09.22.26 Ask An Advisor With Wes Moss

The Dark Side of Retirement (and How To Avoid It) & Lump Sum vs. Monthly Pension Decision Tree Retirement is often touted as the ultimate goal, but Wes reveals why reaching the finish line can bring unexpected challenges. Wes exposes the sobering statistics behind aging in America, emphasizing why true retirement success requires building a "portfolio of purpose" alongside financial security. Also, Wes breaks down his brand-new decision tree to help you settle the age-old debate of choosing a lump sum versus monthly pension payouts, introducing his straightforward 6% Rule and four key questions to protect your wealth, fight inflation, and secure a blissful retirement. Mentioned on the show: ⁠How To Invest a Lump Sum or Cash You've Left Uninvested⁠ ⁠Pension vs Lump Sum Calculator - Clark Howard⁠ All this and more on the September 22, 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

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• 1:03Speaker 03

  Welcome to this week's Ask an Advisor on the Clark Howard Show. I'm Krista D. Biaz here with Mr. Wes Moss.

• 1:10Speaker 04

  Wes Moss here.

• 1:11Speaker 03

  Today on the show, we have a lot of questions for you, Wes, that came in at wesmoss.com/ask, W-E-S-M-O-S-S.com/ask. You have a couple of topics that are very interesting to me. One is about whether the American dream, we're going to work hard and we're going to get to that retirement finish line is the ultimate goal, and if it's really that blissful, and if it's not, how we can make it more blissful. Your life's work, basically, right?

• 1:43Speaker 04

  I love talking about the happy retiree. One thing I wanted to share today is some of the statistics that drive a lot of that work, because retirement can be really hard. And there's some statistics that it's time to share here on the Clark Howard Show.

• 2:00Speaker 03

  And a warning, some of those statistics are very, very sensitive topics.

• 2:05Speaker 04

  They're sensitive, yeah.

• 2:06Speaker 03

  And also, something you hear, we get a lot of questions about whether to take a lump sum or a pay, payments. Yeah, and you have new advice on that.

• 2:16Speaker 04

  I have a new way of looking at that. And I think part of it is that we've gotten to answer so many questions about that topic here on the show. It made me rethink, and it's not as though I've changed my view as a 180, but I have a new approach to try to help anybody making that decision between taking a chunk of money versus a payment stream, which, by the way, it's not just pensions, right? If we win the lottery, which, again, as an outlier example, that's one of the options. Do you want to take money over time? Or do you want to take it all in a chunk? But we're very often faced with that mathematical dilemma,

• 2:57Speaker 04

  and I have a new way of, really a decision tree to help you think that through.

• 3:03Speaker 03

  Great.

• 3:04Speaker 04

  So you've heard me here on the show talk about the core theme for so much of what I do around financial advice is to build a financial foundation, but also not ignore the life steps and the lifestyle habits and secrets that make for a happy retirement. Because what is the point if we have plenty of money and we still don't have a happy retirement? The end in mind is to really be able to enjoy that American dream, work hard, have plenty of freedom, and then do the things we want to do. We think of golfing when I want to, traveling, seeing my grandkids, seeing my children, being active. And that's how we think and we want to have when it comes to having free time and no longer having to work.

• 3:50Speaker 04

  But what makes it so that retirement is so hard? Or can be so hard? And there are some real statistics that point to, I would say, troubling, some troubling statistics around aging in America, particularly in retirement. And I'll start with this first question, which, again, was shocking to me when I first learned about this. I haven't brought it up on the show, but again, I'd say this is the kind of statistic that really drives me to want to help families find happiness in retirement. And that's this. What demographic group in the United States has the highest suicide rate of any group in America? The answer is men age 75 and older.

• 4:36Speaker 04

  You immediately think, well, young people and teenagers, Gen Z. So it's not the groups we think of. It is this demographic, men age 75 and higher. And that's a pretty shocking statistic in my book. It points to the very real possibility that retirement can be hard. That rate, by the way, for the 75-plus group, is nearly three times the national age-adjusted average, roughly eight times higher than the rate for women in that same age bracket. And this could be somebody that has done everything right, that worked for decades, provided, built a nest egg, and somewhere in their mid-70s, they look around and they say,

• 5:19Speaker 04

  wait a minute, maybe they lost a loved one, maybe their community has shifted and they have a lack of community. And this thought of useful, the usefulness goes, can go away.

