Your Current Retirement Plan Could Be Missing Something
When you plan ahead for retirement, you need to make sure that your assets increase in value, while also protecting them from the stock market’s volatility.
But even if you own many different investments – such as stocks, bonds, and mutual funds – you could still be missing something. In fact, you could be giving up the opportunity for more growth, diversity, and a hedge against inflation, without even realizing it.
Many investors and financial advisors are not aware that they can use tangible assets like gold and other precious metals in their IRAs (Individual Retirement Accounts). They could also use tangible assets in their employer-sponsored retirement plans like the 401(k).
People around the globe have used gold as a form of currency for many centuries. Investors have also purchased gold as a strategy for diversifying assets, reducing risk, and hedging against inflation.
But, if you include gold in an IRA or retirement plan, not only can you get all the monetary benefits from this valuable asset, but you could also get a number of tax-related perks.
For instance, you could defer taxable gains until the time you make withdrawals from a traditional IRA or retirement plan. This can help the assets in the plan to grow and compound over time.
Unfortunately, you are responsible for paying capital gains taxes on investments – including gold and precious metals – if you own them outside of a tax-advantaged IRA account or retirement plan.
But, if you own gold in a Roth IRA or retirement plan, you can build up your account value tax-free. You also won’t have to pay taxes on the withdrawals that you make – regardless of what future income tax rates are.
But you cannot own gold and other precious metals in any type of IRA account or retirement plan. Therefore, you should work with an advisor who can guide you through the process of opening and funding the account(s), as well as for determining which type of gold and metals investments are right for you.
This book will help you understand the many benefits you can get if you own gold and precious metals in a retirement account. It also provides you with the steps that are needed for opening and funding an account where you can reap the rewards.
After you finish reading this guide, you will know exactly what steps you need to for moving forward. You can also use this book for reference as you go through the actual process.
What’s Wrong with “Traditional” Retirement Planning?
Even though people have done things a certain way for many years, it doesn’t mean that they should continue doing so in the future. Take, for instance, planning for retirement.
In the past, many retirees counted on income from three primary sources: an employer-sponsored pension, Social Security retirement benefits, and personal savings and investments.
With the first two options, investors did not need to actively participate, other than working long enough to qualify for the benefits. The income from the pension and Social Security was often more than enough to pay all of the retiree’s living expenses.
Therefore, many retirees who took interest and withdrawals from their personal accounts considered this income “extra.” The investors often used these funds for travel, fun, and other non-essential items. Plus, with shorter life expectancy back then, retirement savings and assets didn’t have to last for very long.
Fast forward to today. Many employers have eliminated defined benefit pension plans, and replaced them with defined contribution plans, such as the 401(k).
But, even though employee/participants can enjoy the benefits of pre-tax contributions and tax-deferred growth, you (not your employer) are responsible for generating enough income in retirement.
Unfortunately, with the ups and downs of the stock market and low interest rates, you may worry that your savings – from both personal and employer-sponsored plans – won’t last long enough to see you through a potential 20+ year retirement.
Big drops in the stock market (like those during the recession of 2008 and the COVID-19 pandemic) make it even harder to keep your money safe. Added to these risks is our longer life expectancy. That is because we will face all of the other risks for a longer period of time.
Also, you likely have limited investment choices in your 401(k) plan that are based on what your employer and your financial institution(s) have available on their “shelves.”
For instance, you may believe that your Individual Retirement Accounts are “self-directed,” because you can choose from a variety of stocks, bonds, and mutual funds. But you could have many other investment options to help you reach your financial goals.
Today, even with the extensive stock market volatility, equities are at record high prices. But you could get a false sense of security based on the high debt levels and price to earnings (PE) ratios that publicly traded companies are also experiencing.
Plus, to help stimulate the U.S. (and in turn, the global) economy, the Fed has again pumped money into the economy. But this, too, is not a good thing for investors or consumers.
For example, when central banks use a quantitative easing strategy to increase the money supply, inflation can occur – but not the economic growth that the government intends for stimulating the economy.
Quantitative easing can also lead to a devaluing of the domestic currency. And, even though this can lower the cost of exported goods, it can also make imported goods more expensive.
Yet, when the demand for dollars falls, banks and investors turn to gold – which in turn, can increase its value. The rising value of gold and the tax-related benefits that you can get by owning this metal in an IRA or retirement account provide you with a powerful combination.
So, what can you do to reduce the impact of a stock market correction, while at the same time continuing to grow your portfolio? One option is to have a gold IRA and/or retirement plan.
There is Another Alternative
Gold IRAs and retirement plans can be appealing if you want to diversify your portfolio. The price of gold moves in the opposite direction of paper assets and equities. So, when you add gold to your retirement account(s), you can “insure” your savings against inflation.
You can have many other benefits when you have a gold IRA or retirement account, too, including the opportunity for increased returns in your portfolio, as well as diversification across a different asset class.
Investing in gold through an IRA account also allows you to take advantage of the tax-related features of IRA investing, such as tax-deferred growth, and the possibility for tax-free withdrawals.
But regular traditional and Roth IRAs don’t allow you to include tangible assets like precious metals. Rather, you can only do so through a truly self-directed IRA. So, you must have the proper type of retirement account set up before you begin investing in gold through an IRA.