Inflation has hit a new high, but the good news is that the prices of gold also continue to rise. Inflation can be a real concern as you look to invest for retirement. However, investing in gold can help balance out your portfolio and create a hedge against inflation.
Are you wondering if you should get a gold IRA? If so, keep reading to learn more about why you should invest in gold for part of your retirement planning.
Why Open a Gold IRA?
A gold IRA can diversify your account, so you are not heavily tied to just the stock market. If you are too vested in one area like the stock market, your portfolio can take a big dive if the market struggles.
By using some of your funds in gold, you can mitigate some of that risk and make sure your portfolio will withstand market downturns. And, as mentioned before, good is a great hedge against inflation as its price often rises when the dollar’s value decreases. You can also make a profit with gold as prices grow over time.
Want to learn more about gold? Check out raremetalblog.com/24-interesting-facts-about-gold for some interesting facts about gold.
What to Consider When Opening a Gold IRA Account
When you get ready to open a gold IRA, it’s important that you understand these accounts and how they work. Here are some things you need to consider.
There are limits to how much you can invest in your gold IRA. These contributions also vary by age. For example, if you are under 50, you can contribute up to $6,000 a year, but over the age of 50, you can contribute up to $7,000 a year.
Type of Account
You also need to consider the type of account you want. You can choose either a traditional IRA or a Roth IRA. The difference between the two is how they are taxed.
With Roth IRAs, you pay taxes before contributing to your account. With traditional IRAs, you pay taxes when you take out the money.
Storing Your Gold
With precious metals investing, you buy gold and silver through precious metals IRAs, and the metals are stored at either a depository or an approved bank. These storage facilities must be approved, and you can not store your gold purchases personally.
You can opt to take your metals later as distribution once you are eligible. You can also choose to take them earlier, but you will pay a 10 percent penalty.
Finding a Broker or Custodian
Now you need to find a broker to buy the gold and also a custodian to create and administer your account. These custodians are typically banks, trust companies, credit unions, brokerage firms, or savings and loan associations approved by federal and state agencies.
Be sure you know all your costs upfront to avoid any surprises. Look for a company that has an outstanding reputation from third parties like the Better Business Bureau. You can also look for online reviews to see what other customers have to say.
Be sure you look for a company that also has the appropriate registrations, licenses, and insurance to protect your investment.
Learn How to Invest for Retirement
It’s never too late to invest for retirement, and starting early is key. It’s important to diversify your portfolio to protect against market crashes. Talk to your financial advisor about investing in a gold IRA.
Check out our blog for other great advice on investing for retirement as well as other advice on all areas of life like health, technology, and education.