• 5:31Speaker 03

  Your purpose, yeah.

• 5:33Speaker 04

  And that provider role that so many of us play. And that, for some people, and clearly from the statistics, it can be unbearable. And I don't think it's a wealth problem, because we have, America's as wealthy as it's ever been. Not everyone is wealthy, but as a whole. I think it's a purpose and a connection problem. How about overdose? Here's another question. What age group has seen the fastest growth in overdose deaths in the last two decades? The answer, adults age 65 and older. It's grown at three and a half times over the past two decades. So that rate more than tripled from 2000 until the most recent statistics, and it kept climbing even after that. Social isolation.

• 6:16Speaker 04

  This one is very nerve-wracking, in my opinion. About one in four Americans, and these are community-dwelling Americans, which means they live in their own homes, so it's not in a community, retirement community. About one in four adults in the United States age 65 and older are socially isolated. What does that mean? Loss of a spouse, it could be because of loss of spouse, loss of friends, loss of siblings. The end of daily workplace relationships. Adult kids move away. They're tending to their own careers and their own children. Could be chronic illness, could be reduced mobility, could be the loss of being able to drive. And all of a sudden, you're getting isolated. Or they, maybe that person has maybe moved away from their community

• 6:59Speaker 04

  where they have spent so many years. You put all, just those three together, and you're talking about a big chunk of Americans. Considering, Krista, that we have 11,000 people a day turning 65, demographically as a nation, we're facing this more and more, because we are an aging population. And this is what I would like to be able to combat. And the first step of being able to combat it is to understand that not everyone in retirement is happy. Now, the good news is that I'm a believer that the majority of Americans do end up with a happy retirement, but there's still a big percentage.

• 7:40Speaker 04

  And if I do the math on the 40-plus million folks that are reportedly retired, that means that over 10 million folks are not loving it. And for that group, retirement can be, is very hard for that group. And it's because of two things. One, I've talked about this here on the show. I think we very much have a friendship recession. We've been in a friendship bear market for a lot of years, since the early 1990s. Having zero friends has gone up 6X, over 500%. Gone from 3% in 1990 to 70% in 2024. The two or fewer friends has doubled in the United States. Share of five or more friends has gone down by 34% during that period of time.

• 8:22Speaker 04

  So the statistics support that this is an ongoing problem. Number two, we have this, what I consider a purpose vacuum. And it happens, again, because demographically, we are aging and stopping work more and more as a country. Work goes away, work community goes away, our provider nature goes away, the steady paycheck goes away, which also leads to fear and anxiety. And two of the big pieces of the equation that are, that are non-financial, but equally as important as the, the money green zones I talk about, which would be secret two and three in the retire sooner method are about combating that. And I think that the reason I want to bring it up here on the show today is that we just have

• 9:06Speaker 04

  to acknowledge that retirement is much as we love it to be beaches, mountains, hiking, travel, cruises on the European rivers, grandkids, golf. And that's what I want it to be for everyone in America. It's not necessarily, and I think that's what drives the research that I spend so much time doing and the very real purpose that I find in making sure that people look at the entire equation, which is beyond those money green zones and make sure that we are working very hard to create, cultivate, maintain community and working very hard to create what I consider is a whole portfolio of purpose.

• 9:51Speaker 04

  And I think that goes a very, very long way. So I, and you mentioned this before the show today. I challenge all of us to go talk to our families about it. Go talk to your wife or your husband. Go talk to your kids or talk to your relatives and your friends.

• 10:07Speaker 03

  And your parents.

• 10:07Speaker 04

  And your parents. I don't want people to be afraid to bring these very important issues up. If we surface them and we talk about them, I think that we have the very great probability of avoiding some of these really bad outcomes. And at the same time, maybe you help someone, maybe you even help save a life in the process.

