Are Gold IRA Investments Worth It?

Have you ever considered investing in a Gold IRA? When many people are so obsessed with stocks, bonds, and other bank or realty investments, they fail to realize what they are missing out with a Gold IRA. For starters, a Gold IRA is a kind of Individual Retirement Account that lets an investor have his physical gold, platinum, silver, and palladium rather than the usual paper-based assets like cash, bonds, and stocks. Created in 1997 by the U.S. Congress, the Gold IRA became an excellent alternative to those building up their nest eggs with an actual gold. 

But to qualify for an IRA, they must meet a particular criteria first such as passing the IRS fineness standards and be under the custody of an IRA Trustee and not the owner himself. Moreover, these golds have to be stored in a depository approved by the IRS, which means that you can’t see just stock on gold at home.

Now, you might be wondering why gold is an excellent retirement investment. A Gold IRA is appealing to an investor who wishes to have a diverse retirement portfolio. Unlike conventional mutual funds or stocks, Gold IRAs are immune to inflation since its price move in the other direction than that of traditional paper assets. You can go on and have other investments, but the risk is lessened by a Gold IRA, which is perfect as a long-term back-up.

If you take a look at the trend of gold prices over the last 15 years, gold prices have considerably increased by as much as 700%. You don’t usually get that much earnings from the bank or the stock market. In fact, it’s totally unheard of. Only Gold IRAs can grow your money regardless of the status of the market. As one of the nature’s hard asset, gold reaffirms its value as real money, the kind of money that is not printed or debased.

But despite these benefits, only a small fraction of the population invest in Gold IRAs. It’s perfectly understandable though since doing so entails a very complicated process that disheartens many. First off, investors must look for an IRA custodian or trustee who also has an approved depository. Second is to purchase the actual gold and make arrangements for it to be transferred to your chosen depository while at the same time making sure that the trustee can account for it.

And because our economy has experienced much crisis throughout the years, more and more investors realize how rewarding a Gold IRA investment is. Its popularity also keeps on growing because more companies made the process easier for everybody.

One of the most crucial aspect when investing with a Gold IRA is looking for a reliable custodian/ broker. You must first find a broker to purchase the gold followed by a custodian to make and set-up the account. In turn, the company will hold or store the physical gold itself. Custodians are in the form of Federal-approved trust companies, banks, brokerage firms, and credit unions to name a few that offer custody services to financial advisors and individual investors. They also have access to a long list of metal dealers all over the nation that comes in handy.

When reviewing gold IRA companies to entrust your gold with, look for the following qualities:

⦿Transparency – ask everything regarding costs to avoid paying for any hidden fees you were not appraised of in the beginning.

⦿Track record – this company must be in good standing with the Business Consumer Alliance or the Better Business Bureau.

⦿Flexibility – look for a company that will provide a tailor-fit solution to all your investing needs.

⦿Qualifications – Only transact with licensed companies that possess the applicable registrations, bonds and insurance coverages to safeguard your lucrative investment.

If you don’t want to deal with custodians, open a checkbook IRA. However, you need to be aware that it has caught the attention of the IRS and establishing one is likewise quite complicated. If you are considering of going with this one, talk to a financial advisor and secure a business checking account and an LLC as well.

We have talked about how great an investment a Gold IRA is, but don’t forget that it also has risks just like any other investment in the market. Nobody can predict for sure whether a gold’s price will go up or down in the future. But just remember how gold assets fared in history and were optimistic that yours will do great as well. And just to alleviate your fears, keep in mind that when you do well with gold, not the same can be said with your paper-based assets and vice-versa. So, in a way, that’s quite reassuring. You can’t have it both ways, so you don’t get to lose it all.

One more thing you need to be careful with when handling a physical gold is the likelihood of having it stolen from you. But since depositories are insured, you still have peace of mind just as long as the value of your investment is not higher than that of the stated value by the custodian. Custodians can likewise be lured by the glitz of a real gold, which is why you should only do business with legitimate ones and those that have an insurance coverage on financial transactions.

Lastly, acknowledge that Gold IRAs are considered as “alternative investments.” Talk to a financial advisor first to find out if this investment is a good fit for you.