Self-directed retirement accounts offer an excellent way to diversify your portfolio through investing in gold. These retirement accounts allow investors to invest in anything allowed under IRS code, including cryptocurrency, real estate and precious metals such as gold.
Physical gold can make an excellent addition to an IRA; just make sure it meets IRS purity requirements and is stored safely. Alternatively, invest in gold ETFs or stocks of gold-mining companies.
Physical Gold
Physical gold has long been seen as an asset worth owning, providing protection from inflation and currency fluctuations while diversifying one’s investment portfolio – though without providing dividends or interest payments.
An individual retirement account (IRA) allows investors to purchase physical gold; however, to do so requires special account called a self-directed IRA that adheres to IRS regulations and allows for independent management of investments by the investor themselves. Furthermore, physical gold IRAs require both a metals specialist custodian as well as an approved storage facility to store precious metals safely.
Gold IRA fees tend to exceed annual IRA account charges in terms of setup and maintenance fees; investors will often face an account setup charge and markup depending on their dealer, plus potential storage and insurance costs, storage and transfer fees when selling, as well as potential third-party sales fees from each dealer at sale time.
Gold ETFs
If you prefer an easier approach to investing in gold, Exchange Traded Funds (ETFs) could be suitable investments. ETFs are like stocks; you can buy and sell them just like shares on stock exchanges. While not physically backed by precious metal, ETFs do hold shares from companies mining or producing the precious metal as well as futures contracts on it.
Gold ETFs may be suitable for investors with short to medium investment horizons, as they offer lower entry costs than physical gold and don’t incur storage or insurance fees. Unfortunately, they don’t provide the same tangible security of physical gold ownership and won’t generate passive income through dividends – plus profits made from selling ETFs are taxed as collectibles rather than long-term capital gains rate – yet including Gold ETFs within an IRA can still provide diversification benefits for the right investor.
Gold Stocks
Gold stocks offer an alternative means of investing in gold without physically owning it. Instead, investors purchase shares of a company that mines or processes gold for sale and receives income from those sales – an investment strategy which may fit well into retirement portfolios but may pose additional risk than physical gold or the best gold ETFs.
If you want to increase your exposure to precious metals, consider opening a self-directed individual retirement account (SDIRA). These accounts allow nontraditional investments such as real estate and precious metals.
Although a SDIRA isn’t offered by most traditional or Roth IRAs, it provides an option for those who want to keep precious metals separate from other retirement savings accounts. You will need to locate a custodian who allows such accounts as well as consider any costs related to storage in a safe location for your holdings.
Gold Mutual Funds
Gold mutual funds provide a great way to diversify your retirement portfolio while still enjoying tax advantages. An Individual Retirement Account can invest in gold mutual funds as well as hold physical precious metals like bullion bars and coins through an IRS-approved depository to maintain tax-advantaged status. Physical gold investments as well as gold mutual funds tend to produce longer term returns than investing in stocks or bonds alone.
If you decide to add gold investments to your retirement portfolio, speak with an independent financial advisor who can assist in developing strategies for growth. SmartAsset’s free tool connects users with independent advisors who can answer any of their queries about what would work best in their specific circumstances and assist with making choices that suit their unique situation. Ready to get started? Click below and be connected to advisors near you; additionally if interested in exploring gold investments further click on our resource tab.