• 10:28Speaker 03

  So important. Okay, let's go to some questions that came in for you, Wes. This one's from Alex in Georgia. Hi Wes, on the last show, you responded to someone and pointed out how a paid off mortgage was one of the green money zones. This topic has me paralyzed. I'm 64, my wife is 55 with no kids and will both be retired before next year. We live in a paid off home, but it's way too small and we've been in it 30 years. When I think of switching to anything else, I know my living costs are going to go to five X at a minimum with an inflated tax and insurance and also a new mortgage, even if we take all the proceeds from the sale, 400K net and use it toward the new place. Then there's the HOA fees, which we don't have now and are hard to avoid.

• 11:14Speaker 03

  We have $2 million in a Roth and taxable account, no IRAs, but it simply doesn't seem like enough to flip our living expenses from affordable to exorbitant. And there's really is no in-between. It's more of a question of how exorbitant. People tend to move when they retire, but are still cautioned against having a mortgage. When faced with the new, how much is enough question, enough to me would mean having the opportunity to live wherever we wanted without worrying about our principal eroding quickly. My wife still has 40 years of retirement left, so.

• 11:46Speaker 04

  Well, 40, 40 years of being retired.

• 11:49Speaker 03

  Right.

• 11:49Speaker 04

  So I'm. They're not quite retired yet, right?

• 11:51Speaker 03

  Not yet, in the next year. So I'm still growing our portfolio to get it to at least $4 million to give us this optionality. I also know how to generate some cash flow from my portfolio without selling assets. I'll need to give that some time before counting on it though. Our social security benefits will be moderate as we were never high income earners. So my question is about whether I should consider moving now versus waiting until I reach my liquid net worth goal of $4 million. Obviously option three is to just stay put, but I want to know if I can even consider moving once we're retired.

• 12:26Speaker 04

  Alex in Georgia, it does seem like you guys are caught. And it seems like a pretty difficult equation to be caught in because you've lived in this house forever, it's paid off, but it's, it sounds like it's way too small. Now, normally you're considering downsizing anyway in retirement because I don't know if you have children or not, but either way, kids are gone or if you don't have children.

• 12:52Speaker 03

  I believe you said no kids, you had no kids.

• 12:54Speaker 04

  No kids. So I don't love the idea of you being stuck in a house. You probably wouldn't have written in it with this question if you felt like you could bear it. So it's probably really, really getting to you, but I also think, I'm going to solve your paralysis right now. You do not need to be paralyzed around a rule of thumb. Our financial community gives you a list of all the good things you should do. You should max 401K, you should backdoor Roth max, you should fund your HSA, your kids 529 plan should be full every year, should pay off the mortgage. Yeah, those are all things that we would like to do, but we can't necessarily do all of them all at the same time. So we have to choose.

• 13:39Speaker 04

  And in your case, because you have 400K in equity and you're in Georgia, you know, I'm on Zillow very often just to see what the housing markets are like. There are a lot of great houses that are probably bigger than where you are for 650. And you can get 2,500 square feet, maybe over 3,000 square feet, which for two people probably is plenty and maybe a lot bigger than where you are today. And you're only adding a mortgage. I know that we want to get rid of a mortgage, but you would be adding 1,600 to $2,000 a month for a smaller mortgage and you'd have plenty of equity in the home. So you wouldn't have PMI, et cetera. You don't necessarily have to find a place that has HOA.

• 14:24Speaker 04

  But yeah, if you're paying zero right now, and the only thing you're paying is property taxes, of course your costs are going to go up with any housing. But if you've got $2 million and your goal is to get to four, I mean, $24,000 a year in new housing costs divided by, let's just say you get to 3 million, that's it, not even 1%. So I think you're paralyzing yourself for no reason. You got a lot of equity and a little bit of a mortgage that is very manageable in this situation, I think could be the route to consider.

• 14:57Speaker 03

  What about renting even for a year or two and just seeing if you like that bigger house and the community you're thinking of moving into and then putting the money in, you know, something that Wes would recommend that might throw off four and a half percent or something?

• 15:10Speaker 04

  Yeah, I don't know. I mean, I, this phase right before retirement, you bring up a good point. I would rather you be able to buy the home, if you're going to buy a new home, while you still have wage income.

• 15:24Speaker 04

  Everything gets a little harder once you stop working.

