Regardless of age, any investor can benefit significantly from buying a gold-backed IRA. Here are some of the key benefits:
1. Investment Diversity
One of the most important reasons why you should seriously consider investing in a gold IRA is to diversify your investment. Diversification with precious metals enables you to create a well-balanced investment portfolio that is protected from volatility and declining markets. Markets have become more risky and volatile due to the worldwide economic uncertainty, making precious metals a necessity for all investors.
The forces that determine the price of gold are often in direct opposition to those that control paper assets such as, real estate, treasury bills, mutual funds, stocks, and bonds. Simply put, the price of gold tends to increase when other financial assets are decreasing. This makes it an effective diversifier, because it is more stable in the market, and can help reduce your portfolio risk.
2. Preserves Wealth and Purchasing Power
When paper investments like stocks decline in value due to global economic instability, investors run to gold as a safe haven. However, unlike paper money that can be printed on demand, gold is mined, and that process takes time. Because it is scarce, it is highly sought after by many people. This has led to a steady increase in the price of this precious metal over the years; a trend which is expected to continue in the future.
Besides being able to preserve its purchasing power against inflation and the declining dollar, gold investment will give you the peace of mind knowing that your financial future is secure. No more worrying about losing your life savings due to economic factors, which are out of your control. In other words, it enables you to live your retirement years free of financial stress and anxiety, just as you have always wanted. This is what makes a gold-backed IRA a smart investment choice.
3. Tax Benefits
Another reason to consider gold IRAs is because they provide you with tax benefits that other investments don not offer. When you invest in gold, you will be able to accumulate wealth year after year without being taxed. This is because gold falls under income investments, which are tax-deferred. You will only pay tax when you are ready to withdraw your investments.
4. Safe Storage
Owning physical gold comes with its fair share of risks, from theft to counterfeits. However, these risks can be avoided by investing in a gold IRA. This is because an investor’s gold is stored in IRA-approved depository facility that is completely safe. It is the responsibility of the gold IRA company to authenticate, transport and safely store your gold. This means that as an investor, you never handle the physical gold yourself, which reduces the risks of it being stolen. It is important to keep in mind that for any gold to be accepted for an IRA investment, it must have at least 99.5% purity. Any purity value below this will be rejected.
5. Highly Liquid and Portable
Lastly, gold is extremely easy to convert into cash, unlike most financial assets. You can buy and sell gold 24 hours a day without any delay or difficulty.
As an investor, you have a lot to gain by buying a gold-backed IRA. It’s one of the smartest ways of ensuring financial stability during your retirement years.
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- Adam Baratta
- Morgan James Publishing
- Kindle Edition
- Liam O'Flaherty
- Publisher: CreateSpace Independent Publishing Platform
- Edition no. 0 (05/13/2013)
Last update on 2020-03-19 / Affiliate links / Images from Amazon Product Advertising API
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