Pod Insights The Clark Howard Podcast 12.23.24 2025 Home Price Projections / The Average 401(k) Balance About this episode Today, our last show of the year, Clark looks ahead to where home prices are likely to go in 2025. Also in this episode, Clark shares data on the average 401(k) balance. There’s room for improvement to get better prepared for retirement moving forward. 2025 Home Prices: Segment 1 Ask Clark: Segment 2 401(k) Balances: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Why You Should Never Store Your Payment Information Online Virtual Credit Cards: An Online Security Measure Worth Taking? Top 7 Ways To Shop Safely Online This Device Can Help You Avoid an Annoying Car Rental Fee Is a HELOC a Good Idea? The Simple Answer HELOC vs. Home Equity Loan: Similarities and Differences USA TODAY: The average 401(k) balance for ages 55 to 64 may surprise you Invest & Retire - Clark.com Should You Make Your Child an Authorized User on Your Credit Card? What Is Umbrella Insurance and Do You Need It? Clark.com resources Episode transcripts Community. Clark.com Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
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1:05 Speaker 02 It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. Today is our last show of the year and then we're going to have some best ofs for you as I'm going to take some time off. And we're dressed festively today. Me for Hanukkah, Krista for Christmas. And do you know this year is a rare one because Hanukkah and Christmas both? The Hanukkah starts the evening of the 25th, Christmas obviously on the 25th. So we're all celebrating together. We are.
1:50 Speaker 02 And so that's why for those of you who watch the YouTube show, I'm wearing blue and you're wearing red and we've got all our decorations up. Hope that you have just a wonderful time this week and next week. I'll be back on Friday, January 3rd. We're going to start off 25 with a Clark stinks to kick off the year. Yep. So I'm looking forward to that and today's show. I'm going to bring out my crystal ball. I'm going to talk about something I'm asked about constantly. And that's where I think home prices are going in 25.
2:35 Speaker 02 This is only going to be an educated guess, but I feel confident in the guess. And then later in this podcast, I want to talk about new stats about what the median, which means a half of people have less, half have more 401k balance as people approach the decade leading into retirement. And the stat, gosh, these numbers are not your friend. And I want to talk that through with you. Okay, so home prices. It's been bad, ugly to be a buyer the last few years.
3:17 Speaker 02 And it's been magnificent if you're a homeowner. I don't need to devote much time to why. I mean, so many of the owners bought homes when prices were much lower and when mortgage rates were much lower. Buyers today facing a much higher home price and stubbornly higher mortgage rates. Now, the mortgage rates before, they're not coming back because those were manipulated rates. But there are factors in the market that mean that steadily income is going to help as people's income rises over time.
3:59 Speaker 02 The affordability of houses will become more favorable. Is it going to be like what people had with crazy low mortgage rates and much lower prices before? No, but over time, things normalize and you have what's known as reversion to mean, meaning that you can't have it a situation where permanently, nobody can afford to buy what you're trying to sell. That's why inventories of homes available for sale keep rising in the United States. And in more and more metro areas, prices have stalled out or declined in the last year.
4:43 Speaker 02 Others, the rise has been tiny compared to what it was in prior years. And so as a general trend, and real estate has locality to it as well, but as a general trend, we're going to see home prices not really going anywhere over 25, maybe 26. Moving forward, the prices are basically stalled out. And there are a number of signs showing this to be a case. Again, there are local differences that make what I'm saying not necessarily apply in the zip code you're looking for wherever you're looking in the United States.
5:27 Speaker 02 So I'm talking about general trends that houses are marginally going to become effectively more affordable versus income. As income rises and home prices don't, they'll become more affordable. Mortgage rates, until it's clear that we're not going to have a rapidly expanding budget deficit in the first year of the Trump administration, if that does not come about, we'll see mortgage rates begin to decline again. And so then you'd have the lucky combo of home prices as a buyer not headed upward and mortgage rates becoming better.
6:12 Speaker 02 And so we'll see, and you know, a year from right now, I'll either have egg on my face or I'll be proven right. But the data seems clear enough with number of homes coming on the market so much larger than they had been, homes sitting on the market for sale for longer periods of time than they were before. And new home builders building steadily more inventory that the conditions to be a buyer are not going to be like, wow, this is the greatest time ever to buy a house, but the worst time ever to buy a house is now in the rearview mirror.