• 15:26Speaker 03

  Yeah. All right, let's go to Simon in Florida's question. My grandfather inherited 870 shares of stock years ago. It's split and he had 1,740 shares, roughly $300 a share currently. He recently sold his half to make some home repairs and buy a dream motor home. He now has about $100,000 left of that in a high yield savings account, which he will use for travel and everyday expenses little by little. He lives a very frugal lifestyle and doesn't spend much. For the remaining shares, we are worried that he has too much in one company. He's 90 years old and in very good health. His hope for the remaining shares is that it can continue to grow in order for him to be able to leave some to his grandkids. He has no other retirement investments, accounts, et cetera.

• 16:10Speaker 03

  Should the remaining shares be sold and placed in another type of investment or retirement account? What impacts could selling have on Medicare, social security taxes, et cetera? And what's important to know about the step up in basis? Thank you for all the great advice throughout the years.

• 16:25Speaker 04

  Hey Simon, I would say, it sounds like mathematically 1740 times 300 is a little over 500K, half of that is 260. That is a lot to have in one company. So in a perfect world, sure, you would diversify it and be broadly diversified in a low cost index and not be subject to the whims of one particular company. That would be in a perfect world, but we don't live in a perfect world. And in order for your grandfather to sell, he's going to probably realize some long-term capital gain. If he passes away with the stock, the heirs inherit that stock with a new basis, then the heirs could sell and have zero to very small amount of capital gain to begin with.

• 17:10Speaker 04

  But the threading of that needle, Simon, would be that maybe your grandfather has a little bit of room to be able to sell some of that stock and still stay in the 0% long-term capital gain bracket. He probably has social security, maybe has a pension, but then there's probably some room in selling that he, maybe it's 10 or $20,000, maybe it's not that much, but there is probably some room to be able to sell, diversify without paying any long-term capital gain taxes. And that's how I would be looking at this. Yes, perfect world, diversify it, but I don't want him to be paying 15% in capital gain when ultimately the heirs would likely pay zero.

• 17:56Speaker 03

  Robert in Washington says, hi Wes, my wife was at her job for a little over a year and then switched to a new company. We have been slow in moving her 401K from the previous employer to her new one. She has a 401K set up at the current employer and has been there for over a year. Well, today she was offered a new job that she will start in mid-October. The question is, does she hurry and move the previous 401K to the current employer? Or should she just wait and transfer both retirements, the current and previous jobs to the new job? I'm not sure on the vested percentages, but can assume she is not fully vested in either one.

• 18:29Speaker 04

  Don't feel like you're in a rush to move the old one into the new one, then move both of those into the, the new, new one. So it sounds like to me, Robert in Washington, you have time. There is no rush to do these rollovers whatsoever. You can leave two companies ago, 401K and leave it there as long as it's invested and you like it, that's totally fine. The, the reason we consolidate IRAs or 401Ks into one spot, it's a little easier to manage and we don't lose track of things.

• 18:58Speaker 03

  Doesn't it also depend on who's minute, like if it's Vanguard versus an insurance company?

• 19:03Speaker 04

  Yes.

• 19:03Speaker 03

  That the old employers are in the new one too.

• 19:05Speaker 04

  But the thought of waiting another couple of months until the new 401K is set up, no problem.

• 19:11Speaker 03

  But you might not want to even move it if the new employer's 401K is with insurance company and the old one's with Vanguard or Fidelity or something.

• 19:17Speaker 04

  For the most part though, I, so many plans have gotten better over the years and they've gotten less expensive with more options. So odds are that you're going to like your 401K plan, but don't feel like you have to be in a rush to get the other two plans, dollar amounts into the new plan. You've got time to do that. I'd wait until you're totally set up at the new, new job with the new, new 401K and then make the move.

• 19:43Speaker 03

  Okay, we're going to take a quick break. We'll come back, more questions for Wes and you're going to talk about lump sum versus payouts, monthly payouts.

• 19:52Speaker 04

  Yes.

