As one nears retirement, it is only proper and wise to begin to think of retirement investments. This is important to ensure that you enjoy the best that is left of your golden years.
One of the low-risk investments you can take advantage of is gold IRA. With a gold IRA account, you can purchase and store precious metals such as gold, silver, palladium, and platinum. Investing in these assets offers you some advantages over traditional assets such as bonds and stocks. You can visit https://goldco.com/having-a-gold-ira-retirement-plan/ to find out more about these advantages.
In this article, we will take a closer look at gold IRAs, and determine if they are a worthy investment for retirement. Let’s get started…
How Gold IRA Works for seniors
Any age group can invest in these assets; hence, the process is the same for everyone. However, there is a slight difference that pertains to the amount you are allowed to contribute annually to your account.
If you are over 50 years, you can add over $1,000 annually to your account. This is something that folks under the age of 50 cannot do.
Once you turn 70 ½ years, you are allowed to continue adding to your contributions for the period you want. A report has shown that many people still intend to work part-time even after retirement. Hence, if you are thinking of doing such, investing in a precious metal individual retirement account is a great way to continue growing and safeguarding your money.
While you can begin to take distributions once you are 59 ½ years old without attracting any penalty, it is not compulsory. Therefore, you can do without taking distributions to allow the value of your assets to grow until you are 72 years before taking distributions.
Some smart seniors are patiently waiting until they are much older before they take withdrawals. This method allows their investments to experience massive growth first before they take from the funds. A report stated that the withdrawals made by folks over 70 years were not up to the required minimum. This shows that many seniors are being smarter in the way they manage their accounts.
Is Gold Individual Retirement Account the best for seniors?
For most senior citizens, their retirement plan is usually one that is risk-free to prevent the investment from being hurt. Hence, the primary thing in the mind of seniors when investing for their retirement is how safe the investment is; it is not a time to take risks.
When we examine the assets that are invested in a precious metal individual retirement account, we are confident that these assets are very low risk and are quite stable.
Apart from gold IRAs, there are two other investments that are low risk and perfect for seniors; let’s discuss them and precious metal IRA briefly:
1. Precious Metal
Although you can also invest in platinum and palladium, most folks prefer silver and gold and there is a good reason for this. These metals are very stable commodities. Gold is sold for $1,926.10 per Troy ounce while silver goes for $24.35 per Troy ounce.
While the price of silver might not look so big, its numerous industrial applications make it a worthwhile investment. Read this article to find out about the numerous industrial applications of silver.
2. Real Estate
If you don’t want to invest in a gold IRA for retirement, you can choose real estate. The increase in home prices in recent times has made this a lucrative venture for anyone with real estate properties.
Bonds have been known to have a low risk for a long time now while allowing your money to grow at a steady albeit slow rate. For retirement purposes, you should go for treasury notes rather than treasury bonds because the maturity rate for the latter is quite long.
In the long run, the choice is up to you and dependent on your retirement plans as well as financial projections. Therefore, you should make further research and consult your financial advisor who will advise you based on your peculiar situation.
Other Gold Investment Options for seniors
Investing in aurum is not only safe, but it is also low risk. Hence, it is a perfect asset for retirement savings. Nevertheless, it isn’t without disadvantages.
One of the downsides of investing in the golden metal is the fact that you will take cash from other investments that have a high potential yield. For instance, if you invest $2,000 in stocks, you may make a cash return that is higher than what you will get from spending on aurum bullion.
If you choose a gold individual retirement account, you will have to pay certain fees to maintain the account. Hence, if you are keen on investing in aurum but not an IRA, you have other options which we have discussed below:
1. Store the Commodity at Home
This is the first option that comes to mind for many folks. You don’t need to fill out any paperwork; just buy the bars of the precious metal and then keep them in a private safe at home. Alternatively, you can store them in a safety deposit box; but you will have to pay for the storage fees.
If you choose this option, ensure that your assets are insured in case of theft and other issues.
2. Gold ETFs and Mutual Funds
Gold ETFs and mutual funds don’t bother you with the fees associated with owning a precious metal individual retirement account.
The gain you make from these investments depends on the policy and ability of the company providing these offers. Hence, the risk of this investment is potentially higher.
3. Gold Futures
What this does is that it allows you to purchase gold later for an agreed price. To do this, you have to be a very good investor as it requires speculation regarding the future prices of precious metals. The risk involved is quite high and isn’t the best for retirement investments.
If you want to invest in a manner that provides safety and low risk, we recommend a gold IRA. Your savings for retirement are protected against market swings which cannot be said about traditional assets. Furthermore, you can grow your wealth at a steady albeit slow pace. Lastly, you get to diversify your investments and protect yourself against a drop in the rates of traditional assets.