Planning for retirement is an essential financial step that everyone needs to consider. There are plenty of ways for you to plan for this part of your life, saving as much money as you can for when you no longer have a job. Alongside your 401k from work, most of you will consider an IRA of sorts. This stands for an individual retirement account, and it is basically a savings account where you make regular contributions, though it comes with some tax advantages to help you get the most out of your money.
However, did you know that there are also gold IRAs available?
What is a Gold IRA?
Simply put, a gold IRA is a special account where you can hold physical gold bullion. In fact, you don’t just have to hold gold in it – you can hold silver and other precious metals in your IRA as well.
How is this different from a standard IRA?
With standard IRAs, you will hold paper assets in your account. This typically includes stocks, bonds, and various other investments. The key difference with a gold IRA is that you keep physical assets – like gold or silver – in your account instead.
Another big difference is that you have way more control over your investments with a gold IRA. Most of the standard IRAs out there will not be self-directed, so you have to adhere to someone else’s investment decisions. For instance, you can’t go out and individually select the stocks and bonds you want to invest in. If you have a gold IRA, you can manage your holdings and make all the choices by yourself.
There are also some strong arguments that a gold IRA presents higher yields than a standard one. This is because gold is known as an asset that increases in value for many years and is rarely negatively impacted by common market forces. With a standard IRA, you are impacted by certain market factors – like businesses going bust, economic downturns, or a pandemic. Thus, you could say that a gold IRA is a safer option.
How do you open a gold IRA?
All you need to do is find a gold IRA provider, like Century Gold. From here, you select the type of gold IRA that you want to invest in. Much like traditional IRAs, you have traditional and Roth gold IRAs to choose from. Once you’ve decided which one you’d like, you have to pick a funding method. How are you going to invest in your gold? Next, you need to pick a custodian, which is a fancy word for the facility that holds your gold for you. That’s a key thing to note: you won’t physically keep the gold yourself with a gold IRA. You own it, but it is kept in a secure facility for you. Be sure you look around and find a custodian that you can trust to keep ahold of your valuable asset.
When you reach the age of 59 and six months, you can withdraw your funds without paying any penalty fees. Here, you can either withdraw the gold itself, or you can withdraw it as cash. It’s up to you, but this just goes to show the different IRA options available when you plan for retirement. Instead of going for a standard IRA, perhaps you should consider something a bit more diverse?