The Clark Howard Podcast

Episode: 11.04.2025 — Ask An Advisor With Wes Moss
Date: November 4, 2025
Host: Clark Howard’s Team (with Wes Moss & Krista DiBiaz)
Episode Theme:
A deep-dive into high-impact financial topics with money expert Wes Moss, including the concentration of AI stocks in the S&P 500, Social Security’s COLA increases, and listener Q&A on ESPPs, retirement goals, Roth conversions, safe growth options, withdrawal rates, and more. Practical, data-driven advice is delivered with a conversational, approachable tone.

Main Theme & Purpose

This episode explores key current trends in the stock market (with a focus on AI-driven stocks), the mechanics and history of Social Security COLA increases, and provides expert answers to pressing financial questions from listeners. Wes Moss, joined by Krista DiBiaz, emphasizes the importance of diversification, cautious optimism in the face of market "overweights," and practical, nuanced responses to real-life retirement and investment challenges.

Key Discussion Points and Insights

1. The AI Overweight in the S&P 500

[00:46 - 07:10]

• Market Concentration in AI:

  • Wes highlights new JP Morgan research: 41 AI-related stocks (8% of S&P 500 constituent companies) now make up 47% of the S&P 500’s weighting—nearly half the index.

  • These 41 stocks have contributed about 74% of the S&P 500’s returns in the last 3 years.

  • Example top performers: Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, plus unexpected sectors (utilities, capital equipment companies).

  • The rest of the S&P 500 (459 companies) returned much less: up ~27% vs. 190% for the AI group.

  • Recent years have seen this effect intensify:

    "495 is up less than 1% since last November. The drivers, even though it's been over the last three years, it's really even been more exacerbated over the past one year." — Wes Moss [03:49]

  • Market weighting toward mega-cap AI stocks is historically typical, but the magnitude of returns is what’s notable.

• Implications for Investors:

  • Owning the S&P 500 means you're already about halfway invested in one (AI) theme.

  • Diversification and regular rebalancing are crucial. Consider equal-weight ETFs, small/mid-cap exposure, international stocks, and traditional safety assets like Treasuries or high-quality bonds.

  • AI may continue to drive returns, but the foundation remains narrow and could be risky if over-relied on.

    "Does the AI boom have legs? Yeah, it may very well continue for some time, but it has pretty skinny legs that's holding it up. There's a lot of weight of that." — Wes Moss [06:32]

2. Listener Q&A: Real-Life Money Decisions

[07:16 - 34:55]

a. ESPPs & Company Stock**

[07:16 - 10:47]

• Key Considerations:

  • Buy only if you believe in your company’s long-term prospects.

  • Discounts (10-15%) give a real advantage; potential for steeper discounts if stocks rise during purchase window.

  • Evaluate holding period requirements—different rules for public vs. private companies.

  • Over-concentration risk: avoid having more than ~10% of your portfolio in one company’s stock (per Clark’s longstanding advice).

    "Be careful about ending up with 3/4 of your portfolio is this one company stock. That's something to really be careful about." — Wes Moss [10:31]

b. Retirement Goalposts — $1 Million Rule

[10:47 - 13:19]

• Household vs Individual Goal:

  • $1 million is recommended as “household investable assets,” regardless of single or couple status. Single savers face higher proportional challenges due to fixed household costs.

  • Lifestyle, geography, and spending needs matter, but the million-dollar marker is a strong target for a sound retirement.

    "Many hands make light work. Now, yes, you may have to have two cards...But the number really should still be a million, even if it's just you." — Wes Moss [12:15]

c. Roth Conversion for Inheritance

[13:19 - 16:14]

• When Does a Roth Conversion Make Sense?

  • Lower-tax-bracket parents can convert traditional 401(k)s to Roth IRAs for inheritance efficiency.

  • However, only do this if the parent is financially secure for the remainder of their lifetime.

  • Should be decided as a family, ideally with professional fiduciary advice. Rarely do parents want to pay the taxes upfront solely to benefit heirs.

    "Once in a while, a family will say, I really don't think I'm gonna need this money... and I would like to pay the taxes today for my kids. That's like one out of about 100." — Wes Moss [15:12]

d. Social Security COLA: History and Reality

[17:35 - 24:19]

• Current COLA:

  • 2.8% cost-of-living adjustment for 2026, averaging ~$56/month more for recipients.

• Historical Perspective:

  • COLA legislation passed in 1972—started in 1975.

  • Average annual COLA has been 3.7% since inception; 2.6% over the last 20 years.

  • Periods of high/low adjustments mirror inflation patterns. Ex: 14% COLA in early 80s, 8.7% in 2023.

