August 10, 2018
Most investors have a financial goal for retirement. This includes tucking a set amount of cash into your nest egg each month. Yet some investors don’t earn enough to meet the targets.
Subsequently, you need to build a retirement portfolio that will work for you and accrue income whilst you sleep. Sadly, the employers 401(k) retirement plans won’t do that for you.
A report published by Hello Wallet revealed the majority of Americans were creating debt rather than stocking up their 401(k). The average worker in the US contributes 10.9% to 12.9% to their pension fund.
As a result, most people reach retirement age and are disappointed with their pension. According to official statistics, 47.8m Americans over the age of 65 have to continue working.
Most financial experts claim you should be saving at least 15% of your monthly salary for retirement. Other advisors put this figure up to at least 20%.
The reality is, the average salary for American earners is not earn to save 20% once they have covered their basic living expenses.
Savers therefore have to look for alternative options and build a retirement portfolio that will work for you.
Open a Gold IRA
Every financial advisor will tell you the key to building an investment portfolio is diversity. What they don’t always mention is that diversity also requires balance.
Generally speaking, a diverse portfolio should include stocks, mutual funds and precious metals. If you start saving early enough you may also want to add bonds and annuities – but be warned, the yields are very low.
A Self-Directed IRA gives you more options to accrue a store of wealth than your 401(k) gives you. However, even traditional IRAs limit you to paper-based assets. Subsequently IRA’s don’t enable you to build diverse retirement portfolio that has balance.
Traditional IRAs don’t work for you when there is a slump in the economy and thus leave your pension fund short.
Every retirement portfolio should include equities and precious metals. The reason for this is because when they counteract each other. When the economy is thriving – which is rare – equities perform well and the prices of gold falls.
When the economy is weak – which is most of the time – the value of gold rises whilst interest and dividends on paper-based assets are stifled.
A Gold IRA enables you to add precious metals to your retirement fund thus giving you the best of both worlds and providing all-important balance.
With a balanced retirement portfolio, you will always be earning from at least one of your assets.
The other advantage of a Gold IRA is that tax is deferred until you make withdrawals during retirement. This gives you the opportunity to earn more interest on the funds you save.
US investment laws only permit you to save $5,500 a year in a Gold IRA until the age of 49. Once you hit 50, the amount increases to $6,500.
Regardless of the age you first started saving for retirement, you really should be taking advantage of the right to pay catch-up contributions – even if it means you have to cut your weekly spending somewhere.
Imagine how much more you can do with an extra $15,000 + interest in your Self-Directed IRA.
Pay yourself first
Ideally, you need a plan to build a retirement portfolio. Determine how much you can save each month, and make sure you stick to it. If you can afford to put away $500 or more in a Gold IRA, automate payments and pay for your future first.
Buy when prices are low
The prices of stock, shares and precious metals always fluctuate. As mentioned above, gold performs well in times of economic strife and equities earn money when the economy is strong.
The best time to buy investments is when they are not performing – because the cost of investment is lower. But you know these assets will always go up in price when the economy shifts.
At the moment, equities are performing well. Prices are high and the market is ready for a correction. This is not a good time to buy equities.
Gold on the other hand is as low as it will probably ever get in modern times. Now is the time to buy gold. It will help to balance your retirement portfolio and give you more spending power when you retire.