09.01.26 Ask An Advisor With Wes Moss

In this episode, Wes shares why retiring as soon as possible is more critical than most people realize. He highlights why waiting too long can cost you the best, most active years of your life, and explains how the Retire Sooner Method helps you shave years off your career so you can enjoy true freedom while you still have the energy to use it. Also, Wes tackles one of the biggest threats facing new retirees today: Sequence of Returns Risk. Even in a strong market, market downturns in the first few years of retirement can drastically alter your long-term wealth. Through a side-by-side example of two retirees with identical 5% average returns, Wes demonstrates how early negative returns during active withdrawals can leave one person with nearly a million dollars less than the other. You'll gain a clear understanding of why timing matters just as much as average returns, along with practical steps to adjust early withdrawal strategies and safeguard your nest egg against market volatility. Mentioned on the show: Understanding The Biggest Risk to New Retirees (Sequence of Return Risk) All this and more on the September 1, 2026, Ask an Advisor episode of the Clark Howard podcast. Submit your questions: WesMoss.com/ask Discover the research-backed path to a happier retirement – order The Retire Sooner Method by Wes Moss today at retiresoonermethod.com We hope you enjoy our weekly Ask An Advisor episodes. Let us know what you think in the comments! Learn more about Wes: BOOKS BY WES MOSS Wes Moss, CFP® Wes Moss - Clark.com Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:00Speaker 00

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• 0:30Speaker 01

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• 0:50Speaker 03

  Welcome to this week's Ask an Advisor. I'm Krista D. Vias here with Mr. Wes Moss, our advisor.

• 0:56Speaker 04

  You almost said, welcome back.

• 0:58Speaker 03

  I know. Well, it's welcome back.

• 1:00Speaker 04

  It is welcome back.

• 1:01Speaker 03

  We haven't been with you for a week. And today you're going to talk about why it's important to retire as soon as you can. This is actually kind of a hard topic.

• 1:09Speaker 04

  This is a, it's a deep topic.

• 1:11Speaker 03

  Yeah. And then also later, you've talked about all the all time highs in the stock market. We're at one right now. What does it mean if you retire? Like, so you have a certain amount of money when you retire. Does it matter if the stock market is higher and then happens to get lower over the same period of time or lower and gets higher over the same period?

• 1:30Speaker 04

  Sequence of returns.

• 1:32Speaker 03

  Sequence of returns.

• 1:33Speaker 04

  Risk is a big one.

• 1:34Speaker 03

  This is very interesting, but first I want to congratulate you. Look what I brought. Your book came out today, The Retire Sooner Method. Congrats. And now I'm going to buy it. You know why? I didn't want to say this because I know you wanted people to buy it in pre-sale, but I don't do that.

• 1:49Speaker 04

  I don't blame you.

• 1:50Speaker 03

  I need immediate gratification on my Kindle.

• 1:53Speaker 04

  I don't blame people, but I do, I'm very thankful for all the folks that did pre-orders. And today is the day actually of doing the masterclass for retire sooner method. But I totally get it. My kids were even asking me, why would anybody preorder a book when it takes two months before it actually gets to you?

• 2:11Speaker 03

  Right.

• 2:12Speaker 04

  Why would you do it? And that's why you've got to offer a bunch of other things in order to supplement that you get if you pre-ordered relative to the immediate gratification.

• 2:23Speaker 03

  Okay.

• 2:24Speaker 04

  Well, and that's why I'm doing the masterclass for the folks that did and the workbook, et cetera, et cetera.

• 2:28Speaker 03

  Well, now you can get it.

• 2:28Speaker 04

  It's ready to rock.

• 2:29Speaker 03

  Yep.

• 2:29Speaker 04

  And I'm very excited about it. And it's gotten me philosophical in it. That's why I wanted to talk about this topic because over the last couple of weeks, I've been doing a bunch of podcast interviews and you get to a stage after you do a book that takes, this process is like a six months of research and analysis, and then another year of writing and then editing. So you kind of almost forget the book that you wrote. And then the cool part is when you're starting to really talk about it, it kind of revives all of the things that you can be introspective about it and why you did it. And this also is coinciding a time in my life, and I know, I think a lot of our listeners, because I know a lot of Americans are going through this. If you are 50 and you're not 50 yet, Krista.

• 3:14Speaker 03

  Yes, I am.

