All the financial news fit to print

One of the most popular money websites is Yahoo! Finance. Its popularity is undoubtedly due to up-to-the-minute stock market coverage, investing commentary, and articles covering a wide range of financial topics. Plus, it has been around forever. One recent article caught my eye, the title was: “Here is the average income for retirees in the US — how do you compare?” So, seemed like it could be an enlightening read for someone who is retired. As I started reading, I immediately saw the article's real purpose. Before the first sentence was the following notice: “Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.” Ah, so the purpose is to sell something mentioned via clickable article links.

I started to read and then, bam - 3 ads to buy gold and silver. Ok, they need ads to pay for the free article, I get it. The article goes on to highlight the impact of inflation on retirees. Yes, I agree with that. Social Security is not keeping up. Yes, agree with that too. Finally, I get to the news from the headline. The article then stated the average weekly earnings, which add up to $62,296 per year for those aged 65 and older. Wait a minute. Is that for retirees over 65, or for everybody over 65, since a good percentage are still working? Doesn’t say.

The article then switches to “what else can you do to ensure you have enough money for retirement” and suggests that gold can be a potential “safe haven” to mitigate the impact of inflation. It goes on to state that gold has increased in value “sevenfold” over the last 100 years. They don’t mention how that compares to inflation over the past 100 years, or real estate, or the stock market. Instead, it mentions companies that can convert an existing IRA into a gold IRA. Ah…there’s the reason for the commission statement before the article.

The lesson here is quite simple. Anytime you read something promoted as news that leads you to a recommended company that can assist or solve the problem, be suspicious of the statistics or facts presented to make the case. It doesn’t take much research to find out that stocks have far outperformed gold over the past 100 years. It’s true that most retirees’ investments need to at least keep pace with inflation, and gold has done quite well compared to other investments during specific periods of time, like recently. When times are uncertain, gold typically rallies as investors seek stability. The U.S. 10-Year Treasury note (i.e., bond) is another safe haven, as global investors view the U.S. as best positioned to withstand economic damage, and it is currently paying 4%. Of course, sophisticated investors also recognize that these safe havens are more than just that; they’re likely to appreciate in the short term due to increased investor demand.

Back to what caught my eye in the headline, “average income for retirees”. A quick search yielded three answers: $54,000, $83,950, or $62,296. Then, in one of these links, it stated that half of all Americans age 65 or older live on less than $25,000 a year. Clearly, it is not an easy question to answer. I came away with three thoughts. First, we always have to remember that statistics are used to support a position or confirm an assumption (in this case, the article never connected the statistic cited to anything except the gold IRA). Second, we must be careful when projecting any statistic to our situation. An average retirement income statistic is meaningless to any of us individually. The range of incomes that can provide an adequate retirement is quite broad, given where and how people live. And while more is better than less, at the end of the day, you have what you have and will spend it wisely or foolishly.

Finally, my last thought was that generating an income of $54,000 or $83,960 a year will require significant savings, since the average Social Security check provides only about $24,000 a year. That shouldn’t be news to anyone; it should serve as a reminder to save enough for retirement. An article with that headline should have guided readers to understand that income requires savings, and savings must be invested to produce income, and investment income is not the same as investment value. And for retirees, their income needs to increase to keep pace with inflation. I’m not sure how a shiny block of metal sitting on the table provides income, but I’m sure their sales pitch says it does.