Investing In Gold To Protect Against Inflation

The Benefits of Gold IRA Investing

Many investors eager to protect their wealth and safeguard their investment portfolio turn to gold IRA investing. Unlike traditional investment instruments, including annuities, savings accounts, stocks, bonds and shares, the precious metal gold continues to be a unique investment for enhancing a person’s wealth. In fact, investing in physical gold to diversify a pension fund or individual retirement account (IRA) can significantly increase a person’s worth during their retirement years.

Gold IRA Accounts

A gold IRA account is a beneficial savings account that brings with it enormous tax breaks. In fact, the IRS allows these accounts for individuals that want to stock away cash for their retirement years. A gold IRA account is a self-directed way to save for the future. In fact, any traditional IRA can be transferred to a gold-backed individual retirement account. It is the only acceptable individual retirement account they can use gold as an investment for retirement.

The Physical Asset

A gold IRA account allows investing of the physical asset of gold that can be deposited directly into the account. In addition, other gold-backed trading instruments including stocks, ETF’s (exchange traded funds) and mutual funds can also go into the account. However, these are tied to currency, and usually have no intrinsic value like the precious metal.

A Great Diversifier

Many investors understand how well gold as a precious metal works as an effective diversifier of an investment portfolio. This is because demand of the precious metal and economic forces always determine the current spot price of gold. Often times, these forces are in direct opposition with other financial assets including stocks, bonds, real estate and treasury bills. This means that when other trading instruments struggle, the price of gold continues to rise. This is been historically true over the last seven decades. Many investors use this knowledge is an effective tool for diversifying the risks involved in maintaining a successful portfolio.

Liquidity and Portability

Unlike nearly any other type of financial asset, gold continues to be highly liquid and portable. It can be easily converted into cash, at locations all around the world. Because of its lightweight per troy ounce, it is portable and easy to transport to any location on earth. As an investment strategy for retirement years, it works well because it continues to increase in value as a long-term strategy, and will be easily converted into cash when required.

Tax-Free Growth

The federal government allows investors to increase their wealth through gold IRA investing using tax-free growth. Any money used to purchase the physical asset of gold today, is tax-free, until the time that it is converted into cash during the retirement years. Investors are not required to report to the government any income generated by the gold until it is withdrawn from the account after retiring.

Gold investing is considered to be one of the most lucrative ways at diversifying a portfolio and increasing a person’s wealth for retirement. Many individuals convert their existing individual retirement account into a gold IRA to take advantage of its many benefits.