Gold has always had a certain appeal, even if we are to think about history and people’s fascination with this glittery metal. However, seeing how not all that glitters is gold, it’s important to understand that a gold investment can be the greatest decision of your life because it doesn’t lose its value even during inflation periods, when the stock markets collide, or during other times of political unrest. It’s also very durable and the best way to diversify your investment portfolio. Considering that the IRS allows people to invest in gold IRAs, it would be a good idea to follow this trend. Why? Well, in this article we will be talking about the incredible benefits of owning a gold IRA. 

What is a Gold IRA?

IRA is short for Individual Retirement Account and a gold IRA is a special account that allows investing in this asset. As a gold IRS investor, you can hold gold bullions in your account, gold coins, and even some other types of precious metals. It’s important to know that you cannot mix a gold IRA with any other type of retirement account as they are two different things even if, for the most part, they work on the same rules when it comes to distributions and contribution limits.

There are two types of gold IRAs that one can invest in. The first one is called a Roth IRS and can be set up with post-tax money. This means that you will only begin paying taxes when you start taking distributions when retirement comes. The other type can be bought with pretax money which means that you will pay taxes on what you withdraw when retirement comes. Then there are also the SEP gold IRAs which mostly work like the normal SEP accounts and are meant for self-employed people or those who work for small businesses.

Because you absolutely need to buy physical gold as an investment for this type of account, you are required to work with a custodian. Usually, the brokerage company where you opened the IRA or the bank can act as your custodian. There are also some other approved precious metals that you can invest in such as silver, palladium, and platinum. You can also convert a traditional IRA to gold, you can convert IRA to silver, and, lastly, you also have the possibility to convert IRA to precious metals. At the end of the day, it’s all about diversifying your portfolio which is one of the greatest benefits of this type of account, as you will soon see in this article.

Various Benefits of Owning a Gold IRA

·        Tax Benefits

The tax benefits that come with gold IRAs are the same as for traditional ones. This means that, as previously explained, the contributions that you make to normal IRAs are tax-deductible while the withdrawals that you make from Roth IRAs are tax-free. It’s no secret that if you choose to invest in precious metals and you keep them for longer periods of time you may have a big tax liability to deal with. This is where gold IRAs come in to save the day because if you open one, you will end up increasing your profit protection when it comes to those huge tax bills.

·        Gold is a Stable Investment

Gold is also one of the most stable, secure, durable, and risk-free investments that you can make. Its value can remain the same or even increase long-term which makes it much more preferable to bonds or stocks. Those can change their value within a matter of days and you may end up with almost nothing in your savings. From the dawn of time, gold has been the best type of investment possible because it’s simply the most stable asset that you can have. Just think of times of political unrest or economic instability. The first thing that you think of is withdrawing your investments to avoid losing them. This doesn’t apply to gold which can keep or even increase its value even during disadvantageous environments. So, if you prefer stability, safety, and having control over your assets, a gold IRA can be the best choice.

·        Greater Control of Investments & Diversification

Just like with liquid investment types, it’s important to also have full control over your gold investment status and growth. Gold IRAs are usually self-directed which means that the person who opened them also has full control over all the decisions that have to do with any type of investment. This is another reason why gold IRAs are so beneficial. Most investors find this to be reassuring as they know that they always have full control over the entire situation and where their savings are going next.

As for diversification, this is a mandatory advantage to have because it helps you split the risk between multiple assets. This means that in case one of them suffers, your investment account will still be there and maintain most of its value. Unfortunately, not enough people are aware of this incredible benefit of precious metals IRAs but recently, things have started looking up. More and more people are setting up gold IRAs for exactly this purpose.

·        Protect Against Inflation

Last but not least, it’s no secret that retired people fear one thing the most when it comes to their investments: inflation. Because of the phenomenon called inflation, the cost of services and goods increases over a certain period due to various reasons. This also means that savings start eroding over time and they lose their value little by little. Thankfully, gold doesn’t fall into this category as it’s one of the few types of investments that don’t lose their value no matter what happens.

This is mostly the reason why gold IRAs should be your number one choice for investments if you are a retiree. Gold acts as a hedge against inflation and therefore protects you from its dangers. A simpler way to explain how inflation works is by giving an example. Let’s say that a person saves $100 at one point in their lives when they are 30 years old. Thirty years from then, the $100 savings will not be enough to buy the same amount of goods. This is what inflation does to the value of money. Gold is not affected by this process which is part of the reason why it’s considered the best type of investment to have. Cash on the other hand is very volatile and prone to extreme changes usually caused by inflation which is also caused by numerous political and economical factors.

Summary

All in all, it seems that the benefits of owning a gold IRA are not only numerous but also incredibly advantageous for a person who wants to keep their retirement savings safe. With a gold IRA, you can be sure that things such as inflation or other political and economical factors will not affect the value of your investments. Gold is eternal and, as we have seen, is not affected by all of those things and maintains its value intact. Besides this, investing in gold or precious metals in general offers you the opportunity to diversify your portfolio and have much better control over it.