• 3:15Speaker 04

  But.

• 3:15Speaker 03

  Over 50.

• 3:16Speaker 04

  You are, or 45 to 55 to 60, that big range. And I know we have a lot of viewers and listeners that are in that range. That means your parents, if they're still living, God willing, they're 75 or 80. And having that experience of being in my, now where I am in my parents' age and my wife's, my in-laws, her parents, it is really hard for things to all continue to go right. I met with a family the other day, he's 84, plays golf four times a week, still shoots in the low eighties. Shoots his age, which is like a miracle.

• 3:52Speaker 03

  I went to a birthday party for a 90 year old the other week who goes to the gym and lifts weights three times a week.

• 3:58Speaker 04

  And we hear those stories and we also hear about longevity risk. Well, my goodness, you've got to be scared of your money's going to last because you, you could live to your 95 or you could live to your 100. My great, great aunt lived to 100 on three generations over. You, we hear those stories all the time. It happens, but much more often, much, much more often, our retirement is way shorter than we want it to be. And that is just the harsh reality and I see it. We get sick, we have cognitive decline, we fall and we break something and then nothing's ever the same. My dad fell off his horse three months ago.

• 4:38Speaker 03

  No.

• 4:39Speaker 04

  I was sore the other, I missed a step and kind of landed awkwardly. Like my hip was killing me for three days. I'm 50. That happens at 75, you're, if you fall off a horse, now granted, you could make the argument, why are you riding a horse at that age? But things go wrong and retirement gets cut short way more often than it does not. It makes it hard. It is a hard journey because our kids are all doing other things. Our friendships are harder to maintain because people move away and they get sick and they get hurt. There's a lot of headwinds to have a happy retirement. And I've been studying happy retirees now for almost two decades because that's, I

• 5:19Speaker 04

  like to begin with the end in mind, data first, a chart second, the narrative third. And this book is the narrative of all that analysis, but what is feeding all that is the harsh reality that I'm facing as a sandwich generation kid, now an adult, that you're facing, that so many of us are facing is that we don't get, our parents and we don't get as much time, most of the time of those years that we think we're going to have all this freedom. So to me, yes, it's always been my, it's been my mission now for 20 years, helping families find happiness in retirement as soon as reasonably possible, because it's

• 6:01Speaker 04

  shorter for most people and the quality of our lives in retirement is shorter than we want it to be, or I would wish it to be for most, for a lot of people. And if you can shave a year or two or three or four years off, meaning that you can be, have financial freedom and stop working at 63 versus 65 or 62 versus 66, that matters a lot. That's an enormous amount of new years before hopefully retirement gets really, really hard. And that is, I think, my impetus for doing this research and writing about this. I want us to have as many of those years as we can. And that is the, kind of the driving force for me to do all this research.

• 6:44Speaker 04

  And that's, that's what drives the retire sooner method.

• 6:47Speaker 03

  Yeah. And I have to say, I did see this with my parents. My dad did retire relatively early and they did a lot of traveling. He actually started a second career as a real estate agent. They had a lot of very active years and then my father had a stroke a few years ago. My, my mother suffers from Alzheimer's and it's, it's tough, but I'm glad, I'm so grateful that they were able to enjoy all those years, not to be Debbie.

• 7:13Speaker 04

  Yeah, this is not meant to be a downer topic. This is meant to be that we can get a couple extra of those years where we're still healthy, fit, feel good enough to do travel. I want people to have that.

• 7:24Speaker 03

  Me too. Okay. SoCal Bernie in California says, hi Wes, I really enjoy your podcast. I'm looking forward to your new book. Our dream of retiring to Portugal was shattered when I discovered that they canceled their tax saving program for retirees. It was called the non-habitual resident or NHR. With a tax rate 40% for income over 81,000 euros, it's no longer an option. So the plan now is to move from California to Arizona and visit Portugal for 90 days each year. We have worked hard and saved all we could. Our nest egg is $2 million with most in traditional 401k, 25% in a brokerage account. We have two rental properties fully paid off worth another 1.5 million and will rent

• 8:07Speaker 03

  out our house to help pay the mortgage when we move to Arizona for five years while we go nomadic. My wife and I are 64 and I will retire in November. My question for you is that we are fully invested in the stock index and mutual funds, very diversified, but all stocks, domestic and international. My approach has been that the rental properties provide the balance and diversification similar to bonds. Principal is the value of the property and yield is the rent we get each month. Is this too risky? Do I need to diversify my $2 million into some percentage of bonds? Or can I keep it 100% stocks, given the fact that we have this 1.5 million in rental property?

