Can I Really Hold Physical Gold in My IRA?Trevor Gerszt
The short answer is yes, you can. You can hold actual gold (and silver) coins in your IRA. It’s an account called a Gold IRA, and not only is it completely legal, it’s a great idea that’s been mostly under wraps for a long time.
If I roll over my 401(k), IRA or TSP to a Gold IRA can I only hold gold in my account?
No, your Gold IRA can hold not only gold and silver; it can hold a variety of “paper” assets, including stocks, bonds, mutual funds and cash. In that way, a Gold IRA actually offers you more options than bank or brokerage accounts, which traditionally only offer dollar- and market-tied investment products.
How does holding physical gold in my IRA benefit me?
As you well know, the stock market is often subject to instability and volatility. Just last August, when China devalued its currency, the yuan, three times in three days, our stock market crashed; an event that is still creating negative impacts in our economy even today.
The price of physical gold historically has had an inverse relationship with both the stock market and the U.S. dollar. That means traditionally when the market or the dollar go down, gold goes up. This provides you with crucial protection of the buying power of your retirement savings.
But doesn’t the market always come back?
Many experts insist “all markets are cyclical” and “what goes down must come up.” While in the new globally-interconnected economy it can certainly be argued that the rules we’ve always blindly accepted as true may also be changing, there’s another, greater danger when it comes to your retirement account.
Think back to 2008. If you’re like many IRA, 401(k) and TSP owners, you saw your account balances plummeting by twenty to as much as fifty percent or more as you watched helplessly. Piling on, many who lost their jobs or homes were forced to borrow from devastated retirement accounts just to cover everyday expenses. It was an economic disaster for millions of Americans, and while some think their retirement accounts have “recovered,” all they’ve really done is gotten back to their 2008 balances. What they either don’t realize, or can’t face, is that they’ve missed out on thousands they should have made in gains and interest over the past 8-plus years.
Now imagine the same cycle happens again. U.S. manufacturing is already in recession, and the oil industry is in free-fall. Oil companies that borrowed billions during boom times are already starting to default. Billions in loan defaults is how the last crisis started – and it’s almost ten years later. You’re almost a decade closer to retirement. Clinging to the belief that “the market is always cyclical” may be fine for well-paid experts on TV who have more than enough money already for their lush retirements. But can you really afford to pin your hopes on the market anymore?
Can gold protect me from inflationary damage to my dollars?
This is another historically demonstrated power gold has – physical gold resists inflation. We can all remember when we were kids we could buy a good, substantial candy bar for a nickel. But now that same delicious candy bar, or a somewhat smaller version, will set you back a dollar or more. It’s not that candy costs more; it’s that your dollars buy less and less every day – a serious problem for retirement savers who are trying to protect their future buying power.
Physical gold resists inflation’s erosion, which takes away a lot of the worry we all experience in saving for retirement.
Another way inflation can diminish the buying power of your dollars is when the government, working with the Federal Reserve, injects millions of new dollars into the monetary system through “stimulus,” or quantitative easing. But no government can print or synthesize new gold. When you own physical gold coins, their value is inherent and can’t be diminished by the actions of governments or central banks. If and when you decide to sell your gold for dollars, if the dollar has gone down, you’ll simply get a higher price (more dollars) for that gold.
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If you want more information on whether a Gold IRA or Gold IRA rollover is the right choice for you, give us a call today and we’ll help you explore your options. Our toll-free number is (855) 465-3472 or (855) GOLD-IRA.