You’ve decided that adding gold to your retirement portfolio is a smart move, but where to begin? You’ve heard of gold coins and bars, but there are also gold ETFs your IRA custodian can buy over the stock exchange. What are the differences, and which one is right for you?
Here are three important points to keep in mind when deciding how to diversify with gold:
1) In an ETF, you don’t actually own the gold.
When you purchase a share of a gold ETF, you’re not buying physical gold, or even laying claim to gold that someone else is storing on your behalf. What you’re really buying is a share of a trust—what is often referred to as a paper-based asset. While that trust may buy and sell gold, you’ll never be able to take possession of it; holding shares of a gold ETF does not entitle you to any amount of physical gold.
When you open a gold-backed IRA through U.S. Money Reserve, your retirement funds are being used to purchase physical gold, providing you with all the benefits of owning a tangible asset that exists outside of the stock exchange and traditional banking system. And when it’s time to receive distributions from your IRA, you have the option to take physical possession of your gold and have it shipped securely to your home, where you can do with it as you see fit.
2) Gold ETF fees can become substantial over time.
One popular gold ETF—GLD—charges 0.4% in fees per year. The higher the price of your shares rises, the more you have to fork over in fees each year.
When you add physical gold to an IRA through U.S. Money Reserve, you pay a flat annual fee that doesn’t increase based on the market price of the gold in your account.
3) Increasing ETF fees can directly impact the performance of your portfolio.
Simply put: the more money you’re paying in ETF fees, the less you’re able to apply toward your retirement strategy. Over time, that can make a serious dent in your overall savings.
As you can see, there are some staggering differences between gold ETFs and physical gold when it comes to saving for retirement. Simply put: there’s only one real way to add gold to your retirement portfolio—and that’s by having your IRA custodian buy the real thing.