• 8:47Speaker 04

  SoCal Bernie, my thought here is that maybe that's one, in California, it's probably not outrageous or probably normal to have a house that's at least a million and a half dollars. But it's probably a pretty nice house. And in the, the economy we live in, I know that in a lot of ways, it is this K shaped economy and not everybody's feeling this and not everybody has a million and a half dollar house in California they can rent out. But for those who do, that is a very stable asset when it comes to that level of being able to rent a place out like that. I would say on a million five in real estate, and I think SoCal Bernie said he would also be able to rent out his primary.

• 9:29Speaker 03

  While they're going nomadic, love that.

• 9:31Speaker 04

  So let's call that $2 million at least. It's probably more than that, but let's just say $2 million. I know we're talking California dollars, but even at a 5% cap rate, rental rate, that's a hundred grand and it's probably really steady and even, meaning that you have plenty of demand to be able to rent it out. And that's a hundred grand a year. Now you've got other costs. Let's say it ends up netting you $80,000 a year. That is like having, if I had $80,000 in bonds that were paying me 4%, that's like having $2 million in fixed income, 2 million.

• 10:11Speaker 04

  Which argues to your point, Bernie, that yeah, you've got $2 million in equities and $2 million in bond-like investments, but they're not quite bonds. And we're not talking US government treasuries here. We're talking an asset that should have very steady income, but something can happen and it can go away. You could have a flood or a fire or the toilet on the third floor could run over for a few hours and it's now you can't rent it. So it's not as safe as a fixed income portfolio, but it's similar. So it counts. The short answer is yes, it's very bond-like because it's producing steady income. I would think about maybe having at least though 10% of that $2 million

• 10:53Speaker 04

  in liquid dry powder because the home is not liquid. So you're on the right track, but even for my risk tolerance, but we all have different ways of thinking about this. I'd still want some liquidity in my overall investment portfolio, even if it's something like 10%.

• 11:09Speaker 03

  All right. Willie in Florida wrote in with this one. My son is 30, married, and he and his wife hope to start a family next year. They earn more than $200,000 a year and have no debt besides a mortgage at 6.5% and are maxing out their retirement accounts. In the next three to four years, they'd like to buy land and eventually build their dream home. My thought is they should split their extra cash between paying down the mortgage and building up high-yield savings account so they have liquidity if the right property comes along. Given their short time horizon, how would you balance paying down a 6.5% mortgage versus keeping cash available for their future home plans?

• 11:47Speaker 04

  Willie, the short answer is there are always these really good things that we should be doing, but they all compete with each other. You want to max out your 401K, they should be doing HSAs, they should be mega backdoor Roth if they can. They should be paying down their mortgages, be saving an after-tax account. They should be saving 529 plans for their kids. So the list of all the things we should be doing is really long and they're doing a bunch of them, but you can't, 99.9% of people can't do all of them, which means you've got to focus in on the goals that are most important. And buying land and/or owning land and building a house is a big deal and it takes a lot of capital and a lot of liquidity to be able to do it

• 12:31Speaker 04

  because you've got to put a big chunk of money down if you're going to do a project like that. So to me, if that's the goal, this is why planning is all about the main goal or a couple of goals to focus on because there are like 10 or 15 you should always do, but you can't always do all 15 or 10 or 15. So in this case, even though yes, it's great to pay down a high interest rate mortgage at 6.5% because they're already going to be moving in a couple of years in order to do this and you're likely not going to be able to, there may be some underlap when it comes to getting the equity out in order to build the new place, then paying down the mortgage doesn't unlock your equity all that quickly. So you are starved for liquid after-tax savings.

• 13:16Speaker 04

  So my priority here for your son, again, we're choosing here between really good things. I would be choosing to not pay down extra on the mortgage and make that money go into my liquid savings because he's going to need it.

• 13:30Speaker 03

  Okay. Stan in Virginia says, what do you think of 100% buffered ETFs like ZAUG as a replacement for a bond ETF? There's not much risk of loss unless the fund collapses totally.

• 13:43Speaker 04

  That sounds like a risk, Stan.

