10 Reasons Why You Should Have a Gold IRA

A gold IRA works pretty much the same way as your traditional IRA/401(k). The major difference is that it allows you hold precious metals such as gold and silver in the account and since it follows the self-directed IRA set up, it avails you the freedom of making investment decisions for yourself. Get a list of reviews of the top 10 gold dealers that will help you move precious metals into your retirement account. Click here for the list.

Here is a quick compilation of ten reasons to have a gold IRA.

  1. Ownership of physical gold and silver

For the most part, people who currently claim to have access to gold and/or silver only have claims on these precious metals – and not access to the physical metals. I mean, we talk about owning mining stocks, ETFs, futures, options, and so on – none of which means that a supposed owner of gold or silver has direct access to the precious metals.

One down side to these sorts of ownership is that a new layer of risk is being introduced. According to Wealth Daily, “On the investment pyramid of risk, physical ownership of gold (and silver) would be on the lowest tier (least risk) with cash and life insurance, while ownership of gold mining shares would be classified on the second or third tiers (higher risk) depending on whether you own a major gold producer or a junior mining company.”

In other words, these other forms of gold ownerships are more volatile than physical ownership. With gold IRA, you give yourself that bit of assurance on the safety of your wealth.

  1. Diversification

For savvy investors, perhaps this is the biggest benefit of gold IRA. As I said in a post on TheStreet, it gives you the freedom to make your own investment decision coupled with a chance for sufficient portfolio diversification. If nothing else, sufficient diversification should be the number one target of any retirement account.

Sufficient diversification protects your savings against volatile economic environments. Gold IRA helps you build your portfolio such that it’s not based off just one asset class. It avails you the opportunity to invest in paper-based assets and safe haven assets at the same time.

  1. Overseas storage of precious metals

As said earlier, gold IRA provides an outlet for owning physical gold. However, there are two issues with owning physical gold. The first issue is that of security. In other words, there is a question of how to keep your gold safe from theft.

The second, and probably the more important one, is keeping your gold from confiscation. Over the years, greedy politicians have made this particular precious metal a prime target to shore up their deteriorating economies. And since they are the government, they usually find ways to use gold to improve their wealth through legislations.

The President Roosevelt’s Executive Order 6102, which ordered gold owners to turn in their gold for about $20, is a good example of the issue we’re talking about here.

However, with gold IRA, you do not need to have any of these concerns, as any gold you purchase through your gold IRA is stored safely overseas, where local legislation won’t affect you.

  1. Protection against falling U.S. Dollar

If you’re an ardent follower of the gold market, you probably already know that the price of gold moves counter to the value of the US dollar. Therefore, with gold IRA, which helps diversify your portfolio sufficiently, you get some protection against the falling US dollar, which is likely to affect your portfolio if it were based off just cash and equities. This is a safe bet when you consider that your retirement savings is at stake here.

  1. Ability to own Bitcoins in your retirement account

While I am not an advocate of bitcoin taking the place of gold in your retirement portfolio, I remain a huge advocate of sufficient diversification. Bitcoin presents a way to further shore up your retirement savings against volatility. While stories keep coming out on daily basis on an imminent demise of bitcoins, they continue to be actively traded by investors worldwide.

According to Forbes, a judge recently ruled that bitcoin is real money. It might be worth it to consider Bitcoin as part of your alternative assets. And gold IRA offers this opportunity, which isn’t widely available.

  1. Hedge against inflation

You probably already know that inflation is biggest retirement risk. However, the diversification options that gold IRA offers provides some solution to this problem. First, gold – and just about every precious metal – has historically performed in inflationary environments.

Second, with alternatives such as bitcoin growing against the dollar, you can expect similar relationship as well. So with gold IRA, you would be taking a step closer to protecting your wealth against inflation.

  1. Tax-free Savings

The good thing about moving over to gold IRA is that the process is tax-free. Regardless of the plan you have in place – be it 401(k), 403b, 457b, annuity, or pension plan – you would be able to do a gold IRA rollover without losing any of your savings to taxes.

  1. Supply is limited, increasing demand

Simply put, gold is as valuable as it is because it has a limited supply spectrum, which is a good quality of any safe haven asset. Combine this with the fact that its demand is growing in just about any aspect of life – especially its investment demand, which is the main driver of its price – and you can expect that your retirement savings would grow overtime.

  1. Increasing value throughout history

There is no denying that gold has a rich history. The first set of coins that contain gold was first seen as early as 800 B.C. About 300 years later, the first set of coins made of pure gold was found.

Such rich history has helped preserve the value of gold from generations to generation, which isn’t the case with paper currency. Such a rich history means that you can trust gold to preserve your wealth over the long-term.

  1. Protection from U.S. Government

Since gold isn’t a paper-based asset, having a gold IRA, to some extent, protects you from decisions made by the US government. For instance, the government gets to set inflation rate, interest rate and so on, many of which affect the value of the US dollar, thus, affecting the value of paper-based assets. However, with gold, such decisions don’t affect you.

How to Put Gold into Your Retirement Account

The first step in the process of putting gold into your retirement plan is to open a free account with Regal Assets, which is a no-hassle way to buy and store precious metals. Regal Assets has been featured in Forbes magazine and Inc 500 as a top financial service in the US.

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