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• 22:23Speaker 04

  Lump sum or pension? Welcome back to Ask an Advisor. Wes Moss here, along with Krista Debiass. This is a very new take on an age-old question. I've done videos over the years around, if you get offered a lump sum, should you take it or should you take monthly payouts? Now, this became really popular back, call it, two decades ago when General Motors went through all these layoffs. And Detroit was famous for buying people out. And companies saying, hey, you have a pension, but we'll give you some money in order to not take the pension instead. That was well-known, has been well-known for the last couple of decades. It's still going on.

• 23:06Speaker 04

  And it's just this perpetual financial decision that lots and lots of Americans are having to make. Whether it's a university system, there's been some, some big university systems in the news that are doing the same thing. Pitney Bowes, I believe, is another company that has been making these offers. But it just happens. It's a normal course of business because companies want to take away the uncertain liability of what they would call longevity risk. Meaning that you might live to year 100 and they have to keep paying you. They'd rather maybe figure out a way to buy you out. So this is this age-old, do I take a big chunk of money, put it in a retirement account, typically with a no tax issue? That's typically how this works on a lump sum. Or take the monthly amount?

• 23:50Speaker 04

  And it's actually, I give credit to the audience. I've, we've had enough questions about this and they're all nuanced in their own way. Cause it's not just a black and white answer. I call it, there's this 6% test, but it's more than just this number test. And a lot of times, if I'm thinking back on most of these questions, most of the time, it seems to be the, the better choice is the lump sum. And I've had people ask, oh, gosh, don't know what to do. My, it's a 6 and 1/4% monthly payout. Maybe I should do that, but I'm paralyzed. I'm in, I'd like to be in the business of helping you not be paralyzed in making your financial decisions. So I want to make this one a little bit easier. I think when you get a lump sum versus pension offer, right out of the gate,

• 24:34Speaker 04

  your default should be to take the lump sum. Or at least lean towards taking the lump sum, subject to the following, which is very simply, do the 6% test. And the 6% test is again, very simple. If it's, the offer's 2K a month, that means $24,000 a year, divided by the lump sum that you would be getting instead. So if that number is 300K? Is that, that's a tough one, right? 24 grand a year or 300K? What's 24 divided by 300? 24 divided by 300 is 8%. The reason that's a hard one is that you're at 8% and now you want to maybe start considering the pension amount, the monthly amount. But to make this simple,

• 25:18Speaker 04

  if we're already starting by leaning towards the lump sum, if it's 6% or lower, just stick with the lump sum and you're done. There's, in my opinion, nothing else to consider. And that's, that's for most people. But if for some reason, the monthly amount passes the 6% test with flying colors, it's 6 and 1/2, 7 and 1/2, 8 and 1/2%, which happens, then you say, okay, well, maybe I'm going to lean towards taking the monthly payments. But then you need to answer four more questions in the affirmative. Four more questions, Krista, to stay with the monthly versus reverting back to the lump sum. And they are these four. Is your expected longevity high? Again, the longer you live, the better the deal, the pension would be typically.

• 26:03Speaker 04

  Number two, do you have ample other liquidity? If you have plenty of other liquid money, 401K IRA, then maybe you can take the payment stream versus the lump sum. So we're still on yes. Does managing the lump sum amount make you slightly uncomfortable or nervous? If you answer yes to that, then again, maybe better to have this monthly amount that is coming from someone else. And then four, would the full monthly payment be protected from the PBGC if the company trying to, that is paying you has financial trouble? And if you can answer, if you answer yes to all four of those, then I think you're decidedly leaning towards the monthly amount for life

• 26:47Speaker 04

  versus just the lump sum. One other caveat, the vast majority of these monthly amounts do not come with colas. They do not increase with inflation over time. It's another big consideration. Some of them do. And if you have a cola, which if you had yes, yes, yes, yes, let's say this was 8% and this was yes, yes, yes, yes. And cola, I'm probably taking the payout, the monthly payout. That animal doesn't exist though, all that often.

• 27:14Speaker 03

  And I just want to clarify something that maybe it will make me sound super ignorant, but my understanding is if you take the lump sum, you, as long as you roll it and put into like an IRA, you don't have to worry about the tax impacts that would have on you at that time, right?

• 27:27Speaker 04

  Absolutely correct. That is the, treated as a direct rollover.