6:55 Speaker 02 And the conditions, in my belief, will become more favorable. How about for you as a seller? The best news for sellers, in my opinion, has already happened. It's not like the value of your home is going to drop like a rock, but it means that conditions are not going to push prices steadily higher. There are markets in the country that I discussed about six weeks ago where the prices are actually dropping in the actual dollar amounts people are willing to pay. That is at one end. And then at the other end, you have a small
7:37 Speaker 02 number of markets where prices are still going up in appreciable amount. But the overall picture is prices are where prices are, and they're not going to move at crazy higher prices overall anytime soon.
7:54 Speaker 03 Okay. This question came in from Linda in North Carolina. I read your article about not saving payments methods, but I just got a letter from Discover Card asking me to sign up for an electronic virtual card number. The first step is to save my Discover Card in Google Chrome as a payment method. It is promoted as being more secure, but is it really? I wanted your opinion on this.
8:17 Speaker 02 It absolutely is more secure. In addition, if you use Apple Pay, you use Google Wallet, they give you these options of generating a one-time-use card number.
8:31 Speaker 02 When you pay these methods, it's much safer because even if a criminal successfully hacks a payment network or whatever, they don't have your real credit card number. They have this one-time-use authorization number essentially. So what Discover is offering is a significant enhancement of security using your Discover card.
8:56 Speaker 03 Paul in South Carolina says, "Clark often says to use a transponder in a rental car. Here's the response I received from the overseeing office in the state of Maine where my transponder was issued when inquiring about using it for a Florida rental." Quote, "There are risks when using your EZ Pass in rental vehicles. The license plate of any vehicle you're using must be added to your account prior to travel. Once added, it will be valid for travel in Maine in 24 hours and out of state in 48 hours. As you can see, this is the first problematic issue with rental vehicles and EZ Pass devices. You generally do not know the license plate number until you pick up the vehicle. The second issue is that the devices are not generally mounted to the windshield as you
9:37 Speaker 03 most likely do not have dual locks to adhere the device to the windshield. If when traveling through a toll booth, the device does not record, the system takes a picture of the license plate. It then searches the system to see if the plate is listed on an account and if it is, the toll post to that account. If not listed on an account, the image just goes to violations and the violation notice goes to the registered owner of the vehicle, which would be the rental agency. The rental agency typically charges you a fee."
10:03 Speaker 02 I understand what you're talking about, about it not registering the vehicle. I use one that is sold specifically for the purpose of you having a portable toll reader, has the suction cups that adhere to the windshield. I sign into my account when I get to the car rental facility and before I ever leave the car rental lot, I register that tag or plate number with the account I have for the UNI, the U-N-I. It's a portable toll pass that works in, I think about 20 states now. They've got a map you can see. It's sold by
10:43 Speaker 02 the Central Florida Expressway Authority, whatever they are, and it's cfxway.com. You can buy one of these on Amazon. And you just have to remember, as the question posted asked, you have to remember to put in the tag or plate number immediately in the description of the vehicle before you drive off the rental lot. Then, when you return the vehicle, you have to remember to delete that vehicle plate or tag number from it and that vehicle description. Or guess what? Even though you've taken that toll reader out of your vehicle, somebody goes through
11:26 Speaker 02 a toll without paying it, they bill back to you because you actively still have that plate or tag in your registration for the toll reader. You gotta do it in and out, but it saves you so much money having this. And it has worked for me. I've never had a problem with putting in the tag or plate number of a vehicle and having it not instantly billed, even if I go right through a toll minutes later. And it's been great for me because the car rental agencies, all without exception, rip
12:08 Speaker 02 you off to the end of the earth when you have them bill you for tolls.
12:14 Speaker 03 Casey in Georgia says, "I was a single mom of four and built up $16,000 in credit card debt. I am remarried now and a mom of five. I also have..."
12:24 Speaker 02 Congratulations on your new child.
12:25 Speaker 03 "I also have a $2,200 hospital bill from the birth of my new son. I've been slowly trying to pay off this debt one card at a time, paying the minimum balance on the other cards while I pay $100 on the card I'm trying to pay off first. We are constantly receiving offers to pull equity from our home. At least $20,000 would pay off all our credit cards and hospital debt. Is this a good and responsible idea to borrow equity from the home to pay off credit cards?"
12:51 Speaker 02 Okay, let's talk about behavioral and let's talk about finance. So you do a home equity line of credit. And you pay off the 20 grand that you owe the credit card companies. Generally, the home equity line will have a much lower interest rate than the credit cards that you're paying off gradually over time. The problem with this, in terms of behavior, is what happens to most people is then those credit cards all have no balance. And people turn around and start using the cards again, and then you have the worst of all possible worlds.
