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How Will A Gold IRA Help You Safeguard Your Retirement?

By October 1, 2020July 5th, 2023No Comments

More and more investors are looking to hedge their portfolios with precious metals like gold to protect their investments and savings. Can rolling over your retirement plan help you safeguard your retirement?

The average American’s IRA includes stocks, bonds, and mutual funds and is administered by large financial institutions. These traditional vehicles for wealth protection in an IRA do not provide any assurance. Case and point–the importance of diversifying in entirely different asset classes was amplified in both the 2000 and 2008 financial crises. In 2008, the stock market dropped nearly 40%, real estate values plummeted, unemployment surpassed 10%, and the dollar weakened. It was evident, that although stocks, bonds, and real estate are different asset classes, during a crisis, all three, were highly correlated. This perfect storm evaporated retirement savings and nearly wiped out the safety net of many hard-working Americans.

Mainstream media, government tax breaks, employers and large financial services companies have often, and continue, promoting investment in the stock market and real estate as a means of accumulating wealth. However, these institutions neglect to emphasize wealth preservation by investing in precious metals. Since 2000, investing in Gold IRAs has a strong record and grown popularity due to its stability against volatile market conditions.

Everyone has some insurance to protect what matters the most. Similar to home, auto, and life insurance, a Gold IRA is your retirement savings insurance. True portfolio diversification includes precious metals to immune your savings from steep stock market crashes, currency devaluation, inflation, and deflation. That is why an IRA holding precious physical metals is an important option to ensure full diversification.

A Gold IRA is an IRS-approved retirement account that functions in the same way as any regular IRA. Unlike conventional retirement accounts such as IRA and 401(k) accounts that limit your options in standard paper-based assets such stocks, mutual funds, and bonds, a Gold IRA allow you the added benefit of investing in physical Gold coins and bars and other IRS approved silver, platinum and palladium metals.

Benefits of Investing in a Gold IRA:

Gold is respected through the world for its value and rich history, which has been interwoven numerous cultures for thousands of years. Central banks have been notorious for scooping up ample precious metals like gold and silver to safeguard their monetary funds. Here are a few more advantages to adding Gold to your IRA or 401K.

1. Gold is A Store of Wealth

Unlike paper currency, coins or other assets, gold has maintained its value throughout the years. Investors see gold as a way to pass on their wealth from one generation to the next.

2. Balance of Risk and Reward

Gold is known as a safe haven investment. Although the investments like stocks and bonds can yield big returns short term, they carry a risk of volatility in the market. If the market is down, so are your investments. Alternatively, gold is seen as a long term investment as it continues to steadily go up in value. Especially in times of economic turmoil when the market goes down, secure assets like precious metals not only maintain their value but significantly rise. Gold increased 25% this year alone while silver more than doubled its value. Both metals are poised to see hefty returns in the next 12-24 months.

3. The Weakness of The US Dollar

Although the US dollar is one of the world’s most important reserve currency, its decline is occurring for many reasons. The pandemic has caused the Fed to print more and more money to preserve buying for Americans however ultimately increased the national debt by another $3 Trillion bringing the massive national debt to an unprecedented $26 Trillion. That, combined with poor budgeting and trade deficits gives way to a dollar collapse.

4. Inflation

Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost of living increases. Over the past 50 years, investors have seen gold prices soar and the stock market plunge during high-inflation years.

5. Geopolitical Uncertainty

Gold retains its value not only in times of financial uncertainty but in times of geopolitical uncertainty. It is often called the “crisis commodity,” because people flee to its relative safety when world tensions rise; during such times, it often outperforms other investments. For example, gold prices experienced some major price movements this year in response to the crisis occurring in the European Union. Its price often rises the most when confidence in governments is low.

6. Gold Is a Private Form of Wealth

In an increasingly digitalized world where data breaches and cyber attacks have been constant, privacy remains paramount. As a private form of wealth, that is both tangible and portable; physical gold can be privately accumulated, easily liquidated and traded worldwide.

 

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