• 27:31Speaker 03

  Okay, great. Okay, let's go to questions. Stacy in Arizona says, coming to you from the wondrous land of midlife career change. And for the first time ever in my employment journey, I own an HSA. I'm contributing what I can and my new company is matching 150%. I was surprised to discover that I can invest in low-cost Vanguard mutual funds within the account. While searching through the first two dozen choices, I found that two that seem low risk and have high marks from Morningstar. Is it a good idea to invest in those funds? Or does it make more sense to just leave them be? I absolutely love your Tuesday appearances and plan my evening exercise routine around them. Thanks, Wes. And PS, I just.

• 28:14Speaker 04

  I love a PS. You never get a PS in the world anymore.

• 28:16Speaker 03

  This is a great one. I just passed my SIE and Series 7 exams and I'm taking my Series 63. I'm looking forward to becoming an entry-level customer relationship associate, helping people with their finances, just like you.

• 28:30Speaker 04

  Stacy, God bless you. You, hopefully you're in your workout right now. Why, I'm answering this question. One, two, if you've already passed the seven, from my memory, many, many, many years ago, that's the hard one. And the 63 should be a breeze. As far as your HSA, this all goes back to Time Horizon. But if you are someone that is probably not spending your HSA money in any given year and you're looking at it almost like a healthcare 401K account that's going to grow over time and you're not really having to tap much of it, then yeah, absolutely, I would consider investing it. And it sounds like you have a couple dozen options and you probably could even do a balance

• 29:15Speaker 04

  that has some equity, some fixed income. So particularly if this is going to be long-term, almost like a retirement account for healthcare, then I don't see any issue with investing it. Full disclosure, Krista, because I have a family, we are a family of six with four younger boys. Our HSA money gets spent every single year.

• 29:35Speaker 03

  Yeah.

• 29:36Speaker 04

  Like the whole amount. And it's been that way for as long as I can remember. So Stacy, in full disclosure, I stopped and I just leave mine in the highest interest money market I could find because I know that it's going to get spent. Now, as time goes on, will I, will I start investing my HSA money? Hopefully, which means that we're spending it less as a family on healthcare.

• 29:57Speaker 03

  Okay. Brian in Washington says, my wife and I are five years from retirement. She's a teacher and I'm a police officer. We've both been maxing out our 457s, partial Roths, and my wife has been contributing an additional 10% investment in some program through her school district since she started 25 years ago. We owe $400,000 on a house with approximately $1.3 million in equity. I did the retire, rehire program where I work, sometimes called a drop program, two and a half years ago, and plan to continue working with double pay until she retires in five years. Does it make sense to continue to max out our 457 contributions and pay the house off in a couple of years, or stop contributing now and pay

• 30:41Speaker 03

  it off in just over a year? Our interest rate is 5.5%, but our investments are doing much more than that. Any advice is greatly appreciated. I really enjoy your time on the Clark Howard Show. It's a perfect fit. Keep up the great work.

• 30:54Speaker 04

  Hey, Brian in Washington, five years to go. Teacher and police officer, public servants, and it sounds like you guys are going to be in a really good financial situation and already are. She's 25-year teaching. She's going to have a pension. You're getting double pay right now, which is awesome. And that's a big piece of the equation because you're making double, or maybe not fully double, but you're making probably more than you've ever made, and she's working. So you guys are in a high income bracket. That means that the contributions to your retirement plans, the 457s, are even more important today. My thought here would be to continue to max those out, not take your foot off the gas just to pay the mortgage

• 31:37Speaker 04

  off a couple of years earlier, because you're probably, it sounds like you're already on track to pay it off in the next several years. I don't think you need to accelerate it to be done in a year or two. Remember, the money green zone in housing is to have your mortgage pay off within sight. Yours is already within sight. So keep building your liquid assets. And if you've already maxed out, which it sounds like you may have some money left over, maybe you pay a little bit extra on the mortgage, but I wouldn't stop my retirement contributions to just focus on the mortgage at this point.

