The questions on most retirees’ minds: Are we headed for a recession and what does it mean for the future of my retirement investments? Many experts who say we are headed toward a recession point to several factors: two-quarters of negative GDP, the housing market slowing down, aggressive rate hikes, rising interest rates, a volatile economy, and geopolitical chaos. A recession could mean delaying your retirement or finding part-time work 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 what you want to do? Unfortunately, there is not one 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 receive the same tax benefits of a conventional IRA account. You can use pre-taxed dollars like a traditional IRA or post-tax dollars as in the case of a Roth IRA. You might 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 purchase your gold IRA. Once you’ve decided how to fund this new IRA, you can choose from gold, silver, platinum, and palladium. The precious metals are then shipped to an independent insured depository that holds the metals in your name.
How Do Precious Metal Investments Perform Compared To Traditional Investments?
In order to decide if this is right for you, let’s take a look at how gold and silver compare to the buying power of the U.S. dollar over time. During times of high inflation and market volatility, investors will often turn to physical assets such as gold and silver to hedge their portfolios.
“Even though the United States transitioned to a system of fiat money (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 is evidenced by the 101.1-percent surge in the Producer Price Index (PPI) for gold. As former Federal Reserve Chairman Ben Bernanke stated, gold prices can act as an indicator of the health of the economy. A rise in the price of gold may be a signal that the economy is struggling. As a result, in times of either a crisis or inflation, many investors turn to gold to protect their principal. By contrast, in times of economic stability, investors are more likely to turn to more speculative investments, such as stocks, bonds, and real estate. During these times, the price for gold often declines.” (U.S. Bureau of Labor Statistics)
“Looking at the last 15 years, gold has outperformed the stock market. In the 15 years from 2005 to 2020, gold increased 330%. During the same time the Dow Jones Industrial Average increased by only 153%. During the last two years, 2021-2022, gold has outperformed stocks due to worldwide inflation and geopolitical uncertainty.” (Investopedia.com)
“Gold is a tangible asset that anyone can own and hold, and it can offer stability against inflation, financial turmoil and economic downturns.” (Goldco.com)
Should You Invest Your Entire Portfolio In A Gold IRA?
To help diversify your retirement savings, advisors may recommend a mix of traditional investments and alternative investments such as physical gold and silver. Stocks, bonds, and IRAs are all popular options. If you’re looking for something to add to your portfolio, precious metal IRAs represent another option.
Who Should Consider A Gold IRA?
While anyone can invest in gold and other precious metals, there is a sweet spot. Anyone 59.5 and older and those who have $50,000 or more to invest are great candidates to explore gold IRAs.
What Are The IRS Rules For A Gold IRA?
The IRS limits which commodities you can invest in. The good news: Gold, silver, and other precious metals are ones you can invest in. However, there are some rules you need to be aware of.
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 have to meet certain specifications. They must be 99.5% pure, produced by an accredited mint, in the original packaging, and may need to have a certificate of authenticity. If you’re investing in coins, they should be uncirculated and damage-free.
The second rule is that you cannot have the gold in your possession. It must be stored in an IRA-approved depository. Your gold IRA custodian can help you set it up.
You have the same limits as you would a traditional or Roth IRA. You can invest $6,000 yearly or $7,000 once you reach the age of 50. Once you reach 59.5 years old, you can make withdrawals. If you withdraw before that age, you could face a 10-percent penalty. Required Minimum Distributions (RMDs) must be taken beginning at 72.
Another IRA option is a rollover account. You can use funds from defined-contribution accounts like a 401(k), 403(b), or thrift savings plan. First, you have to determine how much you want to roll into a precious metals IRA. Then, you must complete the transfer within set deadlines to avoid incurring a tax liability (read more here). You also do not have any contribution limits 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 must pay a custodian to store and insure it. The fees range as a percentage of the investment, or some custodians do a flat fee, no matter the investment. The flat fee can range between $250 and $375 per year. Whatever their fee structure, some precious metals providers, like Goldco, may buy it back from you when you’re ready to sell.
Why You Should Choose Goldco For Your Gold IRA
Goldco has been helping people invest in precious metals for more than a decade. They have successfully invested more than $1 billion dollars 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 that there is always a good time to invest in gold and silver,” says Goldco’s CEO and founder, Trevor Gerszt. “When markets are down, precious metals tend to rise 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 people with precious metals ownership to 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 guarantee.
Right now is also a good time to invest in a Gold IRA or purchase gold and silver with your retirement savings account as Goldco is currently offering 10% back in silver to any qualifying accounts.
Goldco has an A+ rating from the Better Business Bureau. They are also AAA-rated by the Business Consumer Alliance, have earned more than 2,500 five-star customer ratings, and were recognized as the 2022 Company of the Year by the Stevie Awards as well as being rated as one of the fastest-growing companies by the INC5000.
While this investment might not be for everyone, it is definitely worth looking into right now, especially if you’re ready to diversify some of your retirement investments.