How gold can help your Retirement
Finance | Retirement | Gold IRA | Article By: eBackers Staff Writers – 16th April, 2020
Everyone does their best to prepare themselves for retirement, but sometimes the best just isn’t good enough. There are a lot of factors that contribute to a successful retirement plan, so I want to show you how gold can play a role.
That’s why, today, I’ll be showing you everything you need to know about the benefits of using gold as a diversification tool in your retirement plan.
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I’ll be going over a lot of information, so I’ll break each positive aspect of using gold to diversify your retirement portfolio into different sections. This way, if you need to, you can skip around as you please.
Here is a breakdown of what I’ll be discussing today:
- How gold can diversify your portfolio
- How gold is a hedge against inflation
- How gold can mitigate risk
Now that you know what’s coming, let’s get right into it.
Using gold to diversify your portfolio
A lot of people are familiar with the fact that diversity in a portfolio is a great idea. Now, while this may be the case, people also believe that having a 401k and savings account is all you need. This can work, but it’s not always the best idea for everyone.
Retirement vehicles are all over the place. You can invest your money in something like a Roth IRA, traditional IRA, 401k, and even bonds or stocks. These will all provide you with a bit of portfolio diversification, but at the end of the day, sometimes it might not be enough.
So, if you’re someone who likes the idea of having more than less, it’s a great idea to spread your wealth out across multiple financial vehicles.
Think about it, you don’t want to put the wealth you worked hard to accumulate in one basket, right? What happens if the market tanks?
These are all questions that you need to ask yourself. Gold can be another vehicle for you, and push comes to shove, the more the merrier right?
Also, keep in mind that gold is not based on current market trends in the same way that paper money or traditional investment accounts are. This means that gold can be a saving grace for you if the market enters a depression or recession. I’ll have more for you on that later, don’t worry.
Using gold as a hedge against inflation
Gold can also be used as a hedge against inflation, which is very important when you consider retirement. Think about it, if the dollar has less buying power in the next decade, what does that mean for your money?
Luckily, gold is a great way to beat inflation in an easy way. The average return for gold being held in the market is just around 3-4%. Now, if that number seems small, check out what the inflation rate is. Over the last year, inflation was at around 2.8%. This means that even in a low year, gold is still going to beat the rate of inflation for you.
This means that you can comfortably invest in gold, and not have to constantly worry about where the dollar will be years from now. Also, one of the more interesting things to consider is how gold works against the dollar in this sense. If the value of the dollar drops, guess what happens to the value of gold? It goes up.
Having a gold IRA is a great way to make sure that your money is worth what it should be when it’s time to retire. Even if the dollar collapses, gold will still hold value. Compared to other market accounts, that’s definitely something worth considering for your retirement.
How gold can mitigate risk
A 401k or traditional IRA is a great retirement vehicle. They tend to be aggressive accounts that yield a high rate of return, and in doing so, allow your money to grow at a nice pace leading up to retirement. Plus, all of these accounts are able to grow tax-deferred.
Now, while this may be a really great thing, gold can actually do the same thing without any of the risks. This is due to the fact that gold IRAs have the same tax benefits as traditional IRAs, and this all comes without the risk. You don’t need to worry about the market as much, because precious metals tend to operate in a market of their own.
Keeping risk under control is a very important part of money management and retirement planning. If your money isn’t protected, you might not be able to retire when you want to.
I know that I threw a lot at you, but I just want to make sure that you understand how important gold is for your retirement. While there are plenty of other options out there, I think it’s definitely worth your time to consider looking into gold if you can. Otherwise, you might not get the retirement you know you deserve
If you ever feel a bit lost, or want to spread the good word about gold, please feel free to refer back to this article as a guide. I want to make sure you’re well informed, so now that there is no shame when it comes to going over everything more than once.
Now that you know the facts, do you think that gold is the missing link to your retirement?
The owners of this website may be paid to recommend Goldco Direct. The content on this website, including any positive reviews of Goldco Direct and other reviews, may not be neutral or independent.
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Frequently Asked Questions
Can my IRA hold anything other than gold?
Yes. Your new precious metals IRA is self-directed, and you have the authority to invest into any assets that you want. You don’t have to just allocate your funds to gold and other precious metals, you can also put them into stocks, cash accounts, mutual funds, and more. There are also other gold related investment products that you can invest your funds into.
Can my existing IRA be rolled over?
Yes, funds from an existing IRA can be rolled over to a precious metals IRA and you can do this as often as you want without having to pay penalties or taxes. You will simply need to set up the new IRA and then authorize the transfer of funds. Typically, the custodian of your new IRA will handle this and will work with your existing custodian to work out the transfer of the funds. IRA rollovers are subject to time limits and other restrictions and you may have to report it to the IRS. In order to avoid complications, be sure to get tax advice before you start the rollover process. Also, you can invest in gold with your 401(k).
What is the difference between a traditional a self-directed IRA?
A traditional IRA is controlled by a custodian or trustee. You must allow them to direct your funds into investments that they deem to be worthy. A self-directed IRA is where you get to choose where your funds are invested. You don’t have to follow the decisions of a custodian or trustee. The main benefit of the self-directed IRA is that you get to choose from stocks, bonds, precious metals, mutual funds, CDs, or other IRA-compliant investments.
How can I invest my IRAs into precious metals?
As long as your IRA is self-directed, you can simply direct some of your funds into precious metals. Most commonly, you can invest in palladium, platinum, silver, or gold. However, you must know that any precious metal, whether it be in coin or bullion form, must meet certain requirements of purity and refinement.
Can my existing IRAs be used to invest in precious metals?
Typically, yes. However, the final decision is left to your current custodian or trustee.
Is it OK to have more than one IRA?
Yes. There is no limit on how many IRAs you can have at once, but there are limitations on the total amount you can invest annually into IRAs. In December 2011, if you were under 50, you can contribute up to $5,000 per year in all IRAs. If you were over 50, you can invest up to $6,000 per year.
What is an IRA?
An IRA, or Individual Retirement Account, is a savings plan for your retirement that has been designed specifically to provide tax advantages to individual investors such as tax-free or at least tax-deferred growth of earnings. There are several different types or IRA accounts- all of which have different rules that govern the mimimum withdrawal age, annual limits on contributions, and others. Most commonly, IRAs are used to supplement an employer’s 401(k) account and typically will be the majority of your investment portfolio.