• 32:09Speaker 03

  All right. This one came in from Lee in Georgia. Lee says, I learn so much every time I listen. I understand that Wes is well, almost indifferent about whether an investor has a target date fund in their 401k, or whether they simply select the exact mix of investments themselves. One concern that a listener pointed out was that when you sell a target date fund, that you don't get to select the exact amount of stocks or bonds that you sell. You just sell a slice of that target date fund, which is a predefined mix of both. Is this really a concern, however? If I invest in a target date fund for most of my career, and then when I get closer to retirement, I simply sell the target date fund and purchase the exact mix of stocks, bonds, et cetera, that I want. From that point,

• 32:53Speaker 03

  I can gain the flexibility to sell what I want out of my portfolio, stocks or bonds. Why not let the target date fund worry about rebalancing and reducing the risk in my portfolio over time by adjusting the percentage of stocks down? That's just one less thing for me to do or worry about. Am I missing something here?

• 33:11Speaker 04

  Lee in Georgia, am I indifferent? Does it seem like I'm indifferent?

• 33:15Speaker 03

  Well, Clark, I'd say Clark.

• 33:16Speaker 04

  What is your opinion on my opinion?

• 33:17Speaker 03

  No, I think, I think my guess is that Lee also hears Clark, who is super pro doing the retirement date funds, because it just is the easy button and you don't have to worry. And so he loves that, rather than someone trying to, you know, sort of figure it out themselves. And you just haven't been as effusive about them as Clark is. And I would definitely use that word for the way he feels.

• 33:40Speaker 04

  Here's why, Lee. I would say I'm not indifferent. I would say that I agree with Clark that the easy button sometimes is a wonderful thing, because the, in financial advice, probably, and in life, Krista, whether you're building a house or just in general life, the enemy of a good plan is the dream of a perfect plan. And that is why a target date fund checks a lot of boxes, and I would put it in the quote, "good, it's pretty good" category. And that's why I don't hate them. Now, I will say that there are two different phases of

• 34:19Speaker 04

  life to use them, and in one, I really don't like them. I'm okay with the target date fund in accumulation, because you're socking money away. It's doing all the work for you. It's giving you diversification. It's changing its allocation over time. And again, a good plan is exactly what a good plan is. It's something that can work. And for someone like you that you're, you're already mentioning, like you don't want to be fiddling around with your allocation, then you're much better off being invested in a targeted fund than being paralyzed and not investing at all. But when you get to distribution, I don't think they're good. Now, again, are they better than doing nothing? Sure. But you do end

• 35:02Speaker 04

  up with the situation as you're pulling money out, Lee, and you've got this pie chart of stocks and bonds, and you're pulling money out, and the stock market is down 25%. Do you really want to be pulling just from the stocks? Or do you really want to be pulling from the entire pie? Or are you better off pulling from the safety assets to let the stock side recover? And if you have an allocation where you get to choose, meaning you have a stock portfolio and a bond portfolio in some other areas, I like it in the distribution phase. I like to have some optionality in choice of where to pull money from, and a target date fund does not do that.

• 35:42Speaker 03

  So I like Lee's idea. Stay in the target date fund until you get close to retirement, then you move it into stocks and bonds. What do you think?

• 35:49Speaker 04

  I would say it's okay, certainly okay in the accumulation phase. Yes, I agree. And then in distribution, instead of having one fund that has four different, an asset allocated target date fund, I would own those four or five areas individually, so you can choose which ones to sell when you need it.

• 36:07Speaker 03

  Okay. That is it for us today on Ask an Advisor. Again, ask your questions at wesmoss.com/ask. And Wes didn't ask me to do this, but I'm a big enthusiast of, I love his book, The Retire Sooner Method. If you haven't gotten it, please get a copy and review it, right? Doesn't it, don't reviews help you?

• 36:25Speaker 04

  And just the Kindle version just came out. I just noticed it. I didn't even know about it, but it, I just saw the Retire Sooner Method is in Kindle version now on Amazon. And please, if you did read it, it is a really big deal to get reviews. An honest review, I would ask you for that on Amazon. Thank you so much.

• 36:44Speaker 03

  Sure. All right. Have a great rest of your week. Clark's back tomorrow with a new episode, and we'll be back next Tuesday.

• 36:54Speaker 06

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