13:34 Speaker 02 You have the debt against your home, putting your home at risk that you're paying off, plus you develop new credit card debt. If you know in your heart of hearts that you will absolutely not use any of these cards moving forward, no matter what, you will not use them, and then you're on a regular schedule, I don't know if you're looking at a home equity loan or a home equity line. Just to review, if you expect you can pay off this money in under three years, you want to do a home equity line. Otherwise, you want to do a home equity loan, which is a fixed rate, most often for a
14:19 Speaker 02 five-year period. So you'd have a set payment for the next 60 months to wipe out that 16,000 in credit card debt and the $2200 hospital bill. If you can use it that way, where you absolutely get it paid off, and you don't use the cards, good decision. If, on the other hand, you don't know for sure you do that, you're best off not adding additional debt against your home and doing what you're doing now, even though it means potentially paying more interest. We're talking about debt right here, and again, Casey, congratulations on your newborn.
15:04 Speaker 02 But we got to talk about the other side of the ledger, money saved. And I'm going to do that straight ahead because there were new stats that concerned me about the typical amount of money that somebody in their mid 50s to mid 60s has saved for retirement. And short answer, it's not enough. That's straight ahead.
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17:16 Speaker 02 There was a news report recently that sounded somewhat promising. It was about people who have a Vanguard 401K, the lowest cost provider of 401Ks. And I think the largest provider of 401Ks, but anyway, millions of people have them. That the average balance in those for people in the decade leading into retirement from basically mid 50s to mid 60s was now right about a quarter million dollars. And that's what was reported very heavily in the media. But if you dig further, and this is why statistics can make people's eyes glaze over.
17:59 Speaker 02 If you look instead at the average balance, which is skewed by people who put tons of money into a 401K, and you look at the average person's balance, the average person's balance is just about a third of that, 80 something thousand. So 80 something thousand in a 401K at time of retirement, it's great you got the money. But if you follow the rule that you can only spend 4% of your balance each year and not run out of money. So we're talking about somebody being able to spend 3,500 or so dollars out of their
18:43 Speaker 02 401K each year in retirement that then would inflation adjust. But still, what would you have to live on? You'd have social security if you're eligible for that and 3,500 bucks plus whatever work you do. So this is not a guilt trip. It's a fact. Remember, only half of people have access to 401Ks. The other half are on their own and tend, because it's on their own, it's not automatic through payroll, they tend to even save less. So it's my thing.
19:20 Speaker 02 And this is, this Christmas week, this would be a Christmas gift to yourself. So let's, let's hop in there with something, not waiting till a New Year's resolution in January. If you work somewhere and you have a 401k and you're really not participating a lot, give yourself a Christmas gift right now, sign into your account, and increase the percent of your pay that's going into that 401k. Money has so much more impact, the younger you do it, and the more money you put in. The other day, I was talking with somebody who was not participating in her employer's 401k.
20:05 Speaker 02 So I did my typical thing, like, um, so what's your plan? She was in her early 30s, and I said, "What's your plan down the road?" And she said, "Well, I got, I got expenses, I got kids." I said, "Yeah, 35 years from now, your kid's gonna take care of you." She laughed. I said, "So who's gotta take care of you?" And she didn't answer. I said, "You're the one who's gotta take care of you." And there was an employer match of 6% of the pay. I said, "You gotta at least put in that." I mean, you got to, you gotta do it for yourself, because you don't want to be a burden on your kids 35 years from now. So whatever age you are, whenever you start doing it,
20:49 Speaker 02 this is an opportunity, particularly when there's the bribe of an employer match. I want you to grab that money. It's free money coming to you. How often is there free money that's not a scam? This is real. Think this through. Because would you want to get to a point where your retirement age and what you got to live on as a cushion, realistically? If you've got that average, that median, what's known as a median balance, that you can only draw $300 a month out of it? Uh-uh. You want more, right? You want more financial security, I hope. And procrastination does not pay.
21:36 Speaker 03 Okay, Shane in Wisconsin says, "We have a 16-year-old daughter that is buying my 2015 Honda Civic that I bought new, and she has worked and saved the money for it, but I'm wondering if it would make more sense for her to take out a loan. I assume that I would need to cosign to help her build her credit. Would it make sense, or is there a better way to achieve this?"
