(Newswire.net — February 27, 2020) — It’s quite incredible how gold and silver have been so valuable throughout the ages, and even in this day and age they still are. Back in the 16th century, they were sought after by the Spanish conquistadors who explored the new world. In the 19th century, pioneers went to California to mine for them. Today, investors can get these physical precious metals either to keep at home, or add to their IRA portfolio. Now maybe you’ve heard that gold or silver IRAs are complicated and have a lot of rules. It’s true they do, but there are precious metals companies that have easy to understand information on how to get a precious metals IRA, and there’s four reasons you should consider it.
Cash Is Subject To Inflation
While it’s always a good idea to keep some reserves of physical cash as well as money in a savings account, both leave you vulnerable to inflation. If national debt is high, economic activity low, and the Fed’s interest rates flat, inflation can hit hard. It’s almost inevitable that at some point, the price of goods and cost of living will always go up. If you’re just keeping your money where it’s earning nothing, you’ll have no way to overcome inflation. While savings accounts, money market accounts and CDs can earn more interest, it’s still not enough to get you to retirement while being protected by inflation. So consider moving to something else.
The Markets May Not Perform The Way They’re Expected To
You may be like most investors and decide you’ll put your retirement savings in traditional assets like stocks and bonds. That is something you should do, but these assets still shouldn’t be your only investments. The reason is because the stock market can be subjected to bubbles and unforeseen events just like in 1929, 2000 and 2008. When the economy takes a hit and businesses aren’t making sales, investor portfolios suffer.
Likewise, the bond market relies on the Fed’s interest rates going up so that bonds can be bought at low prices and then sold at high prices when the interest rates go back down. If the economy isn’t picking up, the Fed’s rates could go too low, stay low and even go negative which means the bond market becomes defective. Real estate can also be subjected to these same problems.
Precious Metals IRAs Provide Tax Exemption
Like all other IRAs, a physical silver IRA or gold IRA is precious metals you own that can grow in value over time, and their increase in value cannot be taxed. Now if you have your IRA opened as a traditional IRA, you could be taxed when you withdraw them at the legal age and count them as a distribution. With a Roth IRA, they’ve already been purchased with after tax money so they don’t have any taxation when you take a distribution. If you sell precious metals in your IRA, you may have to pay a capital gains tax, but other than that they are tax exempt.
Precious Metals In An IRA Eliminate The Need To Invest In Security
A physical precious metals IRA is always better than one where you invest in gold or silver ETFs because those do not give you a claim to any bullion. With a physical precious metals IRA, those are your coins or bars that you can do with as you need. Now it is important to know that they must be kept in a depository, or what would be called a highly secure vault. This is part of the IRS’s regulations, and while it can be costly, consider how costly it would be to provide maximum security for gold or silver kept at home. Precious metals kept at home could make you a big target for theft, and keeping them in a bank deposit box may not be the answer. When you purchase and have precious metals transferred to a depository, you can do so without anyone knowing and know that they are being monitored by armed guards. Once you’re ready to withdraw, they’ll be delivered to you.
In conclusion, your assets should be diversified so that you can withstand inflation, recessions, and other calamities while also keeping them secured. A precious metals IRA can help do that, and so long as it’s setup correctly, you’ll be able to have your retirement funds ready when you need them.