What do you get by investing in a gold investment retirement account? You are turning part of your retirement nest into gold. However, is placing a gold IRA in your portfolio the right move? Not all IRA accounts allow gold investments, but this article should help you understand what to look for in an IRA to see if it allows you to build a golden retirement egg.
Key Findings
• A Gold IRA is a self-managed individual retirement account that invests in physical gold as well as other precious metals.
• A gold IRA often has higher fees than a traditional IRA or Roth IRA, which invests exclusively in stocks, bonds, and mutual funds.
• A gold IRA can serve as a good hedge against inflation, but it is also concentrated in one asset class.
Gold Price Shift
The price of gold per ounce ranged from $255 in September 1999 to a high of $1937 in August 2020. As of March 2021, gold was worth approximately $1,737 an ounce. So there was a significant increase, but also some contraction.
A gold IRA is a variation of an individual retirement account (IRA) that allows investors to own physical gold, silver, platinum, and palladium instead of more conventional assets such as cash, stocks, and bonds, to which regular IRAs are limited.
The ability to use gold and other materials as securities in the IRA was created by Congress in 1997, says Edmund S. Moy, chief strategist at Fortress Gold, who, as a former director of the US Mint, oversaw the largest production of gold and silver coins of the world.
Gold IRAs attract investors who need a diversified retirement portfolio. “Because gold prices typically move in a balanced approach smooths out risk, especially in the long run, making it a smart choice for retirement investments such as IRAs.”
During his tenure as director of the Mint, Moy says there was little demand for gold IRAs because they involved a very complex deal that only the most persistent investor was willing to pursue.
“You must find an IRA trustee or trustee along with an approved depository. You then need to buy approved gold or other precious metal and deposit it in a depository in a way that the custodian can reflect,” Moy explains.
However, after the general store. Result: a steady rise in gold IRAs.
Then, of course, the impact of economic and world news. “Strong interest in gold IRAs continues due to the potential inflationary impact of the Federal Reserve’s stimulus programs and the sharp increase in geopolitical risks,” Moy says.
