Today we shall take a look at gold retirement IRA planning. This has been a hot topic in the recent past, more so with the changes in the state of the global economy that have forced investors to rethink their investment strategies. In today’s post, we shall see how you can go about adding gold to your retirement portfolio for it to present you with maximum benefits. If that sounds interesting to you, read on to find out more.
See my top-5 list of Gold and Silver IRA solutions here
The Shifting Gold Price
Gold prices per ounce have ranged from $255 about 2 decades ago, to $1937 in 2020. In the short-term horizon, there are some investors who have had to deal with significant losses, but overall, this yellow metal has had an impressive long-term increase in value.
With this knowledge in mind, some investors have turned to an investment vehicle known as a gold IRA, which allows them to purchase and hold physical gold over a long-term investment horizon.
A gold IRA also allows investors to purchase and hold other IRS-approved precious metals such as silver, platinum, and palladium. This is unlike what most investors are used to with regular IRAs, where they can only hold paper assets such as cash, stocks, and bonds. The possibility to use gold in an IRA was made possible by the signing of the 1997 Act in the US Congress.
Gold IRAs: Growing trend
Gold IRAs have appealed to investors in the present-day world, more so those who are out to diversify their retirement investment portfolio. Historically, the prices of gold have been seen to move in the opposite direction of stocks and other paper assets. This has made the gold IRAs a viable insurance policy against inflation. Having gold in your retirement investment portfolio can as such smooth out the risks, moreso over the long-term horizon.
Before the occurrence of the 2008 financial crisis, most investors avoided investing in gold, citing the complexity of the processes required to open a gold IRA. That has however changed in the recent past, with most people realizing that opening a gold IRA can be as simple as:
- Finding a custodian for the IRA along with an IRS-approved depository
- Purchasing IRS-approved gold and other precious metals
- Having the precious metals transferred to the depository
- Check the accounts and statements to see how your investment is doing with time.
With the 2008 financial crisis having robbed many investors of their savings, we have seen a record number of gold IRA openings, as well as a significant increase in the total amount of gold purchased. This strong interest in gold in the last half-decade or so has been a result of the continued inflationary effect of the Federal Reserve’s stimulus programs, and a sharp increase in geopolitical tension.
***Gold in War | What is it good for? | Hedge against inflation
So what is the main thing you are required to do in gold retirement ira planning? You’ll find out about that in the next section
Gold Retirement IRA planning: Finding the right custodian
It may not seem like much of a strategy, but you need to find the right custodian if you are going to succeed as a gold IRA investor.
To start investing in gold through an IRA, you need to establish a self-directed IRA, which is a unique type of IRA that allows investors to manage their assets directly and also invest in a wide range of assets ( more than those permitted by other types of IRAs). For a gold IRA, you need a custodian to create and oversee or administer your account. The custodian will also be charged with ensuring that the physical gold is properly stored.
Gold IRA custodians are usually specific financial institutions that have been approved by the IRS to offer custodial services to investors. They do not partake in the selection of precious metal dealers for their gold IRA clients. This is solely the investor’s responsibility. Most established custodians, however, have relationships with many precious metal dealers and are usually more than willing to share their list.
It can also work the other way round, where the precious metal dealers can recommend a gold IRA custodian to you. The final choice lies with the customer, who also has the right to choose their preferred custodians.
Choosing the right company to turn to can be quite complicated since the investor has to do their homework to find out which company is most efficient for them. Here are some top factors that are worth considering:
By knowing all your costs upfront, you can avoid a scenario in which you run into very unpleasant surprises, such as hidden fees right after you invest.
You should only deal with a company that is licensed to offer gold IRA solutions. This, therefore, calls for you to check whether the company you are eyeing has registrations, insurance, as well as bonds to safeguard your assets. Do not shy away from asking for the verification of such licenses and other relevant information.
It is always wise to look for a company with a proven track record and an outstanding reputation. You can access such information from platforms such as Better Business Bureau, Business Consumer Alliance, or TrustPilot. It may be helpful to check what customers say about the firm you are interested in, especially the nature of the complaints filed. Another thing to be on the lookout for is whether the company is educational and not merely pushing a hard sell.
The company you are eyeing should have its operations structured in such a way that it accommodates your unique needs as an investor, as opposed to one that requires you to pick up a one-size-fits-all plan. Every investor has unique investment expectations, and the company they work with should not significantly impact their initial plan. Instead of settling for the solutions offered by a certain company due to their ability to convince you, let it be as a result of establishing that the company in question has your best interests at heart.
More interesting reads for you:
- What Should I Consider When Opening a Gold IRA? 4 Key Things
- Benefits Of a Gold IRA? | Top-5 Advantages To Consider!
- How do I Fund my Gold IRA? & Gold IRA Basics You Should Know
Frequently Asked Questions for “gold retirement (IRA) planning”
1. Fees charged by custodians?
The fees charged by gold IRA custodians vary greatly. They may generally be higher than those charged by regular IRA custodians, but this is due to the fact that gold and other precious metals held in a gold IRA are quite valuable. This is something worth factoring in in your gold retirement ira plan.
2. Who can hold my hand as I start investing in gold through a gold IRA?
If you are new to investing in gold, then all you need is to work with a gold IRA solution provider that prioritizes education over pushing a hard sell. With such a company, you can be sure that you will receive sufficient resources to help you understand the gold investment terrain. Most companies offer education and IRA toolkits for free, so you have nothing to lose anyway. All you need to do is study the materials presented, ask the IRA experts in the company as many questions as you can, then get started with the surety that you understand what you are getting yourself into.
Here are some gold IRA solutions worth checking out.
3. Where do I purchase the gold from?
There are many precious metal dealers that you can purchase from, both locally and online. You may need to do extensive research about the reputation and legitimacy of the dealer, to avoid losing your money to a scammer.
Here are a few top suggestions to get you started in your search for a reliable gold dealer.
4. When will I be allowed to take the gold from my gold IRA, for sale?
According to the IRS gold investment regulations, you are prohibited from taking withdrawals before you are 59 ½ years old. Upon crossing this age, you can withdraw your gold without being assessed for extra taxes and penalties. It is a good idea to consult a tax expert before making such a move, to get a clear picture of the tax implications.
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That will be all for today’s post on gold retirement ira planning. Thank you for having read through till the end. I hope that you found it helpful and that you will move forward with new knowledge on this subject. Let me know if you have any questions- drop them in the comments section and I will get back to you ASAP!
I wish you well,
Eric, Investor and Team Member at Gold Retired!
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