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When it comes to a discussion about Gold IRA investments, it is hard to look past tangible gold assets as a means to grow your retirement savings. Let’s face it, when you do an accounting of most other forms of investment, they eventually trickle down to being hedged or physically backed by tangible gold assets. This is how governments secure their treasury and those stockpiles of gold serves as the basis for the true wealth of any country or government.
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It stands to reason, therefore, that those with Gold IRA investments can benefit more by embracing physical gold assets as opposed to paper investments like ETF‘s and gold certificates. As such, it is very important to understand how best to secure and manage such an IRA.
What You Need to Know About Gold IRA’s:
While IRA investments in gold are far from being straightforward and are heavily regulated by federal laws on retirement savings and gold investments, these account form some of the most productive IRA’s available. This is an offshoot of direct investments in gold, which constitute some of the most attractive of the many options currently on the market.
Some of the reasons that establish the reliability of gold as an investment include:
- Constant high demand from industries that use gold as raw materials. Notable industries include the electronics and semiconductor manufacturing sectors as well as those dealing with jewelry. The high demand from these sectors keeps the gold market afloat and pushes the price on an upward arc on a regular basis.
- The numismatic value of coins made from gold makes it a really attractive asset not only for coin collectors but also for those who are eyeing a piece of history. In the US, gold coins are a great symbol of the growth of finance and economics in the country making it one of the more valuable pieces to keep; hence, adding “collectible” value to the coin assets.
These factors are backed by gold’s performance in times of dire economic conditions starting with the 2008 global financial crisis. Within a span of 4 years, from early 2008 to early 2012, gold posted a 300% growth rising in value from $400 per ounce to $1,600 per ounce. It bears mentioning that within the same period, most of the notable blue chip stock investments, bonds, ETF’s, and other paper currencies bottomed out resulting in many investors filing bankruptcy to protect themselves from further losses. Meanwhile, those who have made the decision to invest in gold, whether via ETF’s or physical gold assets, retained and further grew their assets at a time when the economy was most vulnerable.
This is where the insistence for gold IRA investments became notable. After 2008, when most investors, employees, retirees, and seniors suffered significant losses to their life savings, many turned to gold in order to hedge their assets. This is where the importance of gold IRAs is brought to the fore.
Physical Gold Assets via Gold IRA’s
According to federal regulations, IRA’s can be made to invest in physical gold assets provided
Once this step is done, it becomes a simple matter of instructing your appointed fund manager to purchase gold assets using the amount in your IRA. Again, because of federal regulations, all the assets will be kept in the custody of the fund manager and at no time can it be withdrawn by the investor. Still, the investor has complete control over acquisition and divesting strategies and this is something that the fund manager would be more than willing to work through for you, in order to grow your portfolio using gold.
As a last note on the matter, it is important to remember that despite gold’s almost assured returns, there are no forms of investment that are fully safe from risks. Thus, investment experts caution investors from putting all their money into physical gold assets.
It is best to diversify and properly allocate portions of your IRA to include stocks, bonds and mutual funds, on top of the physical gold investment. By doing this, you are shielding yourself from significant losses in the event that one investment bottoms out due to unforeseen circumstances.
Gold is the Way to Go!
Gold presents itself as a very attractive option for investors, but in the end, it still requires careful management and informed decision-making so investors can fully take advantage of its promised return. These investments present the most practical approach to putting your money in gold, so if you have yet to become a gold investor, perhaps it is high-time to assess your position.
Features of a Roth IRA Retirement Plan
There are many options for retirement planning. One of the more popular options is to open a Roth IRA account. A Roth IRA account is similar to the traditional IRA in many ways but there are some significant differences between the two. The key differences a Roth IRA has from a traditional IRA are related to the different tax benefits and the limitations on the IRA contributions.
Roth IRA Eligibility
Whether an individual is eligible to open a Roth IRA is mostly dependent on two factors. The determining factors are the person’s earned income and their tax status. To have access to a Roth IRA account a person has to have some form of earned income from sources such as salary, wages or profits from a business. An individual earning more than $112,000 in modified AGI is not eligible for the benefits of a Roth IRA. A married couple that has a modified AGI higher than $178,000 is also ineligible. The owner of a Roth IRA is allowed to maintain the account if their income surpasses these limitations, however some restriction will be placed on the amount of IRA contributions they are allowed to make.
Roth IRA Contributions
There is a set maximum level of IRA Roth contributions an account holder is allowed to make in a year. For a single person making $112,000 or less the maximum IRA Contribution they can make is $5,000. A single person who makes from $112,000 to $127,000 can make reduced contributions depending on how much money they make. For a married couple that earns less than $178,000 a year the IRA contribution limit is $10,000. A married couple that makes from $178,000 to $188,000 can make reduced contributions depending on their combined income.
Roth IRA Tax Rules
The contributions made to an IRA Roth are not tax deductible as they are with a traditional IRA account. The tax benefit of the Roth IRA is the tax free status of the account’s earning and the tax free distributions. Roth IRA distributions and earnings are tax free as long as the withdrawal is made after the account has been owned for 5 years or more and as long as the account’s owner is at least 59.5 years old. The IRA Roth account holder can make a withdrawal on the contributions without a tax penalty, due to the fact that the contributions are not tax deductible.
Having an IRA account is a great way to plan for a person’s financial security through their retirement years. Both the Roth IRA and the traditional IRA have distinct differences when it comes to the benefits and limitations for retirement planning. IRA accounts have a lot of investment options such as certificates of deposit, bonds, gold IRA products and more. Contact a financial planner to fully understand which IRA account options are best for you.
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