The Clark Howard Podcast: Ask An Advisor with Wes Moss

Episode Date: October 7, 2025
Host: Wes Moss (with Krista)
Theme: Exploring the cost of the American Dream, the impact of inflation on investing, and real-world financial questions from listeners.

Episode Overview

This episode of “Ask An Advisor” features Wes Moss and Krista digging into big headline topics like the true cost of the American Dream, the nuanced relationship between inflation and the stock market, and practical, listener-driven financial advice. Wes presents research-backed perspectives while maintaining an accessible, encouraging tone.

Key Topics & Insights

1. Inflation and its Relationship with the Stock Market

[01:47–08:16]

• Simplistic View vs. Reality: "Is inflation good or bad for the stock market? I thought, wow, that's such a simple question... It is pretty nuanced. There's not just a super easy answer."
  — Wes Moss, [01:47]
• Goldilocks Zone: The market historically performs best when inflation is "not too hot, not too cold," ideally in the 2% range (the so-called “Goldilocks zone”).
  • 0–2% inflation: Sweet spot for stocks, averaging about 14.2% returns.
  • 2–4%: Returns dip to just under market average (about 10%).
  • Over 4%: Returns drop further, to roughly 6%.
  • Deflation (below 0%): Rare, but stocks averaged 13% (small data set).
• Stock Types & Inflation:
  • High-inflation periods (e.g., 1973–1982, average of 9% inflation): Dividend stocks do relatively better (~11%/yr); growth stocks barely keep up (~2%/yr).
  • Low-inflation: Growth stocks outperform; investors chase future returns because bond yields are low.
• Current Status: "We're in the Goldilocks zone right now...under 3% for inflation. That's still a pretty decent environment in general for stock market."

2. Q&A: Listener Financial Advice

CFP Career Switch Advice

[08:19–12:49]

• Context: Jason (mid-career) wants to become a CFP.
• Industry Overview:
  • Aging demographic: "50% of all CFPs are over the age of 50. 40%...are supposed to retire by the year 2034." — Wes Moss, [10:07]
  • "There's even more of a need for financial advisors" despite accessible technology.
• Path to CFP:
  • 6,000 hours experience or 4,000-hour structured apprenticeship, four-year degree, tough exam.
  • Recommendation: Get a part-time or apprenticeship role in finance, even if only 10 hours/week, to build experience and ease exam process.
• Encouragement: "It's a hard road. We need you."

High-Yield Bond ETFs in a Portfolio

[12:49–15:53]

• Summary: High-yield bonds ("junk bonds" rebranded) can complement a portfolio but carry more risk.
  • "They are for more aggressive investors knowing that they have a lot of volatility...But you do get this 6.7% yield along the way." — Wes Moss, [15:40]
  • Use as a "satellite" position, not core holdings.
  • "They don't count as dry powder" (i.e., as the safest portfolio component).

Retirement Savings Benchmarks & Age Gap Spouses

[15:53–20:56]

• Chris’s Situation: Late start to saving, married couple with a 7-year age gap; confused by Fidelity's age-based savings benchmarks.
• Wes’s Advice:
  • "I would scrap that chart completely...What matters is what you need to spend in retirement." — Wes Moss, [17:38]
  • Use the "25x rule": Multiply desired annual spending by 25 for a target nest egg.
    • E.g., Needing $50k/year means a $1.25M goal.
  • With $250k at age 37 and saving $15k/year at 6% for 25 years, Chris could reach ~$1.9M.

3. The True Cost of the American Dream

[24:14–32:35]

