Given the possibility of huge financial gains in an unstable stock market, it’s important to compare this possibility against that of investing in a gold IRA. If you know the market to a reasonable degree, some experts argue, why not take the risk? Given the financial chaos that has descended on the world’s financial markets since the start of the Covid-19 outbreak, its more important than ever to make good investment decisions that are safe, sound and secure.
As a result, gold has come to the forefront as one of the best possible investments, and a gold IRA is considered an especially good choice given the current world economy.
It’s easy to see why people are scared. Countries around the world are in economic jeopardy, even the United States, which is carrying a debt of $17 trillion as the federal deficit balloons to nearly $1000 billion.
But a gold IRA can help. Gold IRAs aren’t just backstops-many investors are using them to accumulate wealth, and they’re an excellent vehicle for this financial goal as well.
Why the Value of Gold is Timeless
There are several good reasons why gold is considered so safe. One of the primary ones is that gold has been used as a value standard and a reliable form of currency for centuries. Unlike paper money, gold almost always maintains its value during an economic crisis, and it tends to resist the ravages of inflation.
One of the best examples of this is the last twenty years of financial history. While paper money products such as stocks, bonds and mutual funds have been incredibly volatile, with many getting completely wiped out, the value of gold and silver has grown by more than 400 percent.
To validate this, let’s do a simple comparison: gold vs. the US dollar. Gold, which is a precious transition metal, has a 5000-year history of stability as a form of money, while the dollar is losing value every day. There’s a reason the US government backed the dollar with gold back in 1971 when inflation started to grow, and that reason remains just as valid today as it was back then.
4 Facts About Gold IRA Storage
Why Invest in Gold IRA?
Now let’s update the previous comparison. Part of the reason dozens of countries, including the US, are facing a financial crisis is that they printed their currency on an as-needed basis without backing it up with gold. This decreases the value of the currency, which in turn reduces the confidence of both investors and the population at large.
Many countries respond by printing more currency, which sometimes works on a short-term basis, but without a standard like gold to fall back on it’s a dangerous solution. It’s also part of the reason why the value of gold tends to increase as the value of any currency, even the dollar, decreases.
How to Make the Gold IRA Investment?
While most people are aware that gold can be a great investment, many simply don’t know how to how to do it. Obviously, you can’t manufacture gold, nor can it be via a computer program. You have to do a bit of homework on the methodology that’s involved, so let’s start by delving into some of the more important background material.
So what is a gold IRA, exactly? As it pertains to a retirement account, a gold IRA account holds approved coins and precious metal bullion rather than paper investments, with these metals held by a third party on your behalf.
The exact composition of a gold IRA account is an interesting side note.
Right now, the metals that can be used for this kind of IRA include multiple precious metals, including gold, silver, platinum, palladium, Australian Gold Nugget coins, Canadian Maple Leaf coins and American Eagle coins. All of these coins can be used for what’s called Self-Directed Gold Coins IRA once you open a gold IRA account.
It is this range of currency that helps make the gold IRA so stable. It’s considered the purest form of money, and the coins themselves are an asset whose worth can be proven in any economic circumstances. No government or individual can devalue their worth, regardless of what’s happening in the world economy.
What are the Benefits of an IRA Gold Investment?
In the US, members of the so-called “baby boom” generation can count themselves lucky, in part because they have several safe options to ensure a happy retirement.
The gold IRA is considered one of the best. The IRA-which stands for individual retirement account, of course-is an ideal vehicle to enhance and use the wealth that members of the baby boom generation have accumulated through their working years.
The stability of an IRA is another significant advantage. It helps convince different financial institutions to put these earnings into ventures that are sound and viable. The profits guarantee that those investing in the IRAs will be able to cash in, and the stability of this whole system guarantees the viability of the IRA for years and decades to come.
So why invest in a gold IRA?
The answer to this is relatively simple. Profits generated by IRAs are influenced by the value of the dollar, and that value is constantly fluctuating. Some experts think the possibility that the dollar could destabilize is the highest its been since the Great Depression. That means that the risk that comes with any financial investment must be carefully analyzed to a greater extent than ever.
Simply put, a gold IRA minimizes that risk. The fact that the value of the IRA is based on gold coins or bullion rather than the dollar means it’s difficult to destabilize. Yes, the value of gold will fluctuate and perhaps even devalue periodically, but as a general rule the overall value of gold is constantly rising.
Moreover, gold investments are common around the world, which makes it easy to purchase gold coins with this kind of IRA using a transfer or a rollover.
