Gold Individual Retirement Account – A Financial Plan for The Future

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There are a good number of retirement plans that people put in place to ensure that they retire in peace. These plans include 401(k), Solo 401(k), Simple 401(k) Traditional IRA, SEP IRA, Roth IRA and Simple IRA. All these plans have their specific targets, advantages and disadvantages. 

One addition that is fast gaining popularity is the Gold Individual Retirement Account (IRA) also known as Precious Metals IRA. In the face of the fluctuation in the economic and political climate world over, a good number of people are switching to precious metals as a means of investment. This does not however mean that the other forms of retirement plans are no longer viable. You can check out this site for more information on the viability of afore mentioned plans: https://www.businessnewsdaily.com/7459-small-business-retirement-plans.html

In this article, our focus will be on gold IRA and the different forms of investing gold for retirement. So stay with us for more details. 

Different Types of Gold Individual Retirement Accounts 

Gold IRAs work just like every other retirement account. The only difference is that it gives the account holder more control over investment decisions and allows you to add precious metals that are approved by IRS to the portfolio. 

Just as with other retirement accounts, with precious metals IRA, you can invest your retirement savings whether pre or post tax and then receive the distribution in future. Additionally, there are different types of these accounts that come with specific tax benefits. 

There are basically three types of precious metals IRAs and they are as follows:- 

Traditional or Conventional Gold IRA

In this type, your contributions and gains are not taxed; similarly, the contributions in most instances are tax deductible. The IRS limit for annual contribution is $5,500 for those under 50 years and $6,500 for those above 50. If you use pre-tax IRA, your distribution at retirement will be taxed. 

Roth Gold IRA

This is account is funded with after-tax money and it operates just like the conventional Roth IRA. So you make your contributions after you have paid tax on the money and this means that you will not pay tax on the distribution at retirement. 

SEP Gold IRA

This is specifically designed for people who are self-employed or run a small business. Contributions into this account are not taxed. However, it has a higher limit for contribution which is $53,000 or 25% of the holder’s income depending on whichever option is lower. 

For all these three account types, you need a custodian and there are rules that apply to all of them. You can look up how to open retirement accounts at Metal Resource and other reputable online platforms. Detailed research will also help you know all the rules and regulations of this investment and ensure that you don’t run afoul of them at any time. 

Different Ways of Investing In Gold

There are different ways in which you can benefit from investing in gold for your retirement. You can buy and store the physical commodity or you can buy shares/stock in a mining company or mutual funds and futures. 

In this segment, we will discuss these different means of investments. 

Gold ETF 

This precious metal exchange traded funds allows an investor to have access to gold and its performance just as you would have with any other type of ETF. There are pros and cons with this investment (as is to be expected) but if one manages it well, it will serve a great purpose in your retirement investment portfolio. 

Gold as has been established over time serves as a hedge against inflation and helps to diversify one’s portfolio amongst other advantages. But the hassle of buying and storing the physical commodity is one that some investors might want to avoid.  This ETF gives one the advantage of the physical commodity without the hassles of logistics. 

Additionally, this kind of ETF can help you bypass possible higher capital gains taxes because the precious metal is held in a retirement account.  You can click here for more details on this. 

Gold Mutual Funds 

These types of mutual funds provide one with the benefits that come with investment in precious metals just like ETFs.  You can buy stocks and shares in mining companies and you do not have to buy the physical commodity. 

These funds are flexible and more easily affordable than buying the precious metal in its physical form. For example, an ounce of gold is an indivisible unit but not so with stocks and shares. So the threshold for investment is lower with mutual funds than with physical precious metals. 

Additionally, it is by far easier to liquidate these funds than the physical metals. This makes it highly useful in times of emergencies. 

Physical Form 

You can decide to purchase these precious metals in their physical forms and this is quite popular with many holders of gold IRAs. Bear in mind that you need to work with a custodian to be able to operate this kind of retirement account. It is illegal for you to store the precious metal yourself with a precious metal IRA. So a custodian does all the work of buying and storing of the metal but based on your say so. 

Ensure that you research properly to get the right custodian because that is the first step to the success or failure of a precious metals IRA. 

Conclusion 

A gold individual retirement account is surely a good financial plan for the future. But note that you need to really know what it is all about before you jump in with both feet. We have shared some insight on precious metals IRAs and also how you can invest in gold for your retirement. We believe that we have added a layer of information to your knowledge pool as you continue to research to get the best for your retirement plan. 

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