• 13:46Speaker 03

  There's no interest income that's easier on taxes.

• 13:49Speaker 04

  I don't want to comment on this exact ETF because I can't say you should go buy this or don't buy this or sell that, but let's talk about the category because they're very similar. And they are, they're the financial burritos we've talked about on the show. They're not, they're not necessarily all that bad and they, and they really do have a place. By the way, this is what Wall Street calls boomer candy.

• 14:12Speaker 03

  Oh.

• 14:13Speaker 04

  This is called boomer candy. And here's why they exist. They exist for a couple of reasons. One, bonds have been pretty lackluster for a while. Stocks have been really good. So people are saying, oh, why don't I just do all stocks and do no bonds? And Wall Street has introduced these hybrid products that try to give you protection, but also the market return, which in itself doesn't exist. But it exists a little bit and you're giving up in any one of these buffered ETFs, you're giving up upside in the market. So a lot of these, they're capped at 7% or 8% or 9% of the market upside. So if the market's up 22%, you still may only get your eight.

• 14:57Speaker 04

  And you say, well, that sounds like a pretty good deal to me. And they all have different parameters, some you have to hold for the entire year before that locks in. So there's a little nuance between all of these. And as I've thought about these more, and I've considered these, like I think, hmm. First of all, the reason it's also boomer candy ETF fees, Krista, I didn't make up the food analogy, it was Wall Street Journal. Is that ETF fees are, you think about a Vanguard ETF, they're less than 1/10 to 1% now.

• 15:28Speaker 03

  Yeah.

• 15:29Speaker 04

  They're like free, pretty much free, 0.01%. Well, guess what? That's great for us, great for you. It's not very good for Wall Street. Enter boomer candy, this hybrid product, this sounds amazing. I'm going to replace all my bonds with this. Guess what these cost? Closer to 1%.

• 15:47Speaker 03

  Oh, wow.

• 15:48Speaker 04

  So we've gone back to the old days of Wall Street where funds, ETFs are paying the firm a lot. No wonder Wall Street loves boomer candy. So I would not be replacing, and this is where I've come, I've thought about this now for a while. I wouldn't be replacing my bonds for these buffered ETFs that are stock oriented because there's no substitute for the high liquidity and high safety of, let's say, government bonds as an example. I would, on the other hand, consider using these as part of my stock allocation. That's where I've come down on this, meaning that it's a more conservative way to invest in stocks.

• 16:33Speaker 04

  So it's not a, in my opinion, not a bond replacement, but for a portion of your equities, if you want something to be a little more conservative, that's when I'd be looking at these.

• 16:43Speaker 03

  All right. We'll take a quick break and when we come back, sequence of return.

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• 19:03Speaker 04

  Welcome back to Ask an Advisor. I'm Wes Moss here on the Clark Howard Show with the Krista Dibas.

• 19:10Speaker 03

  Yeah, I don't know that you have to introduce me.

• 19:13Speaker 04

  I just, I know you don't love that. I'm just gonna keep doing it. We're talking sequence of return.

• 19:18Speaker 03

  We sure are.

• 19:19Speaker 04

  Okay, yes, 2026 has had now over two dozen all time highs. So the market's been great. We've talked about that. And that's not necessarily a bad thing over the next three, six, 12 months. We've looked at history and it's not necessarily, doesn't mean the market's about to fall off a cliff, at least historically. But what it brings up is the very real question and problem of sequence of return risk, which simply means that even you can have two different people that get the same exact rate of return over a 10 year period. One ends up with a lot of money and the other ends up with not nearly as much if they're withdrawing money. And I'm going to give you two examples here, just mathematically.

• 20:04Speaker 04

  We've got person A, we'll call this person Lloyd Christmas. Remember Lloyd Christmas?

• 20:08Speaker 03

  Dumb and dumber.

