7 Reasons Why You Should Invest in Gold

1. Outlasts Economic Downturns

Between 1998 and 2008, the U.S. Dollar weakened when compared to other currencies. During that same period, gold prices increased by almost 300 percent. An ounce of gold costs $1,000. By 2012, the price rose again to around $1,900. This makes gold a practical resource to help lower investment risks during economic uncertainty.

2. Has a Good Track Record of Retaining Value

People appreciate gold’s splendor. Since gold doesn’t rust or burn easily, it stays beautiful and recognizable. What’s more, the precious metal is flexible enough for expert goldsmiths to fashion into gold bar and stamp them.

3. Counters the Effects of Inflation

When the cost of living goes up, the price of gold does too. Investors want to safeguard their retirement. They enjoy precious metals to counter the effects of the shrinking paper currency and stock market fluctuations. To find out more, you can always start with a gold 401 rollover guide.

4. Always in Demand

Gold jewelry remains in demand. Particularly, internationally, the demand is growing rapidly. For example, the top two gold purchasing nations are India and China. The middle class is expanding in those countries. It’s common for their citizens to purchase gold jewelry to give as gifts.

5. The Gold Supply is Dwindling

At some point in time, there may not be enough gold to meet consumer demands. Gold mines aren’t as plentiful as they were centuries ago. Exploration budgets have been shrinking, yet the cost of mining continues to rise. The scarcity of gold makes it even more valuable.

6. Tax Credit Benefits Apply

The IRS offers what is called a Saver’s Tax Credit or a Retirement Savings Contributions Credit to investors who make qualified contributions to their IRAs. Taking that credit is your legal right to save even more money.

7. Takes a Minimal Investment

You can invest in gold based on your comfort level. No need to make a large purchase all at once. However, as you notice stock market prices declining while gold rises, you may want to add more gold to your portfolio.

How to Invest in Gold

A gold IRA is one of the best ways to own gold. Consider funding your gold IRA by roller if you have another type of IRA account. This way you can secure those stock market gains with a more stable asset: gold.

Traditional IRA – Tax -Deferred Growth

Buying gold with pre-tax dollars is how you would invest in the precious metal if the gold IRA is a traditional IRA. The tax-deferral benefit is key as it is with all other types of IRAs. You’re only taxed when you take distributions.

Roth IRA – Tax-free Growth

You can invest in gold using post-tax dollars if your gold IRA is a Roth IRA. Tax-free withdrawals are the benefit here.

Simplified Employee Pension (SEP) IRAs – Rollover Options

Invest in gold through your SEP IRA if you own a business or are self-employed. Although SEPs allow investing in gold stocks and ETFs, you’ll need to check with your plan provider to find out if it allows for purchasing gold bullion.

Savings Incentive Match Plan for Employees (SIMPLE) IRA – Roller Options

Employees who participate in a SIMPLE IRA plan offered by their employer can rollover to purchase gold. Just like SEPs, with a Simple IRA, you can purchase gold stocks and gold ETFs. However, to purchase gold bullion, it’s all based on your type of plan.

The disadvantage with SIMPLE IRAs is that there’s a 25 percent penalty for transferring money to another account. In addition, withdrawing funds aren’t allowed until you’ve had your SIMPLE IRA for at least two years. The waiting period could be longer, but again, it depends on your plan. This might not be an issue for you if you’ve had your account for longer than the mandatory wait time.

Diversify Your Portfolio with Gold Investments

During these times of stock market unpredictability, it makes sense to own gold to lower investment risks. An educational gold IRA investment guide written by experts is a great way to learn more about the correct way to purchase gold.

When the stock market goes up, then down, and repeats the pattern, you can remain confident. A gold IRA reminds you that all of your assets aren’t at the highest risk sitting in one paper-currency basket.