The Yield Ladder, HSA Stacking, and When to Take the Pension

In a recent episode of Ask An Advisor, Wes Moss found himself in an unusual position: sharing a headline with Jim Cramer that made him sound like he was chasing dangerous high-yield stocks. The headline read "Cramer says high yields are dangerous. Wes Moss says that's where retirement income lives." But as Moss explains, the problem is the word "yield" itself — it's a catch-all term that can mean anything from a 1.25% S&P 500 dividend to a 5% U.S. Treasury bond. "When you hear the word yield, it is a percentage an investment is paying you," Moss says. "But a yield can be from a rental property, a dividend from a stock, or the interest rate of a bond." The distinction matters because Moss's "yield ladder" approach doesn't advocate for risky stocks yielding 6-8%. Instead, it maps different income sources to different rungs: stocks for 1-4% yields, then bonds for 5% and above. "To get a 5% yield now from a bond is not stretching and is not in the danger zone at all because these are U.S. government treasury bonds," he says. The headline, he argues, conflated apples and oranges.

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