• 20:09Speaker 04

  Dumb and dumber. Kind of walks through life, bumping into things, but everything kind of turns out great for him. That's Lloyd Christmas. He's got $2 million. He takes out $90,000 a year, every single year for 10 years, but he gets a 5% average annual rate of return. So think about this, 90 grand is four and a half. So he's going to get a tiny bit more on average rate of return that he's taking out per year. Starts with 2 million, takes out 90K a year, gets a 5% average annual return over 10 years. Now, Lucky Larry, who's not so lucky, has the exact same setup, $2 million, going to take $90,000 a year out, and he's going to get a 5% annual return. What happens if their

• 20:53Speaker 04

  returns come over time in a very different manner? Well, Lloyd Christmas gets really good returns in the beginning and then ends up with some really bad returns over time. And I'll give you an example of what I'm talking about with these returns. As an example, Lloyd gets 28% the first year, then 22, then 18, 14, and it just goes down every single year. And by year 10, he's gotten negative eight, negative 12, negative 15. His $2 million is worth what? About 2.2 million. Remember, he took 90 grand a year out. So he took out $900,000, started with 2 million, ends up with 2.2, even after taking $900,000. And

• 21:35Speaker 04

  all we do is flip those returns, the sequence of when they come, still averaging 5% rate of return for Lucky, oh, it was Lucky Charlie. That's Lucky Charlie.

• 21:47Speaker 03

  You like the alliteration.

• 21:49Speaker 04

  Lucky Charlie, he starts out in year one, minus 15%. Then he gets minus 12, then he gets minus eight, minus five, zero, and then he gets plus eight, 14, plus 18, plus 22, plus 28. So he averaged 5% a year on average over that 10 year period of time. But he was taking money out. So what happened in those early years is that he's pulled money out. So there's, there's always this deficit, but then the market is going down. So the hole gets bigger. How much does Lucky Charlie left with at the end? He's left with 1.3 million. It's a $900,000 difference between those two. Lloyd Christmas kind of walked

• 22:32Speaker 04

  in, the market was good the first couple of years of retirement, and he ended up totally fine. Same rate of return over time. Lucky Charlie, not so lucky. He ends up with, I mean, it's almost a million dollars less. And that's because when he got his returns differed from Lloyd Christmas. And the reason this is important is that, yes, we've had a really good markets. And if you happen to be retiring in the next year or so, and things are really good for, let's say, the very beginning, but then we go into a period of time where markets aren't so good, that's when we've got to be very mindful of our overall planning. Do we end up digging a hole inside a hole in those first couple years? And that's when planning comes in to say, hey, maybe we've got to be a little

• 23:16Speaker 04

  more measured in what we take out in those early years as things are really rough. It's something that we don't talk about a whole lot, but it's very real in a world where markets can be down and flat and down for a long period of time. And it could just so coincide when you are retiring. You haven't heard about it lately, Krista, because the markets have been pretty much up.

• 23:37Speaker 03

  Yeah.

• 23:38Speaker 04

  They've been up for the last decade. Just a reminder.

• 23:41Speaker 03

  But that could be a problem for people who are very near retirement right now.

• 23:44Speaker 04

  Right. And, and if markets don't cooperate, two very different outcomes, even though your average returns over time could be virtually the same. Something to make sure you're planning for in case that happens.

• 23:56Speaker 03

  Okay, let's go to questions. Katie in Florida went to wesmoss.com/ask and filled out our form. She says, Wes has been a great addition to the podcast. I look forward to his episodes every week. Thank you, Katie. I think I know what I need to do, but perhaps I just need to hear it from someone else. I'm 45. I earn about 125,000 a year as a state employee and expect to work another 20 years. Between my future pension, social security, and ongoing Roth 457B contributions, I feel comfortable taking a fairly aggressive approach with my investments. I have just under $1 million invested, but about a third of my portfolio is concentrated in Google, Apple, and Shopify, stocks I bought more than

• 24:39Speaker 03

  10 years ago that have grown tremendously. I know I should diversify, but I'm emotionally attached to them and hesitant to sell. Apple and Google are in my Roth IRA, so there's no tax consequence to selling, but Shopify is in a brokerage account and would trigger long-term capital gains. I'm also doing about $80,000 a year in traditional to Roth conversions, which already increases my taxable income. How would you recommend I rebalance these concentrated positions, especially the taxable Shopify shares? And should I do it gradually or make a bigger move now?

• 25:14Speaker 04

  Katie, this makes me think about, we think, sometimes we very often, particularly if a stock does well, we think of them as our pets. You know, my pet kind of knows that I know my pet's name and my pet knows me. You may know your stock's name, but your stock doesn't know your name. Your stock doesn't care who you are, what you're doing, how well it did for you. There's zero attachment. Maybe it's, it's a one-way street. We get attached to these names like they know us, they don't know us. So we've got to be always looking at our portfolio as just a bucket of cash. Where would I want to invest it today? Not, oh, I don't want to give away my favorite pet. I want to keep it forever.

