IRA accounts are individual retirement accounts and they provide certain tax advantages. There are several types of IRA depending on allowable limit on yearly contribution , when the money can be withdrawn and other factors. You can use an IRA along with a 401(k) or as part of an overall investment portfolio.
If you are new to investing in individual retirement accounts you may be lost as to which one to choose and how to manage it. From the bitter experience of 2007-08 depression , it is anyones guess that the future of stock market is unsure . So what can you do ? You cannot become Auric Golfinger , the villain of 1963 James Bond film Goldfinger and keep USA hostage by buying up lots of gold .On second thought , can you ?
Gold is one of those very few substances that have always increased in value. Hence, it is a good idea that you invest your money in gold IRA .
You can rollover portions of your I.R.A to gold. This is called gold rollover IRA . By this mechanism you can protect your investment and guarantee that you will not be gambling your future in a volatile stock market. You can also use gold to protect your retirement from inflation. However, most of the people are new to the concept of an I.R.A to gold rollover and they have no idea where to go or what to do.
Now how can you create an I.R.A account? What is self directed I.R.A ? How do you plan for retirement accounts ? More on it later.
Why invest in GOLD ?
– has maintained its value throughout the ages .Gold is the most reliable monetary system all over the world.
– has shown the most steadily increasing trend in value whereas the value of financial assets , stock markets and real estate has been volatile over the years. Had you put $ 20,000 into gold in 2003, it would have been worth $ 126,000 today ! Thats over 600% return on investment.
– has been an excellent hedge against inflation, because historically its price tends to rise when the cost of living increases.
-is called the crisis commodity since it retains its value during financial uncertainty and political unrest.
-is also an excellent way to diversify your portfolio and protect the wealth you have created in the stock and financial markets .
And finally, some of the largest companies of the world such as JP Morgan , Goldman Sachs and Morgan Stanley are buying gold. This may be a hint to whats in store .
In a self-directed individual retirement arrangement, the account owner is required to make investment decisions on behalf of the retirement plan . IRS regulation requires that the current custodian or a qualified trustee should cling to the assets on behalf of the owner. In this type of I.R.A , the owner can give direction to invest a part of the fund into gold. The gold, however , has to meet some pre-established purity standards. This type of I.R.A is the easiest way to invest in gold.
A self-directed I.R.A is but a regular IRA, except that you have to choose how your funds will be invested instead of the trustee or custodian. You have the flexibility to invest your money in whatever way that you deem comfortable. It can also ensure that you are always aware of where your money is and how it is being invested.
What happens to the gold ?
You dont get the delivery of gold after you have purchased it. Thats not how it works . Gold that is delivered to you will be considered a disbursement of the account. Therefore, if you decide to put some money toward gold, that precious metal will be delivered to a designated vault.
The depository will depend on the custodian of your choice. You will be notified when the gold reaches the depository and you will never have to bother about your gold being taken out of the depository or exploited by anyone but you.
Things to look out for :
Whether you are new to investing in gold or you have done it before , it is wise to go for a company that is well reputed and has good user feedback. The company should be willing to walk with you step by step in the process.
Many gold investment companies will simply take your order , switch the funds transfer and gold delivery. You will be in a dilemma if you are not sure about the best way to invest your gold or not sure how much IRA you want to put towards gold.
Your IRA is your future and you would want to pick a company that will protect your interests as good a way as they would protect their own. You would want to work with the best companies, not just the one that is the largest or the most widely made public. In my next article , I will expand more on this matter . Happy investing !!