21:56 Speaker 02 So Shane, if she went to a credit union, they reported the vehicle loan, they would do something with a 16-year-old where they would make it secured against the money she would put on deposit in a savings account, it should have a very low cost and a spread there. And if the credit union will report that to a credit bureau, that's awesome. Teachers are the habit of making a payment every month. It would be at very low cost if a credit union does it. Most banks don't do this kind of thing, where they do like a secured vehicle loan. Not every credit union does, but it's a common credit union product.
22:40 Speaker 02 And then there she would be establishing good credit, and likely she would not need a cosigner, because the money she's worked hard for and saved would be her security against the loan payments. And I love that at 16, she has worked hard, saved up the money, and is paying you for the vehicle. That will make her a better driver, and she will take better care of that vehicle because it just wasn't given to her. So I think this is wonderful. Now, if you find where you live in Wisconsin, that this becomes, "Well, you gotta do this, that, and the other," and it becomes like, "Forget it," and she just pays cash for the car,
23:23 Speaker 02 you can make her an authorized user on one or more of your credit cards. Don't even give her the plastic. Report her social security number when you sign her up as an authorized user, and she will establish, as long as your credit's good, she'll establish a great credit reputation, great credit score, by the time she reaches young adulthood.
23:47 Speaker 02 And again, you don't give her the card because you don't have to worry what she buying. You're just lending your good credit to her.
23:56 Speaker 03 Dara in Maryland says, hi Clark, knowing you've owned a lot of real estate and are all about consumer protection, any safety recommendations from a liability perspective for a pool owner? I just bought a house with a pool and I'd like to implement any safety features in the off season. Doing research, it seems like signage such as no trespassing, no lifeguard on duty, etc. doesn't provide any owner protection. Any tips or tricks to help with pool ownership liability?
24:22 Speaker 02 So Dara, this is a great question. Last time we bought a home with a pool was 13 years ago and the insurer sent an inspector and they required that we put up a fence of a certain height that had the thingies on top that would make it painful for somebody to try to hop the fence. They were very, very particular about that. And the other thing that you may have a requirement from an insurance company now is they may want you to have one of those pool alarms. If you're not familiar with them, they sense
25:07 Speaker 02 that someone is in the pool and they set off an alarm. This is very, a wonderful safety device for parents of young children at a home with a pool. A kid may wander away from you or from a babysitter or from an older sibling and it prevents tragedy by that alarm going off. So it helps with liability and obviously the most precious thing, saving someone's life. But as a general rule.
25:39 Speaker 02 If you have a lot of assets, pool or not, you want to make sure you have a great amount of liability coverage. If you have a lot, a lot of assets, again, pool or not, you want to have an umbrella policy, which is an excess liability policy. But your insurer, insurers are becoming more and more unfriendly about pools. And so your insurer will likely help you with this by laying out requirements in terms of what safety features they find work the best that they'll want you to have with that swimming pool.
26:20 Speaker 03 Couple of fun ones to end the year, Clark. Jim in Michigan says, my wife and I have a four-wheeled carry-on bag that is in good shape, but just a little too large to fit the overhead bin on some airplanes. We need one that meets the 22 by 14 by nine inch limit. All bags we've looked at online seem to slightly exceed these specs in at least one dimension, including the Members Mark bag that Clark uses. Does that bag fit in the bins in all airlines he flies? Or is there another one that you recommend?
26:48 Speaker 02 The Members Mark bag fits with ease in every plane I've ever been in, except if I end up on a Canadian regional jet, these little commuter jets that are very uncomfortable for the bag and for you as a passenger.
27:05 Speaker 03 You put yours underneath on those, right? Aren't those your shillings?
27:08 Speaker 02 It won't fit.
27:09 Speaker 03 I mean, underneath the plane.
27:10 Speaker 02 Oh, what they do is you have to, you get a bag tag, if it's that size, on a Canadian regional jet. That's not an airline, that's a type of aircraft. And they give them to you at the jetway. You turn it in at the jetway and you get it back at the jetway when you land. But in terms of any traditional aircraft, that Members Mark bag that is now, if I remember right, $69, has been very durable and fits in every aircraft I've been on, anywhere in the world. So it's been good. Oh, if you are really freaked out, worried.
27:50 Speaker 02 When you look at dimensions, look at from baggage sellers, look at 20 by 14 by 9 instead of 22 by 14 by 9.