  • Social Security has generally kept up with inflation, contrary to public skepticism.

    "Social Security, I would say, gets a bad rap, but it has quietly been one of America's best inflation fighters..." — Wes Moss [17:35]
    "Over time since 1975, the average COLA increase has been 3.7%. So almost 4% per year." — Wes Moss [19:54]

• Fears About Social Security “Running Out”:

  • The trust fund's projected depletion (approx. 2032) means the cushion is gone—but not the system.

  • FICA tax inflows would still cover 75-80% of stated benefits.

  • Congress likely to implement tweaks (retirement age, tax base) before any true shortfall occurs; those 50+ today unlikely to face major changes.

    "I think that's a worst case scenario. Social Security goes down by 20 or 25%. Now that's a big number. The reason I don't think that anybody over the age of 50 has to worry about that..." — Wes Moss [22:38]

e. Safe "Fun Money" Growth Options

[24:19 - 27:58]

• Short-term Money = No Market Risk:

  • Don’t invest vacation/short-term funds in stocks—stick to high-yield savings accounts (HYSA) or other low-volatility, liquid products.

  • Markets are volatile; play money can easily become un-fun if markets drop right before you need the cash.

  • "Fun" or "play" accounts rarely move the needle; discipline and diversification are key for real investment success.

    "When it comes to fun accounts...the minute we go into a bear market...your fun account becomes really unfun. So just remember, this is a serious sport." — Wes Moss [26:30]

f. Retirement Bridge Accounts for Early Retirees

[27:58 - 30:34]

• Key Strategies:

  • For those retiring early (e.g., teachers, public employees), open a taxable brokerage to bridge between pension/retirement age and penalty-free withdrawals.

  • Maintain aggressive Roth allocation as it’s long-horizon money.

  • Brokerage/bridge account should be invested more conservatively.

  • Consider IRS "rule of 55" or 72(t) for penalty-free access if needed.

    "I would usually have your Roth be your more aggressive account because that's your longest term money. You absolutely are right. You do want a brokerage account because you want to bridge the gap before you get to 59 and a half." — Wes Moss [29:16]

g. Withdrawal Rates (“4% Rule”) for Early Retirement

[30:34 - 34:55]

• Practical Math:

  • 4% withdrawal is a starting guide; 5-6% is risky for long periods, especially pre-Social Security.

  • Taxes must be considered—gross withdrawal needs may be higher.

  • Part-time work, even modest, can meaningfully reduce withdrawal pressure and enhance portfolio longevity.

  • Withdrawal rate flexibility and bridging “gap years” are key.

    "It's totally cool and I appreciate it—that's what the rule is about...maxing out what you can take out from your investments without running out." — Wes Moss [31:33]
    "Every year that you're able to work does matter because it gets you closer to when Social Security kicks in and that makes it easier to reduce your withdrawal rate." — Wes Moss [33:10]

Notable Quotes & Memorable Moments

• On market concentration:

  "It's a pretty short list [of stocks], and it makes up about half of the S&P 500. That little group has made up almost 75% of the returns over the past three years."
  — Wes Moss [02:20]

• On Social Security’s inflation defense:

  "Social Security really does keep up with the cost of living."
  — Wes Moss [18:22]

• On investment buckets:

  "Investing is a serious sport. It's hard, takes discipline, takes time. And rarely have I ever seen a fun account really make a meaningful difference."
  — Wes Moss [26:30]

• On retirement withdrawal rates:

  "So think about that four, four and a quarter withdrawal rate as your home base. It is not the end of the world to go above that...You just can't...for a really long period of time."
  — Wes Moss [33:23]

Timestamps for Key Segments

• AI Stocks’ Market Dominance & Implications: 00:46 – 07:10
• Listener Q&A (Including ESPP, $1 Million Goal, Roth Conversions): 07:16 – 16:14
• Social Security COLA & Trust Fund Questions: 17:35 – 24:19
• Safe Growth for Short-Term Spending: 24:19 – 27:58
• Retirement Bridge and Early Withdrawals: 27:58 – 30:34
• Withdrawal Rates & Managing Early Retirement: 30:34 – 34:55

Conclusion

This Clark Howard episode with Wes Moss provides a grounded, analytical, and candid look at evolving financial landscapes and everyday money questions. The hosts balance hard data (especially around market trends and Social Security) with practical advice for real people—a hallmark of Team Clark’s approach.
Listeners will walk away with reinforced fundamentals: diversify, avoid over-concentration (especially in hot themes like AI), plan withdrawal strategies carefully, don’t conflate short- and long-term money, and demystify media’s scare tactics about Social Security. The episode is equal parts cautionary, optimistic, and actionable—true to the show’s consumer-first mission.