Gold IRA Investment Provide High Returns in Future


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On July 28, 2014
Last modified:February 13, 2017

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Gold IRA Investment Provide High Returns in Future

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Almost every investor wishes to have some savings by their side when the retirement time comes. As a result, more and more people start putting aside some of their hard-earned income for the future at a relatively young age, because every investor who is wise enough would know that the sooner they start, the less investments they will need to make.

Gold Backed IRAIn terms of financial vehicles, there are a lot for investors to choose from. Back in the 90s, equities were the most popular choice because the bull market at that time seemed to have no end in sight. Then came the unexpected market downturn in the early 2000s and then again in 2008 and 2009, which led to substantial losses for unprepared investors.

Investors today, learning from their past failures, understand the importance of the diversification of their portfolio assets. Diversification does not mean choosing different types of stocks or mutual funds but rather different types of assets altogether.

Investment in Gold, Why Not?

More and more investors have succeeded in reducing the risk to their retirement savings plan by adding gold or other precious metals as a way to diversify their portfolio.Gold has always grown in its value for centuries, and it keeps doing so today.

Besides its growth in value, there are many other reasons why investors are turning to gold, including:

  • Diversification – Gold is now one of the most effective tools to diversify the assets in one’s portfolio. The rule to diversification is that you should never choose vehicles that are too closely related. Fortunately, gold’s nature is that it has always been negatively correlated with the movement of stocks. As a result, investors can choose this asset as an ideal method to diversify their portfolio, which is normally filled with equities. An addition of gold into an IRA account can help reduce both the risk and the overall volatility significantly.
  • Hedge Against Inflation – Gold has been, for many years, the most sought after tool to hedge against inflation. This can be explained by the tendency of gold’s growthin the past: its value normally rises with the cost of living. As a result, an addition of gold into one’s portfolio can help to keep up with the ever-growing cost of living over time. Again, this function is especially beneficial for the retired or people who are approaching retirement.
  • Asset Protection – Diversification by adding gold to one’s portfolio can greatly reduce risk, thus protecting their investment.

Why a Gold IRA?

IRA, or Individual Retirement Account, has been the most popular method of investing for retirement in nearly four decades, ever since its creation in 1974. The types of asset put inside IRAs have most frequently been bonds and equities, such as mutual funds and stocks, because these accounts are normally opened and managed by a traditional financial institution like banks and brokerage firms. This is because such traditional financial institutions can offer their customers, in most cases, only these types of asset, and because investors have not realized the fact that they can totally add gold and precious metals into their IRA accounts.

Contrary to popular belief, however, the IRS does not strictly limit the types of asset that can be added into a self-directed IRA account. In fact, there are plenty of IRA custodians who would allow investors to add gold and precious metals into their IRA accounts. This allows investors to enjoy not only the benefits from such investments but also from the tax deductions and tax deferred status applicable to IRA investing.

These two main benefits make gold IRA investment really profitable. Indeed, investors can enjoy the growth in value of their gold or other precious metals in their self-directed IRA account without having to pay any tax for the time being. They can also control what goes in and comes out of the account itself.

Requirements for Gold IRAs

The IRS (Internal Revenue Service) decides what can and cannot be added to an IRA account. In the case of gold and other precious metals, the IRS provides us with some relatively strict guidelines. The metals added must also meet a certain standard for fineness.

The IRS allows the following metals to be added to IRA accounts:

  • American Eagle Gold Coins
  • American Eagle Silver Coins
  • Austrian Philharmonic Gold Coins
  • Austrian Philharmonic Silver Coins
  • Canadian Maple Leaf Gold Coins
  • Canadian Maple Leaf Silver Coins
  • American Eagle Platinum Coins
  • Canadian Maple Leaf Platinum Coins
  • Isle of Man Noble Platinum Coins
  • Canadian Maple Leaf Palladium Coins
  • Gold and silver bars from various recognized refiners
  • Platinum bars from various recognized refiners
  • Palladium bars from various recognized refiners

The IRS also requires the fineness standards for gold and other precious metalsas follows:

  • Gold – .995 percent or higher
  • Silver – .999 percent or higher
  • Platinum – .9995 percent or higher
  • Palladium – .9995 percent or higher

Starting a Gold IRA

As mentioned above, gold IRA investments can bring investors a lot of benefits, particularly the tax advantages of IRA accounts and all the desirable benefits gold can bring.

It is very easy to open a gold backed IRA account today thanks to the presence of various gold IRA companies, who can be found online. Investors can start by searching trusted and highly rated companies by the BBB (Better Business Bureau) and TrustLink such as Regal Assets, which is praised for their exceptional customer service.

You can find the IRA account paperwork ready on most companies’ websites. The companies decide to provide all the paperwork directly there because it allows investors to get started quickly and conveniently. After successfully opening and funding an account, investors can start investing in the metals that are best suited to their financial needs and short or long term goals.

Gold IRA Investment Provide High Returns in Future

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