA and the formula of the US economy. It's happening. I think that beyond the level of savings, and we know that the fear doesn't go away really almost at any level of savings, unless maybe you're a billionaire, you're not worried about ever Running out of money. You can almost do whatever and still not run out of money. But for 99.9% of Americans, even when they are wealthy, there's still this fear is creeping in. So to me, it's not necessarily just a number solution of taking away that fear. It is a planning solution and it is a clarity versus fuzziness solution. And if you have clarity, you start to sleep better at night. So if you start to, if you do any sort of planning, whether I, I think we've talked about it here, but you can draw out a timeline on a piece of paper of where you are today, the assets you have, how much you're saving. Give it a 5% low rate of return over the next 10, 15, 20 years, and you will know with a high degree of confidence what you should have. At a minimum, then you take 4% of that and that's your income plus Social Security and a pension. And in 15 to 20 years, you should have a pretty good idea of what your income should be. And if your rich ratio is one or above your in great shape, and the rich ratio is just your have divided by your need. I have this much money coming in every month and I need this much to live on. 10 coming in, 8 going out. My rich ratio is 1.2. I'm rich. If it's the other way around, 8 coming in, 10 going out, rich ratio is under 1. And then you're worried, and there's no way not to worry about that. So you can do a simple timeline plan. You can calculate your rich ratio as quickly and easily as I just talked about, or you can do a comprehensive plan. Whether you do it on your own or you sit down with a financial advisor to do that, that brings this giant moment of clarity. And that clarity stops you from worrying about running out of money. And the interesting thing about it is that you get clear. And I know these meetings where you, once you go through financials and projections, people get this sense of relief. Oh, okay, I understand. I got it, I got it. And then over the course of the next year, the headlines come in and they nudge you and they kick you and they scare you. And then your clarity gets a little fuzzier and a little fuzzier. And over the course of six months or a year, you start to say, wait a minute, what was my plan again? You need to revisit it to keep the clarity. And that clarity is the antidote to not worry about running out of money. Sleeping well at night, as simple as it sounds, sounds is it's an ongoing process and it's so important and I.

[Krista Dibiaz]

Would think, you know, it's going back to the beginning when you said this question was asked of you and I guess some, probably some other advisors. Right. What keeps you up at night? Yeah, I mean the idea of the headlines would keep me up only because it would mean I'm going to get all these calls. I'm sure you guys deal with like really worried clients who are like, oh my gosh, I'm panicking.

[Wes Moss]

There's so much to worry about.

[Krista Dibiaz]

Yeah.

[Wes Moss]

You could never.

[Krista Dibiaz]

Have you ever been like on a vacation and something big happens and it's.

[Wes Moss]

Just I've never not, I've never been on occasion vacation where that doesn't happen.

[Krista Dibiaz]

Really?

[Wes Moss]

Never ever, ever. Because something's always happening.

[Krista Dibiaz]

Right. Okay. Jeffrey in Virginia says, I am a Clarky going way back, having opened my Roth IRA in the late 1990s at Clark's insistence. I'm retiring this year and want to keep my contributing to my Roth ira. I max out the amount every year. My spouse and I file taxes. Married, filing jointly. My spouse will have W2 income for the foreseeable future. Due to this income. The IRS joint filing can I just contribute the yearly max to my Roth IRA going forward assuming my spouse has sufficient W2 income and call it a day, or will I need to have a part time W2 job to cover my contribution limit?

[Wes Moss]

The simple answer here is spousal IRA allows you to do this. The spousal income spousal contribution allows you, Jeff, to be able to do this. So I think of it in two phases. Usually you've got your last year of work and you may have worked three months or six months of that year. So you do have income that year and you can make your contribution because your own income has exceeded the 7,000 or $8,000 and you can make your contribution. But let's say you have stopped and you now have no more wage income, which I think is really the heart of your question. As long as your wife is working and she's making enough to cover both of you, you can both do the full contribution. So if she's making 25 grand, that's more than enough for you both to put in the $8,000 so the spouse and that can continue for as many years. But the key, if you're married filing jointly, as long as one of the two spouses is earning enough, you absolutely can keep doing it.

[Krista Dibiaz]

Now I've only heard that question in the past where somebody with one parent staying home With a child maybe. And so it's interesting to think about it in retirement. I've never heard it in this context, you know.

