Gold can be an attractive asset for seniors looking to invest, although it should not be relied upon as a passive income stream. Investors should allocate a smaller percentage of their portfolio towards gold and rebalance annually.
Gold bars offer more liquidity than other forms of investment such as ETFs or IRAs, making them easier to buy, sell and store.
It’s a good store of value
Gold can provide seniors with a sense of financial security as a store of value. Unlike stocks and mutual funds, physical gold isn’t tied to an institution’s economic fluctuations or bankruptcy – thus making it less vulnerable. Plus, selling it off if necessary is relatively straightforward with gold bars being readily available from trusted dealers as well as major retailers.
Gold can provide your retirement portfolio with diversification and help defend against inflation, but investors should keep in mind that gold’s value fluctuates, which means you should limit it to no more than 5–15 percent of total retirement savings. Seniors should seek advice before investing in precious metals.
Dan Burrows has been Kiplinger’s Senior Investing Writer since 2016. A former New York Times and Boston magazine journalist, he also reported market news from the floor of the New York Stock Exchange for SmartMoney, CBS MoneyWatch, InvestorPlace as well as appearing on CNBC’s Mad Money with Jim Cramer as well as hosting an equity video segment weekly on AOL DailyFinance.
It’s a good hedge against inflation
Gold has long been considered an effective hedge against inflation; however, over the last 30 years it has fallen far short of that mark compared to stocks which have consistently outshone it. That is why diversifying your retirement portfolio by including investments beyond gold alone should be your goal.
If you want to purchase gold, consider opening a Gold IRA. These accounts offer tax benefits as they allow investors to invest in mutual funds and ETFs related to precious metals investments, plus allow for direct ownership.
Alternately, physical gold coins and bars from dealers such as APMEX may also be purchased as investments; however, such purchases should be undertaken carefully as this form of investment entails risk; it would be wise to consult a financial adviser prior to making this decision.
Gold IRAs can be an excellent choice for seniors looking to diversify their retirement savings, offering up to $7,000 of contributions annually. Although gold doesn’t increase as quickly in value like traditional or ROTH IRAs, withdrawal before age 60 incurs a 10% penalty fee; therefore, as part of an asset allocation plan rebalance it annually is recommended.
It’s a good investment
As you approach retirement, prudent, low-risk investing becomes even more critical. Your decisions at this stage of life will have a direct effect on both your retirement income and the legacy you leave to your loved ones. A gold IRA provides an efficient and safe means of diversifying your retirement portfolio.
Gold can be an attractive investment choice for seniors due to its stability and limited price fluctuations, making it a good way to hedge against inflation and protect savings against future price drops. But precious metals don’t offer as much passive income potential compared with stocks or bonds; therefore Joshi advises using precious metals only as supplements in your retirement portfolio, not primary sources.
Gold can be invested in through various avenues, including individual retirement accounts (IRA). A gold IRA enables you to use some of your retirement savings for precious metal investments like gold, silver and platinum without incurring IRS rules regarding traditional 401(k) plans or other traditional investments – though please remember that an ordinary IRA provides more advantages when withdrawing early (including no 10% penalty fee for funds taken out before 60).
