Why a Gold IRA is Becoming a Trending Retirement Investment

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Why a gold IRA is becoming a trending retirement investment - As an investor, it’s important to think differently in today’s up-and-down financial climate. One minute the stock market is moving fast in the right direction, and then a pandemic happens out of nowhere and 40% of your portfolio is gone in a matter of weeks.

What do you do?

Smart investors began moving many of their assets into gold, silver, platinum, and palladium as part of a gold IRA. Why? The value of gold and other precious metals has risen tremendously during this time.

As a matter of fact, in early 2020 the value of gold hovered between $1200 per ounce to $1400 per ounce. Right now, it’s just about to break the $1900 per ounce mark.

Don’t worry. There’s plenty more financial uncertainty on the horizon. And plenty more investors will continue plowing their money into gold and other precious metals investments because of this uncertainty.

According to IRAinvesting.com, this is just one of the many benefits and advantages of opening a gold IRA account. I’d like to tell you a few more things to consider, so keep reading to discover the truth.

Advantage #1: Gold Maintains Its Value from a Historical Standpoint

Believe it or not, for many millennia, the value of gold has continued to rise in worth. But even better, because all investments fluctuate, gold has a tendency to hold its value historically.

If you look at the history of gold over the past 40 years, you’ll see that year after year the value of gold has incrementally risen to greater heights. 

But at certain points, the value of gold will slow down during its growth cycle, but it will maintain the value that it has gained during a period of growth.

So, if you were to pay $1900 an ounce for gold right now, you can expect to maintain your value for the foreseeable future. And then, the value of gold will slowly begin to rise over the course of a year or two, and you’ll reach a newer and greater level, which gold will then maintain the new value until the market pushes it even higher.

But why do people believe in the value of gold so much?

For starters, it’s a currency that’s been accepted throughout history for thousands of years. And it’s a well-recognized form of currency that you can use all over the globe to pay for goods and services.

Other reasons why gold is so valuable include:

You will never see gold corrode

You can melt gold over an open flame

You can easily see its uniqueness and beauty

You’ve learned that gold absorbs light due to faster electrons and heavier atoms

Adding all of this up, it’s quite simple to see why gold continues to maintain its value as it grows year after year. Think about it…

Who would pump so much money into gold only to expect the value do it deteriorate over the years? Nobody would be foolish enough to do that, which is why gold is such an excellent investment.

And buying it through a gold IRA is even better.

Advantage #2: Gold IRA Accounts Provide Massive Tax Breaks

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Did you know that the IRS created a tax loophole specifically designed for gold IRA account holders to earn more money? It sounds crazy because the IRS isn’t known for giving away their tax dollars. 

But that’s precisely what they did in this case, and it’s an amazing opportunity for investors looking to retire wealthy, healthy, and happy in the future.

How does it work?

Well, this loophole is very simple and it’s actually two loopholes rolled into one, depending on how you open your account when you first set it up.

As a person opening a gold IRA account, you can experience extra special tax benefits in the following ways, but you can only get one of these benefits, not both:

Tax-free investing

Tax-deferred investing

Before you convince yourself that you’re reading this wrong, yes, you can earn big money in your retirement account through tax-free or tax-deferred investing. This is not a drill and it is not a joke. This is the real deal.

If you open your account in a way to receive tax free investing, you will deposit money into your account that was already taxed by the IRS. So, everything that you earn within your gold IRA account is yours to keep once you reach retirement age and begin taking distributions.

What is retirement age? For a gold IRA account holder, you can begin taking distributions at 59 ½ years of age. And at 70 ½ years of age, they force you to begin taking distributions because this is the mandatory age to start collecting the proceeds from your gold IRA account.

As far as tax-deferred investments go, the big benefit here is you get to lower the amount of yearly taxes that you paid by lowering your yearly taxable income. All the money deposited into this account is pretax dollars. 

So, once you reach retirement age at 59 ½ years old or later and you begin taking distributions, you’ll then have to pay your taxes at the going rate at the time, which may be less than what it is right now.

Advantage #3: Buying Gold Is Very Trendy at the Moment

I would never tell you to jump into a fad investment, and believe me when I say it, there’s nothing fashionable about buying gold because people have been doing it for thousands of years. But at the moment, gold is really popular and there are many investors clamoring to buy this relatively scarce resource.

Why is this good for you? Doesn’t it create more competition?

Maybe it does, but at the same time, all of these interested investors are raising the value of gold precipitously year after year. Because so many people are buying it, the value keeps going up on a regular basis and this is making it worth more money all the time, which is what you want as an investor.

Things to Be Aware of Before Opening a Gold IRA

Gold IRAs do come with some significant challenges and procedures that may help determine whether they are the right financial option for you. Therefore, we believe it is vital to understand some of the challenges you might face when it comes to investing in a Gold IRA and how to deal with its idiosyncrasies.

Fees and Expenses

We already mentioned that Gold IRAs are quite specific and require a complicated procedure to set up and run. Unfortunately, that will always carry over to the cost of having a Gold IRA. 

On average, the fees and expenses for running a Gold IRA or purchasing and selling gold bullions and coins are higher than the costs associated with traditional IRAs.

This is understandable given that the Gold IRA holder needs to pay for the services of a custodian and other financial caretakers. The good news is that fees and expenses are going down as the Gold IRA gains more popularity.

No Yield, No Dividends, No Interest

Unlike regular stocks in traditional IRAs, gold does not pay dividends or interest. On the one hand, you might be missing out on the additional value that interest, yield, and dividends offer (albeit at a much higher exposure to risk).

Fraud and Theft

By deciding to open a Gold IRA, you are primarily hiring a custodian whose role is to take care of the transactions, records, and storage of gold bullion and coins on your behalf. This leaves a lot of room for potentially fraudulent behavior on the part of the custodian. 

The best way to avoid getting caught up in any theft or other fraudulent proceedings is to do your homework and carefully choose the right custodian to insure all of the transactions made in your name.

Compelling Reasons Why Everyone Should Consider an IRA:

  1. In an IRA, you have the flexibility to dollar-cost-average, simply accumulate, or trade in and out of investments, deferring all taxes on gains.
  2. An IRA lets you invest pre-tax, undiluted funds, if you qualify. This takes your money further. Roth IRAs are also available.
  3. All earnings accumulate tax-free over the life of the IRA.
  4. You are not limited to "paper assets" as in many retirement plans.
  5. All earnings accumulate tax-free over the life of the IRA.Taxes are deferred from high-income, high-bracket earning years to lower-bracket retirement years.
  6. An IRA provides you with a wide choice of investments for your pre-tax retirement dollars.
  7. You can invest retirement funds in a tangible asset like bullion bars and coins with substantial intrinsic value.
  8. A regular, disciplined investment program is the surest path to financial security.
  9. Virtually everyone with wage or self-employment income can open an IRA.
  10. When you want to take a Required Minimum Distribution (RMD) you can elect to take distribution "in like kind" meaning you can receive any precious metal bullion held in your IRA from the account.

Final Thoughts

As you can see, there are many reasons why you benefit from the advantages of a gold IRA. By investing regularly and wisely, you’ll set up a beautiful retirement nest egg now so you can live comfortably without a care in the world when you reach old age.

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