28:00 Speaker 03 And finally, Clark, this came in from Dee. I have been buying Kirkland brand toilet paper for years. In the past six months or so, my Tushy is feeling a little like they have taken out a lot of the softener from the very necessary product. Is it time for me to switch brands? Kirkland, meaning Kirkland Signature, Costco's.
28:21 Speaker 02 Signature, Costco's, private label toilet paper. And Krista, you tried the premium Kirkland Signature and you hated that one, right?
28:29 Speaker 03 Yeah, I mean, I can't believe they've made it worse.
28:31 Speaker 02 So, we don't use Kirkland Signature toilet paper in our house. We do have Members Mark toilet paper, which is Sam's Club private label. Nobody complains about the Members Mark. With toilet paper, it is a very personal thing. So if the Kirkland Signature toilet paper isn't working for you, believe it or not, you can take it back to Costco and they will refund your money, no questions asked, and try another brand. See what really is working for you.
29:08 Speaker 03 I like the Charmin Ultra. I get it at Costco when they have a sale. I'll stock up on it.
29:13 Speaker 02 It's an ultra-premium toilet paper.
29:15 Speaker 03 Well.
29:16 Speaker 02 Well, but if it works for you, it does. So my thing is always look for a private label that works. And if it doesn't work, then I try another private label. That doesn't work, then ultimately you get to a brand name. Do you know what private label has never worked for me?
29:37 Speaker 03 What?
29:38 Speaker 02 Oh, man.
29:39 Speaker 03 Soda?
29:40 Speaker 02 Yes.
29:40 Speaker 03 Oh, yeah.
29:41 Speaker 02 The private label soft drinks are disgusting. Why is it that no one has ever been able to make a soft drink that tastes as good as one from Dr. Pepper branded, or Coca-Cola branded, or Pepsi branded? That's my beef.
30:03 Speaker 02 But I have no problem with private label toilet paper. Just no KS toilet paper in our house.
30:10 Speaker 03 What about private label ice cream for you? Your other favorite thing?
30:13 Speaker 02 So I will eat Kroger's premium private label, which is Presidential Select. And I'll eat Aldi's premium private label. I forget what they call it. But they have just a few flavors in there in a pint. Oh, and I'll eat Trader Joe's ice cream sandwiches, which are fantastic.
30:35 Speaker 03 You have those on treat day?
30:37 Speaker 02 Only on Sunday. You know, don't only eat sweets on Sunday. But Dee, go on strike on the KS toilet paper. Try another, try another. You'll find the one that puts a smile on your face. One that I know a lot of people really like is one of the brands of Quilted Northern, the premium quilted northern, which is three ply, very expensive to buy, along with like your very expensive Charmin.
31:09 Speaker 03 Charmin Ultra.
31:10 Speaker 02 And it comes in a, it's got like a purple kind of label on the quilted northern premium, whatever they call it, three ply. So what a way to go into Christmas.
31:24 Speaker 03 Toilet paper, we all use it.
31:26 Speaker 02 We do?
31:26 Speaker 03 Yeah, and if you have family in your house this week.
31:28 Speaker 02 What about all these people that are buying these Toto toilets?
31:31 Speaker 03 Oh, that's true, that's true. No, I've got a lot of family in my house over the next two weeks and a lot of toilet paper will be used, I'm sure.
31:39 Speaker 02 Well, if you've got a lot of family, you've got a good plunger? When family comes to visit, always a good idea to have a plunger. So you don't know who will stuff a toilet. Is this enough toilet talk?
31:50 Speaker 03 Merry Christmas, happy Hanukkah.
31:54 Speaker 02 So a little giddy here because as soon as we're done here, we're on vacation till January 3rd. Now Clark.com and Clarkdeals.com, the salves are still working hard. You'll have new content all the way through.
32:12 Speaker 03 Newsletters.
32:13 Speaker 02 You name it, but the Consumer Action Center closed for the holidays, but we will be back with the podcast, as we told you at the very beginning, on January 3rd. Hope you have just a absolutely wonderful holiday season, the rest of this holiday season. Whatever you celebrate, enjoy yourself, have a very, very happy new year, and we will be back here with you on the podcast and the YouTube show on January 3rd. But remember, we'll have best of episodes for you running, so maybe you'll find one with really useful information that you just missed before.
32:55 Speaker 02 We'll have it for you and see you in 25.
33:03 Speaker 04 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5, only at McDonald's for a limited time.
33:15 Speaker 05 Pricing participation may vary. Promotion pricing may be lower than meal pricing.
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