Questions that concern most retirees: Are we heading into a recession and what does this mean for the future of my retirement investments? Many pundits who say we are headed for a recession point to several factors: negative two-quarters of GDP, a slowing housing market, aggressive rate hikes, rising interest rates, a volatile economy and geopolitical chaos. . A recession could mean delaying your retirement or finding a part-time job to make up for the loss. So what can you do to protect what you have so you can take that trip to Italy, winter in the tropics, or spend time doing whatever you want to do? Unfortunately, there is not a solution for everyone. But there is one option to consider: precious metal IRAs, also known as gold IRAs.
What is a Gold IRA?
In the simplest terms, a Gold IRA is a self-directed IRA that gives you the ability to invest and hold gold and other precious metals as investments. You can still enjoy the same tax benefits as a regular IRA account. You can use pre-tax dollars like a traditional IRA or after-tax dollars like a Roth IRA. You can also consider your 401K rollover account.
How do you add a Gold IRA to your portfolio?
The main difference between traditional IRAs and Gold IRAs is that you must use a precious metals provider like Goldco to help you buy your gold IRA. Once you’ve decided how to fund this new IRA, you can choose between gold, silver, platinum, and palladium. The precious metals are then shipped to an independent insured custodian who holds the metals on your behalf.
In order to decide if this is right for you, let’s take a look at how gold and silver compare to the purchasing power of the US dollar over time. In times of high inflation and market volatility, investors often turn to physical assets such as gold and silver to cover their wallets.
“Even though the United States moved to a fiat currency system (deriving its value from regulation) in the early 1970s, many investors continue to use gold as an investment to hedge against inflation, currency weakness and other economic disruptions.
Between 2008 and 2012, the value of gold increased dramatically, as evidenced by the 101.1% rise in the Producer Price Index (PPI) for gold. As former Federal Reserve Chairman Ben Bernanke said, gold prices can act as an indicator of the health of the economy. A rise in the price of gold can be a signal that the economy is in trouble. Consequently, in times of crisis or inflation, many investors turn to gold to protect their capital. In contrast, during times of economic stability, investors are more likely to turn to more speculative investments, such as stocks, bonds and real estate. During these periods, the price of gold often drops. (US Bureau of Labor Statistics)
“Over the past 15 years, gold has outperformed the stock market. Over the 15 years from 2005 to 2020, gold has risen 330%. Over the same period, the Dow Jones Industrial Average no rose only 153%.Over the past two years, 2021-2022, gold has outperformed equities due to global inflation and geopolitical uncertainty. (Investopedia.com)
“Gold is a tangible asset that anyone can own and hold, and it can provide stability against inflation, financial turbulence and economic downturns.” (Goldco.com)
Should you invest your entire portfolio in a Gold IRA?
To help you diversify your retirement savings, advisors may recommend a combination of traditional investments and alternative investments such as physical gold and silver. Stocks, bonds, and IRAs are all popular options. If you are looking for something to add to your portfolio, precious metal IRAs are another option.
Who Should Consider a Gold IRA?
Although anyone can invest in gold and other precious metals, there is a sweet spot. Anyone 59.5+ and those with $50,000 or more to invest are great candidates for explore golden IRAs.
What are the IRS rules for a Gold IRA?
The IRS limits the commodities you can invest in. The good news: gold, silver and other precious metals are the ones you box invest. However, there are some rules you need to know.
IRS Rules for Gold IRAs
The Internal Revenue Service has two main rules for holding physical gold and silver in an IRA. The precious metals you select must meet certain specifications. They must be 99.5% pure, produced by an authorized mint, in their original packaging and may require a certificate of authenticity. If you invest in coins, they must be out of circulation and undamaged.
The second rule is that you cannot have the gold in your possession. It must be stored in an IRA-approved repository. Your IRA gold custodian can help you set it up.
You have the same limits as you would for a traditional or Roth IRA. You can invest $6,000 per year or $7,000 once you reach age 50. Once you reach age 59.5, you can make withdrawals. If you withdraw before this age, you could face a 10% penalty. Required Minimum Distributions (RMDs) must be taken from age 72.
Another IRA option is a rollover account. You can use funds from defined contribution accounts like a 401(k), 403(b) or savings plan. First, you need to determine how much you want to roll over in a precious metals IRA. Then, you must make the transfer within the set deadlines to avoid incurring a tax liability (find out more here). You also have no contribution limit with this type of account.
What are other considerations when choosing a Gold IRA?
You cannot keep your gold at home or in the bank. You have to pay a caretaker to store it and insure it. Charges vary as a percentage of the investment, or some custodians charge a flat fee regardless of the investment. Fixed fees can vary between $250 and $375 per year. Regardless of their pricing structure, some precious metals suppliers, like Goldco, can buy them back from you when you’re ready to sell.
Why You Should Choose Goldco for Your Gold IRA
Goldco helps people invest in precious metals for over a decade. They have successfully invested over $1 billion in precious metals. Goldco helps facilitate the process of adding a precious metals IRA to your existing portfolio or purchasing gold, silver or other precious metals with cash savings.
“I believe there is always a good time to invest in gold and silver,” says Trevor Gerszt, CEO and Founder of Goldco. “When markets are down, precious metals tend to go up in value. When markets are more stable, precious metals continue to steadily grow in value. Precious metals are my passion and Goldco is committed to helping owners of precious metals protect their wealth.
When it comes time to sell your gold, goldco will buy back your gold at the highest price. This is part of their warranty.
It’s also a good time to invest in a Gold IRA or buy gold and silver with your retirement savings account, as Goldco is currently offering 10% cash back on all eligible accounts.
goldco has an A+ rating from the Better Business Bureau. They are also AAA-rated by the Business Consumer Alliance, have earned over 2,500 five-star customer reviews, and have been recognized as the 2022 Stevie Awards Company of the Year, as well as one of the fastest growing. by the INC5000.
While this investment may not be for everyone, it’s definitely worth looking into right now, especially if you’re ready to diversify some of your retirement investments.