The Clark Howard Podcast
02.11.25 Ask An Advisor With Wes Moss
Feb 11, 2025
Wes Moss, a CFP® and fiduciary financial advisor, dives into crucial financial decisions related to pensions and investments. He provides a simple method for choosing between a monthly pension and a lump sum, emphasizing the 6% test and inflation's impact. Wes shares insights on investing during high market periods, challenging the fear of peaks. He also tackles listener questions on investment strategies, exploring Vanguard funds and tax implications for inherited IRAs. This engaging discussion offers valuable tips for navigating financial waters with confidence.
38:22
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Quick takeaways
- The decision between a monthly pension and lump sum payout relies on the '6% test' to evaluate long-term financial advantages.
- Investing during all-time high market periods can lead to higher returns, challenging the common fear of potential losses at peak levels.
Deep dives
Pension Decisions: Lump Sum vs. Monthly Payments
Choosing between a lump sum and monthly pension payments can be a complex decision influenced by various factors. It is crucial to evaluate the monthly amount offered against the lump sum option using the '6% test.' If the monthly payment amount divided by the lump sum equals 6% or more, the monthly option may be more advantageous due to its guaranteed nature. Additionally, consider the implications of inflation and other potential income streams, as a higher monthly pension can provide stability that a lump sum doesn’t.
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