[Wes Moss]

Right. Husband and wife don't always retire at the same time.

[Krista Dibiaz]

Jason in Florida says, I read your article on 72T withdrawals from an IRA. I'm 55, currently unemployed and looking for the next job. I'm wondering if I can set up an IRA withdrawal using 72T. Then if and when I get a new job, I'm allowed to still contribute to a 401k. If yes, I would hopefully no longer need the payments and would just maximize my 401k contributions by the same amount I've always contributed at least to the match in case it's relevant. I have plenty of money in the ira. Over a million. Thank you for what you and your team have done over over the years, Jason.

[Wes Moss]

I think you're going to end up with your match contributing up to the match, up to the max. Because the answer is that yes, you can do this. So let's assume that you're going to be unemployed for a little while and you really need, you need to do 72T. Let's just assume that. And the 72T says you can set up these substantially equal periodic payments from the ira. The rule is you've got to do it for at least five years or hit age 59 and a half, whichever is longer. So once you turn it it on, you've got to keep doing it for that period of time. But let's say in six months or a year from now, you've got another great job and you're making plenty of money and you really don't need those 72T payments. So you're creating income through the payments. But in the past you may have only done up to the match. Now you do up to the max and you fully max out your 401k. And I would contend, I don't know exactly what those your periodic payments would be, but you end up with your payments coming in and then a whole bunch of money going into the 401k all pre tax. So you keep your, you're in one case raising your income in another way. You're lowering your income because of the 401k contribution. I think the other thing I would think of here is I don't know if you would want to do your entire 400 IRA and set that up under the 72T. You may want to do a portion of it because you may not want the full, full weight of the substantially equal periodic payments from the entire amount. You can set up an IRA that does that in a so that your payments are at least manageable. Maybe just enough to cover until you start getting a new job and then you start maxing out.

[Krista Dibiaz]

Great. Jonah in Florida says my question is regarding income producing ETFs. Now that there are several large options. Example QQQY. It seems like this is a hack for retirement income. What am I missing? I understand some of the larger paying options will lose value over time after the payout, but you still get paid double or triple in the next couple of years prior to losing value, which if reinvested would still produce the income. Why does this have a too good to be true vibe? I invested a small portion of my portfolio less than 5% in this kind of ETF and it has been steady above 8 to 10 a year paid monthly. And much larger than where I keep my emergency fund which only pays around 4% a year paid monthly. Is it time to put all my eggs in the high paying basket?

[Wes Moss]

Whoa, whoa, whoa. No, no, no. This was from.

[Krista Dibiaz]

This is from Jonah.

[Wes Moss]

Dear Jonah, I would say no. The ones that we can, we rarely use. Never or always when it comes to financial planning. But you never want to hone in on just one thing almost. It's pretty safe to say that particularly something when you're getting the whiff of too good to be true. Just because these investments have worked over the last few years doesn't mean they'll always work. These are not income producing investments even though they're producing income, meaning that they're not paying you interest, they're not paying you dividends, they're paying you option premium that you're getting. These are zero DTE option ETFs, zero day to expiration, meaning that this is a trading strategy for stocks. And I think you mentioned what was the first one was QQQY or something. Again, full disclosure, I do not invest in these. So. But I've looked at these because they do seem really good. They're paying out lots of income. At the same time you also see their net asset value go down and down and down. But to your point, the option premium is paying you more than the NAV is going down. But this is a trading strategy and it doesn't mean it'll always work. And I think part of it is that the underlying assets. We've had some pretty good years in stocks. I don't know how well these would do when we are faced with a really tough market cycle. I just don't know how they'll do. So anything that seems like it's the easy button for 10% a year. There are no guarantees around anything like that whatsoever. So just because they've worked and they look like income doesn't mean they're always work. And this is technically, in my opinion, not an income oriented product. So limit your exposure, limit your risk. Just be really careful here.

[Krista Dibiaz]

Okay. Well, that does it for us. Today on Ask an Advisor. Thank you so much for staying with us. Hope that you'll share this episode with a friend or someone you think could benefit from us. And we'll be back next week next week with a brand new episode. And Clark is back in the saddle tomorrow.