Understanding the Gold IRA: Common Questions

Retirement investing takes many forms. Most savers nowadays, particularly those earlier in their careers, start with an employer-sponsored savings plan such as a 401k or SIMPLE IRA. Generally comprised of mutual funds and ETFs themselves containing hundreds, if not thousands, of public stocks and bonds, many investors elect to go beyond these offerings into private options such as real estate, private equity and precious metals. In this post we will explore an an increasingly-popular form of retirement savings, the Gold IRA.

Let’s take a look at what a Gold IRA is, as well as some common questions that come up when discussing this type of investing in a tax-advantaged savings account.

What is a Gold IRA?

As introduced above, traditional tax-advantaged savings plans—like a 401(k), IRA or Health Savings Account (HSA) —often use mutual funds, stocks, and bonds to grow account balances through a broad portfolio of public market holdings. Depending on the performance of the overall market, this can generate significant gains for your retirement account over time.

A Gold IRA is operated in a similar manner to a traditional retirement account, but instead uses gold bullion as a vehicle for growth. Gold bullion is often maintained in the form of a coin, bar, or other piece of metal.

Why invest in a Gold IRA?

There’s an old saying, “Don’t put all your eggs in one basket.” Building a retirement portfolio follows similar thinking, in that you often don’t invest all your money in the same asset type. A Gold IRA allows you to diversify your retirement savings by placing some of your retirement into a new asset class.

Gold IRAs are also typically “self-directed” accounts, meaning you as the investor have complete control over them. This allows you to make decisions you feel are best for your situation and goals, investing more or less as you see fit, and on your own schedule.

Many view gold as a long-term investment, believing gold will likely be a valuable asset for many decades to come, and as the value rises so will its contribution to your overall account value while providing portfolio diversity.

Are Gold IRAs safe?

In short: Gold IRAs are safe. Provided you choose a reputable custodian for your Gold IRA you have little to worry about with regards to physical security and fraud.

But, like all investment accounts, Gold IRAs fluctuate in value, representing market volatility caused by many factors. So while gold has staying power in our society, the gold market does go up and down (often drastically). This doesn’t make a Gold IRA unsafe, it simply makes it an investment like any other and should be evaluated for suitability in one’s portfolio similar to all investment decisions.

Regarding the physical security of a Gold IRA, remember actual gold is involved. In most cases a third-party custodian will house the gold at a secure storage location. This is to ensure the gold is safe from theft, while also relieving you of the burden of individual storage (say in a closet or backyard).

What kinds of metals can I invest in with a Gold IRA?

Despite the name, you can invest in more than gold with a Gold IRA. With a Gold IRA you can purchase gold, silver, platinum, or palladium. Because of this variety a Gold IRA is sometimes referred to as a Precious Metals IRA.

Each metal varies in cost and return characteristics, as all of the above metals represent different markets. For instance, gold may have a great month, silver may not, and so on. Remember it is possible to invest in more than one metal at a time, so within your Gold IRA you can further diversify your account by investing in two or more types of metal.

How do I open a Gold IRA?

Your first step in opening a Gold IRA is to find an approved party for investing in the class with an IRA, such as NDTCO.

If you’re interested in opening a Gold IRA, it’s as easy as finding a reputable custodian and opening an account. Again, most Gold IRAs are self-directed, so you’ll largely manage these accounts yourself once they’re opened; many companies offer support and will guide you through the account opening process.

At New Direction Trust Company we offer a Precious Metals IRA that allows you to invest your retirement funds into gold, silver, platinum, or palladium. We offer excellent customer support that ensures you’re never truly alone on your journey, and have a list of safe depository providers to keep your investment safe.

Diversify your retirement and build a better future for you and your loved ones today.

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