Choosing a retirement plan can be a challenge, but the varying opinions of financial agencies and advisors do not make the decision any easier. This is especially true when it comes to a gold retirement plan because many investors are unable to see the potential of precious metals as a vehicle for long-term savings.
While the value of gold has fluctuated drastically throughout history, the fact remains that it is still an unchangeable asset even in times of economic turmoil. In fact, it has been said that gold is the ultimate way to preserve capital and reduce volatility no matter what other assets you currently own. If you are thinking about diversifying your portfolio, Regal Assets is equipped to answer all of your questions and help you identify opportunities for investment.
How Is a Gold Retirement Plan Different?
As far as taxes, a conventional retirement plan is much like a self-directed plan. However, they do not allow you to diversify your portfolio with physical gold. This is primarily due to the circumstances that surround ownership, such as storage and insurance. To include gold coins and bullion in your account, you must first find a trustee that can provide you with a self-directed plan. Then you can transfer funds to the new account.
Using a self-directed IRA or 401(k), you can purchase precious metals rather than relying on a bank or brokerage firm to handle your investments. A gold retirement plan gives you the authority to make your own decisions without being limited to traditional assets like stocks and annuities. Furthermore, a self-directed plan outlines standards procedures for transportation and custodial duties until your are ready to liquidate or take possession of your gold.
What Happens to My Existing Plan?
At this point, you are probably wondering how your existing retirement plan will be affected by this decision. Fortunately, rollovers are available for qualified retirement plans or you can transfer funds from your current IRA. If you are just beginning to explore the world of precious metals, a gold retirement plan is easier to maintain when the value is higher. Therefore, a rollover can minimize the cost of annual maintenance fees, which often total more than $200 per year. For those who do not have funds to transfer, it can take several years to build an account that is large enough to effectively absorb these fees. Either way, it is a small price to pay for the management and protection of your investment.
The most important thing to remember when you decide to rollover your funds is that it takes time to complete the process. If you are interested in a gold retirement plan, most companies start with a consultation before allowing you to choose a new trustee. Once you have selected which company you want to work with, you can submit the required forms to request a transfer. The trust company is then responsible for opening the account, and you can purchase gold and precious metals as soon as the funds have been made available. This can take up to two weeks in some cases.
Including Gold in Your Retirement Plan
Now that you know how to set up your account, there are certain types of precious metal that are acceptable for a gold retirement plan. These standards are enforced by the IRS to guarantee purity and prevent counterfeiting. At this time, physical gold assets that are approved for use in a self-directed plan include:
• Uncertified American Eagle coins
• Australian Kangaroo coins
• Austrian Philharmonic coins
• Canadian Maple Leaf coins
• Credit Suisse/PAMP Suisse 0.999 bars
• U.S. Buffalo Uncirculated coins (no proofs)
• Bars and rounds produced by a national mint or an accredited manufacturer (0.995 or higher)
It is also crucial to distinguish between proof coins and bullion. This has a significant impact on the value of your gold retirement plan. For instance, bullion is priced based on the overall content of precious metal. This means that a heavy gold bar will be worth more than a single coin. A proof coin, on the other hand, is made using a complex minting process and a special type of dye. These highly detailed coins are then subjected to a mint inspection and inserted into a plastic case for extra protection. Prices are determined by a specific set of criteria, such as rarity, condition, and demand. While a proof is known for its numismatic value, some coins cannot be included in your gold retirement plan.
Why You Should Invest
Despite the unpredictability of the market, there are still many benefits for people who choose to invest in precious metals. Here are four reasons to diversify your retirement portfolio with gold assets.
Gold will retain its value in the event of an economic crisis. As a matter of fact, it is generally advised that you invest at least five percent of your assets in precious metal even if you don’t buy into theories that predict the eventual demise of the paper dollar.
Gold offers protection as the value of currency decreases. A gold retirement plan is known as an inflation hedge because it can help prevent or at least minimize a loss on your investment.
The return on precious metals has skyrocketed in the last several decades. With careful planning and calculation, you can increase your profit one thousand times over. For example, the price of gold in the early 1970’s was approximately $35 per ounce. In today’s market, that would sell for more than $1200!
Gold is an unquestionable commodity. Other types of investments exist only on paper, but precious metals are considered a hard asset for a gold retirement plan because they can never be devalued. A stream of revenue cannot be claimed if there is no documentation to support it.
Secure Your Future
As you can see, gold represents an ideal standard of wealth that has remained constant as an investment option. By diversifying your portfolio, you are ultimately contributing to the comfort and security of your future. That is why many advisors encourage you to use tangible assets as a way to offset the risk of traditional investments. At Regal Assets, an account specialist will guide you through the process of setting up a gold retirement plan, creating a safe foundation for your finances.