Monday , 20 May 2024

The Pros and Cons of Retiring with a Gold IRA

For many of us, it makes tremendous sense to open a gold IRA account for retirement. This account has the ability to accrue massive value over decades as you work toward your retirement future. There’s never a perfect investment in this world and, in some cases, opening a gold IRA might not make sense for your personal wants and needs, but investing in gold is definitely close to ideal for everyone and this article presents the pros and cons of retiring with a gold IRA. 

Pros of Retiring with a Gold IRA

  1. The value of gold historically increases over time.
  2. Gold provides wealth protection against a weak US dollar.
  3. Precious metals hedge your bets against inflation.
  4. Gold combats the deleterious effects of deflation.
  5. The demand for gold is on the rise.

1. The Value of Gold Historically Increases Over Time

When you look at the historical growth of gold over the last 50 years, you’ll see how valuable it has become. In fact, since 1970, the value of gold has increased by 10% per year on average. Does this mean gold gains 10% more value every year? Absolutely not, but it shows us that this commodity grows steadily over time. It’s a rock-solid investment that generates tremendous value as time passes by.

2. Gold Provides Wealth Protection against a Weak US Dollar

Throughout the world, the U.S. dollar is looked upon as a highly respected currency but too much stimulus and economic uncertainty has created weakness in the dollar. As a result, investors are beginning to put their money in gold because it’s a safe haven against weakness and inflation and, when this happens, the value of gold becomes even stronger. That causes precious metals IRAs to increase in value, over time, because gold investments protect against U.S. dollar weakness.

3. Precious Metals Hedge Your Bets against Inflation

It’s also important to realize that gold is a historic hedge against the devastating effects of inflation. Over the past 100 years, the stock market has crashed periodically. Gold tends to increase its value while this is happening.

At peak inflation, fiat currencies like the U.S. dollar become weaker and begin losing their value. Gold thrives during periods of inflation. In fact, gold makes its biggest monetary gains when inflation is underway. This makes it a great way to combat inflation caused by a weak U.S. dollar.

4. Gold Combats the Deleterious Effects of Deflation

From time to time, the economy will experience a period of deflation. While this is happening, businesses slows down and less money is available. This recently happened when the coronavirus pandemic first started. We were forced to stop working in many industries, which led to a recession. During deflation, fiat currencies get weak and gold gets strong.

5. The Demand for Gold Is on the Rise

Gold demand is on the rise and getting stronger. Major countries like Russia, and China buy tons of gold each year in case their currencies ever collapses. Other countries want large hordes of gold to make jewelry and other products look flashy and ostentatious.

Cons of Retiring with a Gold IRA

  1. Extra expenses and fees
  2. Potential for fraud and theft
  3. Zero interest or dividend payouts

1. Extra Expenses and Fees

Many people are concerned about the extra expenses and fees that go along with opening a precious metals IRA but administrators of many gold IRAs have been willing to waive set-up fees, administration fees, and storage fees in the first few years.

Find a custodian that offers fees at a flat rate to keep your custodial expenses down. Avoid paying on a sliding-scale because it gets more expensive as you invest more money in precious metals.

2. Potential for Fraud and Theft

Some precious metals custodians are stupid, plain and simple. They rip off their clients and steal their precious metals. It doesn’t happen that often but it does happen from time to time. Stick with the gold IRA companies with great reputations.

3. Zero Interest or Dividend Payouts

Unlike certain stocks and interest-bearing accounts, you will not receive interest or dividend payouts from gold investments. These physical precious metals accrue value because they are in demand and are considered legal tender in many places around the world.

Bottom Line

Precious metals IRA investing is often scary in the very beginning. People are afraid to make a mistake with their retirement funds but you have nothing to worry about because investing in gold, silver, platinum, and palladium is very safe.

Stop throwing away your financial future. Instead, take the necessary steps to protect it. Open a gold IRA immediately and work with top companies with impeccable reputations.