As the value of dollar assets continue to decrease or stagnate due to devaluation of the dollar, no one is more at risk than individuals who are saving for retirement; hence the frantic search for retirement directions. These individuals need to hedge their assets against rising inflation, currency devaluation and political risk among other things. The best way to do this is investing in gold IRA. Traditional retirement programs like the 401(k), Roth IRA and traditional IRA cannot cushion the investor against these adverse effects. At best, investors only get the amount of money they saved because any interest will compensate for inflation.
Why Buying Gold is Important
There is a huge industrial demand for precious metals like silver and gold. Since these metals are also used to make jewelry, their demand is expected to increase in the next few years as a large fraction of the global population becomes middle income earners. Increased demand with a limited supply translates to one thing, hiking prices. Buying gold right now means that the value of your investments will increase much faster than the current inflation, dollar devaluation and interest earned by bonds and mutual funds combined. Therefore, every investors needs to start thinking about investing in gold IRA.
How to Invest in Gold
Gold is a commodity like any other, so anyone with cash can buy physical gold in the form of coins, bullion or bars. While there are people with strongrooms and secure safes in their homes for keeping physical gold, many people usually hire gold IRA companies with secure storage facilities for this purpose. Gold is bought and sold at the current spot price, so the market determines the value of your holdings now and in the future.
Investing in Gold IRA
An Individual Retirement Account is governed by many rules. For instance, traditional retirement accounts can only hold dollar assets. The account managers are only allowed to invest in low risk investments like mutual funds, bonds and company stocks. This is the main reason why the gold backed IRA was created. It is a special Individual Retirement Account that allows contributors to hold physical gold as well as gold backed ETFs as well as the stocks of companies that mine or deal in gold. Upon maturity of their accounts, they can sell off their assets at the prevailing prices and get their money.
Benefits of Investing in Gold IRA
As mentioned earlier, a gold investment allows you to beat inflation as well as the devaluation of the dollar by the Federal Reserve. Secondly, the spot price of physical gold has been increasing, and is expected to continue increasing, at a faster rate than the interest paid on any government security, mutual fund or company stock. Thirdly, the spot price of gold is determined by global demand and several other factors that no single government can influence. On the other hand, the Federal Reserve reserves the right to devalue the dollar whenever it sees fit. As the global demand continues to increase and supply remains the same, it is expected that the demand for gold will hit the roof in the coming years.