Gold continues its strong year by locking in its second month in the green. This recent strength in the gold market points to potential gains for aggressive, entrepreneurial-minded gold owners, but also supports the idea that gold can be used as “wealth insurance” to help you reach long term financial goals.
When incorporated into a Self-Directed Precious Metals IRA, gold can offer greater peace of mind and a form of financial preparedness that may not come with a conventional retirement plan. How? Read on to learn why gold could prove to be a good addition to your retirement account.
#1: Gold is wealth insurance
First and foremost, “gold is wealth insurance,” says Philip N. Diehl, President of U.S. Money Reserve and former Director of the U.S. Mint.
You already buy home, life, and auto insurance to protect against life's uncertainties and help your family financially recover from an unexpected accident or illness. If you could safeguard your retirement in a similar way, would you?
“Just as you wouldn't own a home or car without insurance, you shouldn't have a portfolio without gold,” says money manager Jim Cramer. “Owning gold…is about minimizing risk.”
Gold has been significant in some way since it was first discovered. “When people look for a store of value, a currency hedge, a way to protect their wealth, they go to gold,” says CNBC. Learn more about the allure of gold and how incorporating it into your plans for retirement could prove beneficial. Sign up to receive U.S. Money Reserve's free and informative Precious Metals IRA Information Kit today!
#2: Gold can mitigate risk & put you in control
Precious metals, like gold, can have low or negative correlation to other assets, such as stocks and other paper assets. Gold can help balance your portfolio's performance, thereby reducing volatility and risk.
“Because gold prices generally move in the opposite direction of paper assets, adding a gold IRA to a retirement portfolio provides an insurance policy…this balanced approach smooths out risk,” suggests Edmund C. Moy, the 38th Director of the U.S. Mint.
More importantly, however, the gold and silver held within a Self-Directed Precious Metals IRA isn't subject to the mismanagement of others, like state and local governments.
Take, for instance, America's brewing pension problems. In Dallas, the fund for retired police and firefighters is underfunded to the tune of $5 billion, reports The Washington Post. That's a peek inside just one city, in one state. As of last August, the Financial Times reported that pensions run by companies in the S&P 1500 index were underfunded by $562 billion.
Retirement struggles persist at the national level too, with Social Security sitting on shaky ground. Since 2010, Social Security has been paying out more money than it has been collecting via taxes and come 2019, it will have to rely on its Trust Fund to keep up with benefits, reports Nasdaq. Unless Congress acts, the Trust Fund will be depleted by 2034 and an estimated 88 million Social Security recipients could face as much as a 21% reduction in benefits. For some retirees, a reduction of this amount could prove devastating.
When you plan for retirement with a Self-Directed Precious Metals IRA, your financial future isn't in the hands of Congress and isn't subject to the constraints of your state's budget or the whims of your company's board members. This type of IRA is self-directed, which means you're in control of your gains, losses, and degree of risk—no one else.
#3: Positive returns may be a strong possibility
Traditional IRA accounts are primarily composed of a select group of stocks, bonds, and mutual funds, all of which are subject to the woes of the economy. When the economy takes a turn for the worse, so can many IRA accounts. The same factors that weaken traditional IRA holdings can do the opposite to precious metals, as safe haven demand for gold and silver has proven to increase during downturns in the economy.
For instance, look at the stock market's anticipated performance in 2017 versus that of gold. “Strategists project the Standard & Poor’s 500-stock index will gain 4 percent on average in 2017—the lowest expected annual gain for the stock market since 2005,” reports the Bespoke Investment Group via The Washington Post.
The forecast for gold prices, however, seems more favorable. Financial consulting firm INTL FCStone sees a full-year range of $1,050 to $1,400 for gold. Already, the precious metal is “up more than 9 percent since the start of the year,” reports Kitco, and “continued global geopolitical risks should continue to drive prices higher.”
“Historical data shows that gold has given positive returns in 12 out of the last 15 years,” reports The Economic Times. According to the World Gold Council (WGC), gold returns have not only been positive over various periods of time, but they've surpassed short-term bonds, a staple asset in some conventional retirement accounts. Since April 2016, the average return on gold surpassed that of 3-month government bond returns by almost 8 percent, says the WGC.
#4: It comes with the peace of mind of a physical asset
Conventional retirement plans can give you the opportunity to put your money into assets you can't necessarily see or touch, including mutual funds, stocks, and ETFs. A Self-Directed Precious Metals IRA, on the other hand, allows you to put your hard-earned savings into the tangible asset of physical gold.
Physical assets like real estate and gold “can often provide a safety net for [individuals] who feel that having all their retirement savings [tied up] in the stock market might be too risky,” says Nate Hare, a certified IRA services professional.
Fortunately, when you purchase physical gold through an IRA you don't have to worry about taking additional measures to store, secure, and safeguard it. The IRS requires any physical precious metals purchased through an IRA to be stored in an approved third-party and off-site depository.
“Coins approved for use in an IRA must be held by an IRA trustee,” adds Diehl, not in your home.
When you choose to protect your retirement with a Self-Directed Precious Metals IRA, you gain a type of peace of mind that can only come with physical assets.
#5: Uncertainty is a certainty
There's a reason gold is known as a safe haven, a standard of wealth, and a safeguard against catastrophe. Time and again, it's proven itself to be a sanctuary for discerning wealth holders during times of economic turmoil. As hard as forecasters and analysts may try, no one can predict the future. How economic policies, tax rates, leaders, international relations, and even the value of the dollar will change over the next decade is anyone's guess.
Unlike many traditional assets, precious metals have been a store of wealth for centuries. Self-Directed IRAs allow for a wide range of portfolio options and give you the opportunity to diversify far beyond the limits of a conventional retirement account. Given today's volatile, uncertain economic climate, taking strategic steps to preserve your life savings is more important than ever.
If you're ready to take a hands-on approach to your retirement, call 1-844-307-1589 and learn more about U.S. Money Reserve's Gold Standard IRA program today. IRA Account Executives are standing by to explain how a Self-Directed Precious Metals IRA could help you achieve your financial goals. Call U.S. Money Reserve and worry less about tomorrow, today!