What is a Gold IRA?
An traditional individual retirement account, also known as an “IRA”, is a tax-deferred personal retirement plan (tax-deferred simply means that the account owner does not pay income taxes on certain deposits and on all gains until withdrawals are made).
A Gold IRA is a type of IRA in which physical gold is held in custody for the benefit of the IRA account owner. A Gold IRA essentially functions like a traditional IRA, except instead of holding paper assets, it holds physical bullion coins or bars (or other precious metals).
The IRS tax code permits investors to own highly refined precious metals (gold, silver, platinum, and palladium) in their physical form in this special investment vehicle. Having your own Gold IRA provides you with the freedom to physically invest in these precious metals in a convenient IRS-approved investment vehicle, while at the same time diversifying your retirement savings into a strong asset class.
Benefits of Gold IRA Accounts
The volatility of the stock market has worried investors for the greater part of 2019. However, in this volatility, investors flock to gold because this precious metal recently hit its highest level since 2013.
Historically, gold has enjoyed a reputation as being a wonderful hedge against inflation. Accordingly, investing in a Gold IRA may be the best means for you to protect your (and your loved ones’) assets from a volatile market, currency manipulation, trade wars, and inflation. As inflation occurs, the value of your assets (including your 401k, IRA, etc.) decreases.
However, gold and other precious metals have not historically suffered the same loss in value as other asset classes. Instead, precious metals actually tend to increase in value during a faltering economy and/or a weak American dollar. For this reason, investors should consider adding gold and and other precious metals to their retirement plans to act as a hedge against a weak economy/dollar.