What You Need to Know
So what are the considerations that must be taken into account when purchasing a gold IRA? For starters, your overall IRA portfolio should be diversified to some extent, which means you’ll need to have the proper balance between precious metals, CDs and stocks. This balance is necessary to ensure safe growth, with the gold IRA offering a foundation of sorts when it comes to safety and security as your investment portfolio grows in wealth.
The next important consideration with a gold IRA is to find a good firm to help you purchase the IRA and define the financial terms. The investment counselor you work with should be associated with a financial group, and that person should ideally have extensive experience with gold investments in general and gold IRAs in particular.
Be sure to check the references of this person, and check the background of his or her clients, as well. The reputation of both the firm and the investment counselor must be verified, and you’ll need to get a thorough rundown on any fees and charges that may be associated with the gold IRA.
Do some comparison shopping on this aspect, and don’t shortchange yourself in the amount or the quality of the research you do.
Another thing you’ll need to check on is the gold IRA tax rules, and a gold IRA does well in this area as well. As a general rule, there are minimal tax consequences, and for the most part investors aren’t even required to disclose how much gold is in their accounts. In addition, there are rarely any penalties when you got to make tax payments or do a gold IRA rollover.
Another tax benefit of a gold IRA is that you have access to tangible, physical gold, which means you increase your physical holdings to further lower your tax burden. Look for a gold IRA in which the setup charges are low and the process of changing the terms is easy, and be aware that you can own more than one gold IRA account.
Finally, be aware of the benefits of a gold IRA as they pertain to your individual situation. A good investment counselor can help you make a plan to figure out where a gold IRA fits in, then make it happen in a way that increases even after you’ve left your current job or stopped working entirely.
Embracing the Gold IRA
Given the current world financial crisis, many Americans, older and otherwise, are turning to gold IRAs as a way to help stabilize and grow their wealth.
They see the issues with fuel prices, a shaky economy and government debt, and they want to avoid the instability of these things as much as possible.
There’s another factor playing into this movement toward gold IRAs. If you have already have an IRA, you may be able to take advantage of a 1997 financial act that makes it possible for you to invest in gold coins or bullion as part of your IRA account.
Due to its ongoing stability, many investment experts refer to gold as a “crisis commodity” that can be especially useful during hard times and economic instability. These conditions include inflation, war, crumbling currencies and bank crashes, and several of these are already present in today’s world economy. It’s a proven fact that whenever these conditions occur, precious metals such as silver and gold tend to increase in value. As a result, many people are turning to gold IRAs.
The reason for this goes back to the nature of the instability in the market itself. The more the financial markets become unpredictable, the more the chance of getting rich in the market becomes the financial equivalent of hitting the lottery. You might be lucky enough to be the chosen one, but the odds are seriously against it.
With a gold IRA, though, there may be financial hurdles to overcome regarding the levels of the gold reserve, and this may take its toll on the markets. But the effect of all this will invariably be larger on stocks and bonds than it will on vehicles like the gold IRA. One the major benefit is the peace of mind that comes with a gold IRA. Imagine knowing that your retirement will be both relaxing and enjoyable, in large part because your gold IRA not only won’t lose value but will likely earn you considerable profits.
All of this goes back to the tremendous power of gold as an investment, and the history that demonstrates that power. The dollar may fall to unprecedented lows, but gold investment and a gold IRA can help you avoid much of the risk and uncertainty that would undoubtedly come with that.
Some Final Considerations
But what about the high demand for gold IRAs? With more and more people becoming interested in them, it’s valid to ask what impact that will have on their value.
The answer to that question is simple: it will make them stronger. Having more people buy and back gold will ensure that its value stays high, but you should still consult an investment counselor to assess your individual risks and come up with a plan to mitigate them if necessary.
Also, keep in mind that gold isn’t the only precious metal that’s drawing financial interest. The value of other precious metals such as silver and platinum will likely increase, and this in turn will only make the gold market more stable.
Once again, though, its important to get sound financial advice when you choose a gold IRA. There are many companies and investment counselors available to help you with this process, but its important to do extensive homework and research. Make sure you know all the facts and possibilities along with the risk factors, and make your choices accordingly.
Get sound advice and tips, and keep your risk low and your investments simple in the beginning. Also, get the paperwork validated by a lawyer as well as a financial expert, and make sure your expectations are reasonable.
To sum up, you can easily double your net worth by getting into gold savings and a gold IRA right now, but make sure you have a sound financial strategy that will put you on the road to wealth and success.