Retirement is that time when you should be reaping the fruits of your labor instead of breaking a sweat over where your next income would come from. It should even be the period when you enjoy the thrills that being active in the labor market could not allow.
Unfortunately, not too many people have this narrative as retirees. Making the wrong retirement investment decisions and getting poor financial outcomes, as a result, is often the reason for this. There are a host of reasons why this is the case, including:
- Ignorance of or undermining tax implications
- Not Considering Age When Planning Investment Strategy
- Sole Reliance on Employer-Sponsored Retirement Plans
- Poor withdrawal strategy
- Underestimating Longevity
- Emotional Investing
- Failing to Rebalance
- Poor risk tolerance
- Inflation Risk
- Outrageous Investment fees and expenses
- Horrible Asset Allocation
- Poor Market Timing
- Little or no Investment Diversification
The list goes on and only proves that many things ought to be considered when planning and executing your retirement strategy. For more on this subject, you can visit: https://www.govexec.com/.
What to invest in is certainly one of the major areas of concern. This is because your choice has to address many (if not all) of these aforementioned issues. In light of this, making a Gold IRA an integral part of your retirement strategy is strongly advised. Read on, as some reasons for this expert recommendation will be discussed here.
Why Does Gold IRA Fit Perfectly into Your Retirement Plan?
The reliability and dependability of your retirement plan for the latter years are largely determined by your investment portfolio. As a result, due diligence is seriously required before considering investment options. To this end, making a Gold IRA a part and parcel of your portfolio is seriously recommended. Some of the several reasons for this include the following:
1. Protection Against Inflation and Currency Devaluation
Inflation and currency devaluation are very related concepts. This is considering how one is likely to happen if/when the other does happen. However, they are not the same. Inflation happens when the prices of commodities go up, thereby reducing a currency’s purchasing power (devaluation).
It is a reality that this country and many others are not new to. The state of things in sectors such as real estate, aviation, healthcare, and many others has been proven this time and again. As a result, the right retirement investment strategy would account for possible inflation and currency devaluation in the near or distant future (at the very least).
Fortunately, Gold IRA is one of the several options that come through in this regard. This is considering how gold in tangible and even intangible investment forms has proven repeatedly to be a viable hedge against inflation and currency deflation.
2. Regulatory Benefits
Overall, two kinds of benefits come with gold IRA investment. The first has to do with the firsthand benefits of investing in gold as a precious metal. One such has been extensively discussed above as it is a viable protection against inflation and currency devaluation. The second overall benefit, which this point is more about, is the benefits of using the IRA scheme.
By the way, IRA stands for Individual Retirement Account, which is a retirement saving and investment scheme regulated by the IRS (Internal Revenue Service). Its regulation by the IRS makes it very organized and less susceptible to manipulation in the disinterest of investors. So, there is the safety factor, among other benefits, in the mix. You can click here for more on the IRS’s regulation of the Gold IRA and other IRA schemes.
3. Protection Against Government Actions and Inactions
Investment in traditional financial assets comes with its benefits. This is why it has been a highly utilized option for a very long while. This includes traditional financial assets such as:
- Stocks
- Mutual Funds
- Bonds
- CDs: Certificate of Deposit
- ETFs: Exchange-Traded Funds
- REITs: Real Estate Investment Trusts
- Money Market Instruments
- Annuities
- Forex: Foreign Exchange
- TIPs: Treasury Inflation-Protected Securities
However, history has taught us that these and several others are not flawless investment options. Their flaws are largely because they are all significantly influenced by the government’s actions and inactions. This can be through:
- Fiscal Policies: Such as tax policies and government expenditure
- Monetary Policy: Such as interest rate alterations and quantitative easing
- Currency Manipulation
- Social Policies: Such as healthcare reforms and labor laws
- Trade Policies: Such as trade restrictions and new tariffs and trade agreements
- Regulations: This can be new capital requirements, for instance.
- Inflation Control Initiatives, such as subsidies and price control strategies
There are just as many government actions and inactions that influence the fate of investments in traditional financial assets. Considering a Gold IRA is a good idea in the spirit of avoiding the possible damaging effects as a result of these government actions and inactions. Overall, Gold IRA fares better or even very well in the face of political and economic uncertainties.
4. Liquidity
The fate of an investment is also tied to how well it can be liquidated if/when the need arises. The Gold IRA does very well in this regard, due to two things. The first is the global demand for gold as influenced by several factors, including the following:
- Investment Demand: Preferred and prioritized investment option for a very long time
- Huge significance across various cultures
- Reserve assets—even by central banks.
- Enormous industrial usage
- Demand and Supply Effects
- Geopolitical Factors
- Economic Factors
In light of all this, the liquidation of gold as an asset is not usually a problem. So, people can make investment withdrawals a lot easier than many other options offer. It is even better than many other precious metal alternatives in this regard.
The involvement of the IRS is another reason why liquidation is not a problem with this scheme. However, when it comes to making withdrawals for those who choose to invest in a gold IRA, some IRS rules must be followed to the letter. Adherence is especially so that penalties, which can be very costly, are avoided.
Conclusion
Protection against inflation & currency devaluation, regulatory benefits, protection against government actions & inactions, and liquidity are reasons why a Gold IRA is ideal as part of your retirement investment plan. However, there are more reasons besides these. So, it is one to be given serious thought in the spirit of having a very financially fulfilling retirement period.