A gold IRA rollover refers to the rollover of your Individual Retirement Account (IRA) assets to an account that holds gold. You can do this if your IRA account is funded by any IRA type – Traditional, Roth, SEP or SIMPLE IRAs. While Americans typically invest stocks, equities, or real estate in their IRAs, many overlook the various benefits of investing in precious metals such as gold and silver. By placing hard-earned income and savings in a gold or silver IRA, you can mitigate risks and increase your chances of securing and enhancing your retirement portfolio.
Here’s Why to Consider a Gold IRA Rollover
In this article:
- Protects You from Inflation
- Tax Advantages
- Increasing Demand for Gold
- Higher Taxes and Fees on 401(k)
- Diversifies Your Portfolio
- Builds a Healthy Portfolio
1. Protects You from Inflation
The economy is always in a state of flux. In the event of a crash (such as in 2008), stocks and bonds will inevitably depreciate. As a result, gold IRA rollovers become useful. During times of financial turmoil, the value of gold generally increases. When other investments lose their value, your gold IRA rollover may be a solid retirement plan.
If you need help with your investment in gold, a self-directed IRA custodian might be a great solution. To learn more about self-directed IRA custodians, contribution limits, storage fee, and early withdrawal, click here.
2. Tax Advantages
Savings inside a self-directed IRA face a tax deduction when you remove assets before the vesting time or after they’ve valued over time. One option is to invest in exchange-traded funds, a gold mutual fund, gold coins, gold bullion, or gold mining stocks in which you engage in gold IRA investing without dealing with physical gold. This gives you a unique advantage. After the investments are held for more than a year, tax-deductible contributions will take place after the long-term capital gains rate.
3. Increasing Demand for Gold
For thousands of years, humanity has seen gold as a precious commodity. Its desirable properties make it indispensable in jewelry, architecture, technology, and a host of other industries. At the same time, the number of gold mines is dwindling by the year. It’s simple economics: as demand soars and supply decreases, gold will likely increase in value. This makes a gold-backed IRA a solid, long-term way to build your retirement fund.
4. Higher Taxes and Fees on 401(k)
Maintaining an employer-sponsored retirement plan such as a 401(k) incurs various management, service, and administration fees. In one lifetime, these fees could add up to six digits! Also, once you make your IRA withdrawal, the highest possible tax bracket with a 401(k) is 39.6%. On the other hand, gold IRA rollovers result in much lower taxes on IRA contributions. With gold as a collectible, you are taxed only 28% on capital gains. You can invest in precious metals with your Traditional IRA contributions and/or Roth IRA contributions.
Within a self-directed IRA, you can use your contribution to invest in numerous options that aren’t commonly known. Click here to download the comprehensive list of self-directed IRA do’s and don’ts.
5. Diversifies Your Portfolio
As the saying goes, “don’t put all your eggs in one basket.” All seasoned investors diversify their investment portfolios through investment distribution. It’s an effective strategy to lower investment complexities and protect your income if an investment goes haywire. As previously mentioned, gold has an inverse relationship to the stock market. If the economy crashes, your gold IRA investment might prove to save the day.
6. Builds a Healthy Portfolio
Diversity can help to create a healthy portfolio. Aside from gold bars or gold coins, you can invest in other forms of precious metals such as silver, platinum and palladium. Investing in other rare-earth elements can also increase the health of your portfolio. If you want more options for your retirement fund, you can invest in gold, silver, and other paper-based investment plans.
Throughout history, gold has been a sought-after material. Today, its value and relevance in international markets remain high. Providing security and tax advantages via tax-deferred growth and investment diversity, investing in gold, bullion, and gold coins is a solid plan. With a gold IRA rollover, you can also rest assured that your contributions are slowly paving the way to a secure retirement. If you don’t have a solid grasp on this kind of investment, try engaging the services of a gold IRA custodian to help you.
Do you think a gold IRA rollover is a good investment strategy? We want to hear from you! Let us know in the comments section below.
Editor’s Note: This was first published in February 6, 2018 and has been updated for quality and relevancy.