What should I consider when opening a gold IRA? Are there some rules that I need to know before accepting the terms and conditions of a gold IRA? With the knowledge that a gold IRA is gradually becoming a necessity for investors of all walks, you must get everything right as you set up your account so that you do not end up getting frustrated for having ignored some important factors. In this article, we shall highlight a few items that you must consider as you get started. Read on to discover more.
What is a gold IRA?
We shall start by defining what a gold IRA is just to be sure that we are on the same page. If you own a few pieces of gold or gold items that you have in your home, then you do not have a gold IRA. You may be endangering yourself by storing gold at your home, since you may end up attracting thieves, who never pass on the chance to steal high-value items such as precious metals.
A gold IRA is an individual retirement account that allows account holders to invest in precious metals such as palladium, platinum, gold, and silver, as they head towards their retirement years. Gold IRAs are typically self-directed IRAs, in that despite the transactions of these IRAs being overseen by a custodian, the managerial work is left to the account holder. This means that if you own a gold IRA, then you can make the key investment decisions, such as how you will reallocate your investment funds.
Also, self-directed IRAs allow their owners to invest in other non-traditional assets which include real estate, promissory notes, cryptocurrencies, etc.
Why more people are investing in gold through gold IRAs
Investing in gold, as it has come up from decades’ long trends, is one of the best ways to diversify your retirement investment portfolio. This is an important investment aspect that you should always consider, more so since paper currency is always in flux.
Inflation influences the buying power of paper money, and it does that negatively. Moreover, the price of gold always increases when the buying power of currencies decreases. Without gold in your portfolio, you’re most likely to lose a big chunk of your investment capital when an economic downturn occurs.
Also, the popularity of gold has been influenced by the occurrence of the 2008 financial crisis, which made people realize the essence of having a safe haven to fall back on when the stock market crashes.
What should you consider when opening a gold IRA?
If you want to give yourself the peace of mind that comes from knowing that you can weather the tough economic storms, then you should consider opening a gold IRA. At the time you are opening your account, you will need to consider a few things, which I think will make such a huge difference between you walking into your retirement years a sad person, or with a broad smile on your face. Here are some main factors to consider when choosing your go-to gold IRA company:
The reputation of the company
Some investors like to downplay this factor, more so after they read about what the company in question has to offer. They end up believing the promises given, instead of the numbers that show the reality of the matter. Do not be like such investors.
You should, instead, do your due diligence, and ascertain that other customers are also happy with what the gold IRA service provider (custodian) in question is offering. The reviews given by customers on consumer trust sites such as the Better Business Bureau, Business Consumer Alliance, Trustpilot, and Trustlink should be a good starting point to verify a company’s trustworthiness and professionalism.
When opening a gold IRA, you should expect to pay some fees such as account setup fees, maintenance fees, and storage fees. These fees may be higher than those charged by traditional IRA service providers, but this does not mean that you now have to get ready to part with a large amount of money. You will discover that there are companies that offer quality services without overcharging their customers. Also, some of these fees are one-time fees, so the thought of having to get charged a lot of money should not scare you into thinking about giving up on gold investments.
Type of investments offered
Despite your main interest, at the moment, being gold, it would not hurt to choose a service provider who also allows investors to invest in other types of alternative/ non-traditional assets. This is because you may need to diversify your portfolio in the future when new opportunities open up.
In the present day world, for instance, new cryptocurrency investment opportunities are coming up, and it would be a great thing for you to have the opportunity to add these digital assets to your portfolio without having to open a new IRA.
Note that a gold IRA is a self-directed IRA, so it presents you with the opportunity to add more assets at will, provided that you’re sticking to the set terms and conditions.
Finally, you should consider opening a gold IRA with a company that takes customer education seriously. If, for instance, at the time of opening your account, you do not receive a free IRA guide, or a free consultation process, then that may not be the best company for you.
The gold investment space is quite different from the paper asset investment space, owing to the unique properties of gold as an asset. You need to know what you’re getting yourself into, so that you do not regret your decision in the future, and blame it on the lack of sufficient knowledge. Take the time to request educational resources before spending even a single dollar on gold.
If you’re ready to open your gold IRA today, check out these recommended gold IRA service providers below:
Thank you for making it to the end of this article in which we have addressed the question, “what should I consider when opening a gold IRA?”. I hope that you found it helpful and that you now know what to consider before you whip out your checkbook to purchase gold bullion. Let me know if you have any questions or concerns concerning today’s topic –drop it in the comments section so that I can get back to you ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!