Gold IRAs are similar to traditional IRAs in many ways, but the resilience of precious metal prices makes gold IRAs ideal for securing investments even as the economy changes. Unlike solid gold investments, the metals purchased for gold IRAs are held by licensed custodians rather than the investors themselves. Understanding gold IRA options is crucial for investors to determine if this is their best route to a stable retirement fund. Here is a look at why a gold IRA can be an ideal investment and how you can get started on this path.
Gold Price Stability Is Legendary
Unlike IRAs that are invested in mutual funds or stocks, gold IRAs are unlikely to crumble when inflation occurs. In fact, as paper currency decreases in value, gold value often remains afloat or even rises. For this reason, many investors choose to add gold to their portfolio as a sort of insurance policy against future economic turmoil. The price of gold itself is less vulnerable to sudden changes compared to gold stocks, which are partly dependent on the state of mining and related industries. Gold and other precious metals, such as silver, are special in this way. Moreover, gold IRA options eliminate the need for investors to store gold on their own. A gold IRA rollover further simplifies investing through conversion of the IRA funds investors have already accumulated.
The Rise of Gold IRAs
People have long invested in physical gold and other precious metals, but adding these items to IRAs has only been possible since the Taxpayer Relief Act was passed in 1997. For years, however, gold IRAs were so difficult to set up that few investors attempted to add gold to their retirement funds. As the economic crisis of 2008 set in, gold IRAs drew new interest from investors who recognized the frailty of paper currency. A host of companies began to handle the process of purchasing and storing gold for IRAs, simplifying these investments dramatically. Today, investors are increasingly adding gold coins, gold bullion, silver and palladium to their IRAs for added protection against economic downturns.
Choosing a Gold IRA Broker and Custodian
If you want to set up a gold IRA, you will need to select a gold broker as well as a custodian. Whereas the broker will buy the gold products you choose, the custodian is required to create your gold IRA account and conduct administration services. Gold custodians are approved by state and federal agencies and include trust companies, brokerage firms, banks, credit unions and savings and loan associations. Although gold dealers are not chosen by custodians for the clients they serve, many custodians have established connections with reliable dealers and can make sound recommendations to investors. The reverse is also true: Gold dealers commonly know of custodians that can serve their clients.
A number of criteria should be considered by clients who are looking for gold IRA companies. First and foremost, custodians should be licensed and offer FDIC insurance. Before signing on with a custodian, investors should look into their reputation, including online reviews of their services, and become familiar with the fees that they charge. Finally, what level of support is offered by the custodian? Ongoing support is a key feature of these companies and is vital for peace of mind in the long term.
Read and overview of the top companies here Top Rated Gold IRA Companies – An Overview.
Gold IRA Risks and Solutions
No investment is totally free of risks, and gold IRAs are no exception. Although gold is more stable than paper currency in terms of its value, its price has changed in the past and will continue to do so in the future. However, potential changes are balanced by the relation of gold price to that of other investments. As one goes down in value, the other tends to go up. This means that keeping a combination of gold and conventional investments in your IRA can actually give you greater protection against future economic changes.
The volatility of gold prices relate mainly to short term economic changes as this metal remains quite stable over long periods of time. Therefore, gold may be particularly advantageous for investors who are making long-term plans. For investors who are about to retire, a thorough analysis of options will be beneficial before any major portfolio changes are made.
Gold investments can present risks of loss due to scams when investors deal with unscrupulous companies. Some of those companies may not actually possess as much gold as they claim to be holding for their clients. Fortunately, this does not have to be a concern for investors who take their time selecting a reputable custodian.
The risk of theft with physical gold also highlights the importance of choosing reliable gold IRA custodians. Fortunately, custodians are required to carry insurance on the gold contained in the accounts of investors up to a specific value. Thieves and fraudsters that steal gold or avoid purchasing gold that investors order can be avoided through prudent selection of the custodian.
Gold does change price over time, but it remains impressively stable compared to conventional investments. In addition to needing experts for valuation, gold necessitates professional assistance when IRA investors want to diversify their portfolio with precious metals. The value that investors receive from brokers and custodians can differ significantly, making careful planning essential for the most dependable results. Investors who approach a gold IRA rollover the right way gain substantial protection against economic disruptions for the best chance of having financial security during retirement.
Which Gold Company Do We Recommend?
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