Is Gold A Good Investment For Retirement?

Updated: October 24, 2021
by CyberCash Worldwide

As we all know, there is always a certain level of risk associated with any investment. The stock market, cryptocurrency market, forex, commodities... None of them is ever predictable. The value of any fortune fluctuates from day to day, going from high to low. In order to protect yourself against such a blight, you'll need the best option for a long-term investment plan. 

If you have some spare cash in your savings account and are considering investing some of it, it’s essential that you choose several different plans to diversify your portfolio and protect yourself against market volatility. Precious metals such as gold, silver, and platinum can be used as a means of diversifying risk, particularly via derivatives and futures contracts. 

Is Gold A Good Investment For Retirement?

A Little More About Gold Investments

You should be familiar with a few important details about gold investments before you get started. Here are some details.

Inflation and Gold

For decades, or maybe centuries, every time the economy becomes rocky, people consider investing in gold. Gold is considered as a good hedge against other portfolios. So when the stock market becomes volatile, economists and investors become afraid of inflation and look for gold as an investment option. This also works the other way round; when the stock market is performing well, the gold price tends to fall (although not always). That’s when you should look to see if it’s the right time to buy gold or not.

Hedge Against USD

US dollar and gold tend to move in opposite directions. When the dollar is weak, gold tends to become strong. It means that you can consider gold as a hedge against the US currency when you build your investment portfolio.

Gold Stocks or Physical Gold?

Another thing that you should make clear to yourself is that you can either buy physical gold or buy “gold stocks”. What it means by buying gold stocks is that you are investing in a company that produces (mines) gold. In this case, when the stock market is up, your investment value goes up, so it may not serve as a hedge against other portfolios the way physical gold does.

No Interim Returns

One disadvantage of investing in gold is that you’re not receiving any returns while holding it. While stocks pay dividends and saving bonds pay interest, for example, some investments don’t pay until they’re released. Endowment policies don't pay until the maturity date unless you cancel, and gold investments don't pay until they are sold. 

Check The Tax Rate When You Sell

One thing you need to keep in mind is that when you sell gold, you may be taxed on the profit (the selling price less your original purchase price, less qualified associated expenditure.) It’s called Capital Gains Tax, but it’s not straightforward, or hard to explain because the tax rates and rules vary from country to country. An advantage of investing in gold, however, is the favorable tax treatment. In the USA, if you invest in gold for the long term (more than 1 year), you’ll be taxed at a lower rate. In the UK, if you invest in gold coins, you may not be taxed because coins will be treated as legal tender. 

You won’t be taxed if the amount of profit is low because the exemption rule applies. For example in the USA, the first $40k or so is exempt, while in the UK, the exempt threshold is much lower. 

Don’t Forget The Costs When you Sell

As the value of gold increases, you'll feel ready to sell it, but you must remember the various costs associated with your investment. Your profit will not just be selling price less purchase price. The storage cost and the "premium" are two of the expenses you would have incurred.

If you have experience buying company shares, then you should be familiar with a little extra that you have to pay. A premium will be added to the price of gold when you make a purchase. Think of a premium as a service charge. The good news is, these costs should be deductible from your capital gains tax (NB: depending on your country).

Should You Buy Gold Bars or Gold Coins?

Buy Gold Bars or Gold Coins

Bars or coins, both have advantages over the other in different ways. Gold coins are minted every year, therefore, have historical values. After all, investments are not always made for financial purposes. However, it means that because of the historic value, it's harder to determine the gold coin's actual value against the current gold price.

On the other hand, the value of a gold bar can be fairly easily quantified from weight and purity. Gold bar prices can be more accurately predicted since they reflect current market prices. So if you’re not bothered about the reason behind each gold coin production, etc, then gold bars are a straightforward option to invest in for financial security purposes. 

Whichever way, you can consult your broker company and They will give you all the information you need to make the best purchasing decision. 

Where Can Your Gold Be Stored?

Of course, some people store their precious metals at their residence, assuming their home security is much more advanced. 

But a safe storage area is necessary for gold, which is an expensive commodity. You cannot store the precious metals at your house regardless of how advanced your home security is. 

