Why A Gold IRA Is A Smart IRA
Saving for retirement is not easy. Sure, there are multiple options for you to buy into, but the majority of investment vehicles have limitations and return low yields.
Furthermore, when the financial markets crash, dollar-backed assets lose money – and that is bad news for your retirement savings. You probably know this from experience already.
How did your 401(k) perform in the last financial crisis?
If you have a standard pension plan like most working Americans, your 401(k) has lost money in the last 10 years. And the next financial crisis will be worse than 2008. Have you ever considered how your 401(k) will perform after the next market crash? You already know the answer to that! The FED will lower the bank interest rates again and your pension will suffer as a consequence. Americans that rely on a 401(k) to see them through retirement are in for a nasty shock!
To avoid disappointment, you should be taking evasive action and putting a strategy in place that will protect your savings and increase your purchasing power when you decide to stop working.
There are solutions!
Smart investors diversify their investment portfolios. Having multiple investments is the only way to take advantage of fluctuating markets and protect your retirement savings when the markets crash.
You probably already know that when the economy is thriving, dollar-backed investments perform well. The reverse is true when financial markets are struggling. During periods of financial strife, the value of precious metals increase. Gold IRA’s are the only self-directed retirement fund that allow investors to purchase a broad range of investment tools. And that’s why Gold IRA’s are the best choice for smart investors.
What Is a Gold IRA?
A Gold IRA, or precious metals IRA, is a self-directed retirement plan. These flexible savings account enable investors to add a broad variety of investment tools – in contrast to Roth and Traditional 401(k) retirement plans which only permit you to invest in funds with low yields such as bonds, stocks and mutual funds.
The principle benefit of a Gold IRA is that you can add gold bullion and other precious metals to your retirement plan. Gold is an excellent investment tool for retirement, and offers a number of benefits other than diversifying your investment portfolio.
Gold IRA Pros
- Precious increases over the long-term and gives you more spending power in retirement
- Gold acts as a hedge against rising inflation
- Precious metals act as insurance for your retirement portfolio
Gold IRA Cons
- Not all gold coins and bars qualify for a Gold IRA
- Some custodians do not allow you to purchase physical gold (we do!)
- Gold is not a short-term investment for quick profits
Pro #1: Gold Improves Your Purchasing Power
Because Gold IRA’s enable you to invest in a wide range of investment vehicles, you have more control over your financial future.
The ability to add gold bullion to a retirement fund is certainly a boon. Whereas the dollar loses value over time, gold increases in value. Therefore, if you invest all your savings in vehicles that are tethered to paper money, you will not accrue the earnings you had hoped.
Gold on the other hand always increases in value over the long-term. Investing in precious metals therefore give you more spending power when you retire.
Pro #2: Gold is a powerful hedge against inflation
Because the value of the dollar declines over time, yet the cost of living goes up, gold acts as a powerful hedge against inflation that enables you to maintain your standard of living when you stop working.
That’s not to say you should only invest in gold. When the economy is thriving, equities and other investments that are tied to the dollar earn more o interest. The best way to build a store of wealth is by diversifying your investment portfolio.
Gold IRA’s enable you to do just that.
Inflation will obviously rise by the time you retire. That is a given. Geopolitical events always push the cost of oil and trade upwards. You don’t even want to think how much the cost of living will be by the time you retire.
So ask yourself this; will the current rate of growth of your dollar-backed investments cover your living expenses when you retire?
Pro #3: Gold IRAs Act As A Defense Against Low Interest Rates
Gold prices increase in times of economic instability and war. The United States Army seem to be at war consistently, and history shows there is a financial crash every 11-15 years.
You probably know from experience how the 2008 banking crisis diminished pension funds. Investments tethered to paper investments simply do not accrue interest when bank rates are low.
In other words, relying on your 401(k) is not a solution for financial security when you retire.
The next financial crash will be even worse than 2008. When you consider it has taken a decade to recover from the last banking crisis, how long do you think it will take to recover from a credit crash!
To compete against low interest rates, it is imperative for investors to purchase a wide range of financial tools that enable you to ride the waves of financial instability.
Gold IRAs give you the option to build a varied portfolio – whereas 401(k) plans and equities offer limited options with lower than expected returns.
Con #1: Not All Gold Coins Qualify For A Gold IRA
Gold IRAs fall under the legal jurisdiction of the Taxpayer Relief Act 1997 which states that the gold coins that qualify for a pension plan have to be at least 99.9% pure gold and minted to the highest quality specifications.
As a result, not all gold bullion coins and bars qualify for a Gold IRA. The reason for this is to protect investors from buying precious metals that do not have a high liquidity – whereby you risk losing money to gold dealers that are not prepared to pay the spot price.
Gold coins that do qualify include the American Gold Eagle and Buffalo, British Britannia, Queen’s Beast and Shengxiao Lunar Series, Canadian Maple Leaf, Austrian Gold Philharmonic, Australian Kangaroo and Chinese Gold Panda.
You can find the complete list of gold coins and bullion that qualify for Gold IRAs here.
Con #2: Not All Custodians Allow You To Store Physical Gold At Home
You can only purchase Gold IRAs from certified custodians. The problem for investors is that the majority of account administrators do not only their customers to buy physical gold and store it in your home.
What most custodians offer is to store your Gold IRA holdings for you in a depository they are affiliated with. Whilst this may be a convenient option, some investors are not comfortable storing their precious metal investments with a third party – not to mention the costs involved for storage.
Capital Gold Group does not believe this should be the only policy. We offer our customers the opportunity to store your precious investments as you see fit. We can arrange to store gold in a high-security depository for you, or we can deliver it to your doorstep so that you can see your investment is real.
Con #3: Gold Is Not A Short-Term Investment
Short-term investments are said to be a smart strategy for leveraging your money to turn a quick profit. The reality is that day trading is a risky game and is rarely lucrative. You only hear about the times the winning ticket comes in!
Investors looking to make a quick profit will not get any joy from gold. Investing in gold is a safe haven investment – and safe havens need time to mature.
Warren Buffet famously said the best time to hold an investment is forever. Gold consistently proves it is an investment vehicle that builds a store of value over time, and not in the short-term.
Subsequently, gold makes an excellent choice for investors looking to grow your retirement funds. And Gold IRAs are the best retirement funds to buy gold and other precious metals for your retirement.
© 2013 Capital Gold Group,Inc. All rights reserved. Capital Gold Group,Inc. is not a licensed securities dealer and is in the business of selling precious metals, not securities, options, futures, etc.The purchase and sale of precious metals does involve risk. The values of precious metals are determined by the economic market, and their prices fluctuate daily. The factors involved in the value of a precious metal at any particular point in time include, but are not limited to, the following factors: scarcity or perceived scarcity, current demand,value of the dollar, market sentiment,political events, economic reports, government action or inaction, popular culture, etc. Capital Gold Group,Inc.would be the first to say that this kind of investment is not for everyone. On the other hand, one can be a collector of precious metals without concern for investment outcome. As precious metals can decline and increase in value, it is suggested you conduct your own research or study of precious metals before making a purchase, and that you be prepared to hold your precious metals for the long term if you are using them as an investment vehicle. Capital Gold Group,Inc. is here to provide you with excellent customer service and value. If you have any comments or questions about our disclosures, please feel free to call us toll free at 1(800)510-9594.
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