• Investopedia’s Calculation: $5M needed over a lifetime (post-tax), equating to ~$7M gross income (~$160k/year over 45 years at a 30% tax rate).
  • Retirement savings: $1.6M
  • Health care: $414k
  • Homeownership: ~$1M
  • Raising kids & college: ~$875k
  • Cars: ~$900k (“Clark would have a heart attack on this one” — Wes Moss, [26:39])
  • Lifetime vacations, pets, wedding: Minor compared to the above
• Wes’s Take: Most agree with retirement and homeownership costs; retirement “green zone” starts at $1M, $1.6M is a solid but not extreme target.
• Reality Check:
  • “There’s a big difference between saving your way to the American dream and investing your way to the American dream.” — Wes Moss, [28:54]
  • Investing (with a 6% return) lowers needed annual savings significantly—to about $120k/year gross if investing, compared to $160k gross if just saving.
  • Retirement Income Example: $1.6M nest egg at 4.5% withdrawal = $72k/year, add Social Security or pension, “a lot of people in America can live on that.”
• Retirement Happiness: "Having your mortgage payoff within sight...adds to retirement happiness." (Wes’s forthcoming book), [32:35]

4. Practical Listener Questions

Life Insurance in Later Years

[33:05–36:34]

• Joe (58), spouse 55, grown kids, substantial assets, $1,900/yr for $200k policy.
• Advice: "Insurance has done its job" once dependents are grown and assets are sufficient, but Joe isn’t quite there yet. “$1,900 a year to protect that much...is still a low amount of money.” Keep the policy a few more years; shop for better rates.

529-to-Roth Transfers for Kids (SECURE 2.0)

[36:34–40:47]

• Steve’s Plan: Open 529s at kids’ births; later roll over to Roth IRAs using new $35k rollover provision.
• Wes’s Approval: “This is a very real rule. This isn’t just some loophole...Even $35k growing at 7% a year could be half a million dollars [for retirement].”
• Caveats: Must wait until account is 15 years old; funding 529 and using the “third, third, third” rule for college costs (parental aid, savings, student contribution/loans) is pragmatic.

Saving to Bump Up Lifestyle Before Retirement

[40:47–44:26]

• McKay (steady job, disposable income, kids): Seeks to balance enjoying today with lifestyle inflation and future savings; open to “more complex solutions.”
• Wes’s Strategy: Set up incremental/automatic increases in savings (e.g., 1% annual autopilot increases in 401k contributions), or establish a small brokerage auto-investment to “trick yourself” into long-term saving. “Start small today. If you do that for another 10, 15, 20 years...it could add up to more than you might think.”

Notable Quotes & Memorable Moments

• “We want Goldilocks inflation. Not too hot, not too cold...That’s the zone the stock market seems to like the most.”
  — Wes Moss, [02:09]
• "Financial planning is about making the complicated simple. And that chart makes it even more complicated."
  — Wes Moss, [17:38]
• "There's a big difference between saving your way to the American dream and investing your way to the American dream."
  — Wes Moss, [28:54]
• "Having your mortgage payoff within sight...adds to retirement happiness."
  — Wes Moss, [32:35]

Important Timestamps

• 01:47 — Is inflation good or bad for stocks?
• 08:16 — Listener questions begin (Jason’s CFP journey)
• 12:49 — High-yield bonds in a portfolio
• 15:53 — Retirement benchmarks (Chris in Washington)
• 24:14 — Cost of the American Dream (Investopedia study)
• 33:05 — Life insurance after kids are grown
• 36:34 — 529 plans and Roth IRA rollover for kids
• 40:47 — Bumping up lifestyle/lifestyle inflation with disposable income

Tone & Style

• Encouraging, data-driven, and practical.
• Wes and Krista provide plain-spoken, sometimes witty responses (e.g., “junk bonds” vs. “high yield” rebranding), always emphasizing real-world utility and psychological side of money decisions.
• Clear examples and calculations punctuate the advice, making complex issues accessible.

Takeaways

• For Investors: Moderate, “just right” inflation is ideal for stock returns. Beware of simplistic rules—context matters.
• For Career Changers: Financial advice desperately needs new blood; the journey to CFP is demanding but worthwhile.
• For Savers: Retirement charts are interesting but secondary to understanding your real-life needs; focus on the 25x rule and your specific desired retirement spending.
• For Families: Long-term planning (like 529-to-Roth rollovers) can give your kids remarkable head starts but don’t lose sight of the need to pay for current obligations (college, life insurance).
• For Everyone: Automate savings increases to painlessly grow your future security, and remember: the American Dream is costly, but strategic investing makes it far more achievable.

For further resources or to submit your questions, visit clark.com/askclark.