When you have invested a significant amount of your life savings into your retirement account, you naturally want to protect it from depreciation. This can be done with a variety of strategies, but one way that many people are protecting their wealth is through the use of gold and other precious metals in a Gold IRA. Besides serving as a valuable portfolio diversifier, gold and other precious metals are often seen as a hedge against inflation.
The value of money decreases due to inflation, and this can be devastating for your savings or investment accounts. Fortunately, you can protect your wealth from the effects of inflation with a well-timed portfolio that outpaces inflation. The best strategy is to invest in a combination of high-return assets, such as stocks, bonds and cash. But you can also outpace inflation with investments that have historically performed better than equities, such as real estate and precious metals.
In fact, according to JP Morgan Asset Management, in the last 20 years, gold has outperformed stocks, bonds and oil. When you are looking for an inflation hedge, precious metals like gold, silver, and platinum may be the best option. Gold IRAs provide a great form of protection, allowing you to safeguard your retirement accounts against inflation and market volatility. In addition, unlike paper assets like stocks and bonds, precious metals have intrinsic value.
To further protect your wealth, it’s essential to identify potential risks and take action to mitigate them. This could include a well-funded emergency savings fund, a diversified investment portfolio, and insurance. Term life insurance can cover expenses in the event of your untimely death, and disability insurance may partially pay for your expenses while you are still alive.
Another type of protection can be accomplished by using a self-directed Gold IRA, which gives you the freedom to choose where your IRA investments are held. But, you should be aware of the strict IRS rules regarding home storage of precious metals. Unless you create an IRA-owned limited liability company and meet stringent IRS requirements, the laws state that your precious metals must be stored in a secure depository location.
If you are considering a Gold IRA, it is important to compare options and make sure that the custodian you select is compliant with the regulations. Adherence to the IRS guidelines helps to foster a system of trust between investors, custodians and regulatory authorities.
While a Gold IRA is a great option for protecting your wealth from depreciation, you should always consult a tax professional before making any decisions about your IRA or other retirement account investments. They can help you understand your unique situation and recommend the best options for you.
If you’re looking to make a direct contribution or roll over your IRA into a precious metals-based IRA, the process is simple. Just make sure you have a trusted and reputable Alexandria gold IRA investing company, such as IRA Financial, who can help you establish your own Solo 401(k) plan hassle-free, then use your new bank account to buy your desired metals from your preferred dealer. Your custodian will then store your assets in an approved depository, where you’ll be charged annual storage fees.