• 25:54Speaker 04

  So in your retirement accounts or, and Roth accounts, if you've got a bunch of this Apple and Google, which have been wonderful investments over the last 20 years, really good over the past 10, but even better.

• 26:05Speaker 03

  Way to go.

• 26:06Speaker 04

  Been amazing. But would you want, and I don't think you gave me the percentage, but would you want 50% of all your holdings in those two companies? So your stocks won't know if you ghost them. The other good news is that if you, let's say, sell an Apple and a Google and transition to a broader index, they're still there. They're still big parts of the overall indices. So even if you diversify into a broad index, there's still a big chunk of that is going to be in some of those big mega cap tech names, part of the mag seven. So that one to me is easy. If it were me, I'd really be thinking about looking at those retirement accounts as big pools of cash. How would I want to

• 26:47Speaker 04

  diversify that today? Now, the Shopify story is a little tougher. And I don't have the chart in front of me, but I know you go back 10 years, it's been, I think Shopify is up three or 4,000%.

• 26:59Speaker 03

  Wow.

• 27:00Speaker 04

  Which means you've got a huge game in Shopify. So anything you sell is going to be long-term capital gain. And you're already doing Roth conversions. So you've got your 125 in income. You got your Roth conversions. You're in a pretty high bracket. You didn't tell me if you're married or filing single or not, but you're still probably mostly in the 15% tax bracket on long-term capital gain. You may be getting hit with the 3.8% net investment income. So it may be a little higher than that. And then you've got to worry about your state. What state is she from?

• 27:31Speaker 03

  She is in Florida.

• 27:33Speaker 04

  Oh, well, you don't have state tax. You don't have to worry about that part of it. So.

• 27:38Speaker 04

  So it is a harder one. And I think you said you had 80 out of a million, so it's 8%. That's not crazy. It's not above the 10% threshold for any one stock. So I would be thinking about diversifying it a little bit over the next several years. Also, and this is just a thought, I'm not talking about this particular company, but anytime you see a stock that's up 4,000%, think about this, what's the likelihood it's going to be the biggest gainer in the, in the market over the next five years? Pretty low probability. Moonshots usually hit the moon. They don't keep going past the moon. So I'd be thinking about that from a tax perspective, the retirement account diversification, in my opinion, a lot easier to do.

• 28:21Speaker 03

  Okay, Todd in Georgia says, as a fan of the show, American Greed on CNBC, I feel like it's always a financial advisor who's caught running schemes on their clients and stealing from them. As an independent advisor yourself, what types of guardrails are in place to alleviate these concerns for people like me? It's a great question.

• 28:40Speaker 04

  It is, Todd. It's kind of like the bedrock. You've got to know that you have the, the bedrock and foundation of your retirement accounts, safe, or else, and if they're not, then nothing else matters. And maybe we take that for granted, and I think it's great that somebody's bringing this up as a question. In every case I know of where somebody lost money to an advisor who, who ran some crazy fund and was taking money from clients and then disappears with money. I don't know of a situation where that advisor was using

• 29:20Speaker 04

  a third-party custodian. Every situation that I hear of or know of, the advisor was also the bank. So Jane Doe Financial was also the custodian of the money that was at Jane Doe Financial, meaning that she was the bank. She was the custodian. Jane Doe Financial held the money.

• 29:41Speaker 03

  Right. So you're not logging into Schwab or Vanguard or Fidelity to see the funds your advisor has you in. Instead, they are holding them.

• 29:48Speaker 04

  Every RIA I know uses a third-party custodian. They don't have XYZ Financial as the bank. They use Charles Schwab. They use Fidelity. They use Pershing, which is Bank of New York Mellon. They use LPL Financial. Those are massive, multi-trillion-dollar custodians. Those are the big four, by the way. And the big four, I believe, has something like 85% of all RIA money is held at those. You put those three together, it's almost 100 trillion.

• 30:22Speaker 03

  Wow.

• 30:22Speaker 04

  Hundred trillion dollars. These are massive institutions. So if you're outside of that, like, I don't know what the other 15% are. Maybe they're smaller custodians, and maybe some of them are Joe Schmo Financial, and they're the bank. That's not what you want to do. To me, the safeguard is your money is at one of the largest institutions in the world, and you control the in and outflow of the money. Your financial advisor just manages that money and doesn't have control of the in and the outflow, because they're with a third-party custodian. That, Todd, is the key.

• 30:58Speaker 03

  Awesome. Okay, Rachel in Shanghai wrote in.

• 31:01Speaker 04

  What? Are we international?

• 31:03Speaker 03

  I guess we've gone international. She says, I was born in Wisconsin and moved to the UK in 2011, and I now have dual citizenship. I'm on a two-year work assignment in Shanghai, China, and really enjoying it, and will hopefully move back to the UK in 2027. I have a UK pension and US index fund through Vanguard. I'm 43 and not sure where I will retire. Could you advise where I should prioritize my investments, knowing double tax is something I'm trying to avoid? Additionally, I own land in the US and hope to build a part-time home within the next five years. I'm undecided if I should also buy in the UK or continue to rent, and I would love your advice.

• 31:43Speaker 04

  Does Rachel make you feel unadventurous?

• 31:45Speaker 03

  Yes.

• 31:47Speaker 04

  Yeah, I was born in the US in Wisconsin, and then I went to the UK. Now I'm working in China. I'm going to move back to the US. Like, she sounds like a great adventurer to me.

• 31:55Speaker 03

  Most important part, she said she's loving it. So that's great.

• 31:58Speaker 04

  It does. It makes me feel like, gosh, I've been in Georgia like forever. All right, Rachel, here's my thought, is that, and first of all, I'm not an international tax attorney or CPA. Just don't start out with this. This is a complicated situation.

• 32:13Speaker 03

  It is.

• 32:14Speaker 04

  And in America, if you've got a house in Georgia, and then a house in Florida, or a house somewhere else, that in itself is a big deal to maintain, let alone have a house in the United States and own a house in the UK. Like, that to me is really just tough to do logistically. So I would, if it were me, I'd be picking one, and I'd be renting somewhere else. And I'd be probably building in the United States and renting a flat, which sounds cool in the United Kingdom. But that's just my opinion. You can still do it. I think if money is no object, and you're super wealthy, then sure, you have houses, own houses all over the place. But for 99% of people, that dual ownership from country to country is

• 32:57Speaker 04

  really a lot to maintain, expensive, et cetera. So I'd be picking one, first of all. Second of all, from what I know about this, and I'd say it's pretty limited, so I'm not an expert on this, is that the United States taxes US citizens globally. So wherever we, we make money, we still got to think about paying taxes in the United States. So if we're making money in China, they've got their own tax rate, and then the US looks at that and says, well, they made money, and you've got to pay taxes. However, there are some huge offsets to that. One's the foreign tax credit. So if you're making a bunch of money, I want to say 130 or 140 above that level, you can get an offset. So whatever taxes you pay

• 33:40Speaker 04

  in that country where you're working, the tax credit will, could zero you out in the United States. There's another one, the foreign employment credit only goes up to a certain level. So you're going to have to figure out which one works best for you tax-wise. But from an investment standpoint, to avoid that double taxation, the UK pension should be fine without having to deal with double taxation. Leaving money in the United States and letting it be at Vanguard should avoid the double taxation. But because of your income level, there may be an issue with the European or the UK's ISA, which I think is Individual Savings Account, which is just like the Roth here. The problem is if you have a certain

• 34:25Speaker 04

  amount of income, you can get taxed in the UK on that and the US. And it kind of, and it kind of blows the whole thing up. So I think that's the one to stay away from. Keep your investment assets. If it were me, I'd be keeping them simple and in the US, and then taking advantage of the UK pension. Again, not a international tax expert here, but those would be my initial thoughts. And either way, I just love that Rachel is the most adventurous listener, viewer, writer, iner of anyone we've had just so far.

• 35:00Speaker 03

  I do, too. Although SoCal Bernie, wasn't he, he was going to move to Portugal, but just isn't because of the taxes. So a couple of very adventurous people today.

• 35:08Speaker 04

  Yeah, love it.

• 35:09Speaker 03

  That is going to do it for us today. Wes, again, congratulations on your book, The Retire Sooner Method, The Five Secrets Behind America's Happiest and Unhappiest Retirees. Thank you to everyone who sent in a question at wesmoss.com/ask. Hope the rest of your day is fantastic.

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