IRA gold can be purchased by brokers, and the account needs to be created and administered by custodians who will store your bullion. Custodians can be banks, credit unions, or special brokerage companies approved by authoritative financial bodies. Needless to say, the storage facilities are equipped with a hi-tech security system, plus a 24/7 monitoring of the facility. 

Gold Investment For Retirement

Gold IRAs are available as new Individual retirement accounts (or as rollovers of existing other IRAs). The company you choose for your Gold IRA has a great deal of influence on your financial success. You can accomplish your retirement goals with gold companies with high qualifications. So let me share with you some of the questions people ask when searching for the best gold IRA company.

What is a Gold IRA?

Gold IRA

An IRA (Individual Retirement Account) is an account for individuals to save for retirement, so it’s designed as tax-efficient. 

Individual retirement accounts allow retirees to save for their future on a tax-free basis. Financial institutions must be your partners in opening an account. 

Gold is not allowed to be purchased with this kind of savings plan. An IRA must be self-directed in order for you to purchase precious metals. 

There are different forms of IRAs such as traditional IRAs, Roth IRAs, and so on. Gold IRAs allow you to invest in physical gold, but they also offer other precious metal options like platinum and silver, and/or other precious metals. 

Of course, you are not managing the account on your own. There are brokers who facilitate the process of opening a gold IRA account for you and purchasing precious metals on your behalf. Their physical storage of precious metals is also taken care of, so you won't be concerned about it. Finally, whenever you wish to sell your gold, they will handle it on your behalf.

Also Read: 7 Ways To Make Money For Retirement

Who Holds Gold in an IRA?

A gold IRA account is similar to a regular individual retirement account but instead of dealing on paper, it supplies with physical bullions or coins approved by IRS are held. Likewise, the precious metals are held in a safe deposit box for the benefits of the IRA account owner. 

Why Invest in a Gold-Based IRA?

There are several advantages of investing in a gold-based IRA. First of all, the price of gold isn't affected by market ups and downs so much right now. Gold carries a different value than paper assets. It has been used as a currency for ages, and today, gold is a popular form of exchange. 

Since it increases in value when other currencies lose value, it is an excellent inflation hedge. Furthermore, its value remains even during times of geopolitical uncertainty. It’s also easy to convert into liquid money and can be used to trade anywhere in the world.

How Do You Choose the Right Gold IRA Company? 

Each gold IRA company offers unique services and there are always advantages as well as disadvantages. What you really want also depends on your future goals, your retirement plan, and how much you can afford right now. All because after all, it comes down to your personal needs and whether or not the company meets those needs.

Before you settle for a certain company, the least you can do is to do research and find out about their terms, conditions and charges. But you should always speak to the helpline and send emails to the support to see how helpful the customer service agents are. Needless to say, make sure that the company you opt for is approved by a relevant authority, such as IRS in the States.

Here are some of the reputable gold IRA companies in the USA.

*** The prices indicated are at the time of writing and there may be changes.

  • Gold Alliance (https://goldalliance.com/ira-the-basics) - There is no minimum investment, and it offers precious metal storage for free. But charges $175 per year to maintain your account. Offers buy-back guarantee.
  • Lear Capital (https://www.learcapital.com/gold-ira/open-rollover-account) - The minimum investment is $7,500. Annual fee of $180 including shipping and insurance. No transfer fees from another account to an IRA. Over 20 years in business, therefore customer service is said to be reliable.
  • Orion Metal Exchange (https://orionmetalexchange.com/ira) - The minimum investment for IRA is $5,000, but no setup fee or transfer fee. Look for a free storage promotion when you consider opening an IRA account.
  • American Hartford Gold (https://www.americanhartfordgold.com/ira-retirement-accounts) - No minimum IRA investment, no setup fee or shipping fee. Buy-back guarantee, and it’s also renowned for providing good customer service.
  • Oxford Gold Group (https://www.oxfordgoldgroup.com/gold-silver-ira) - Minimum IRA investment is $7,500. The annual maintenance fee starts from $175. No shipping fee. With over 20 years of experience, helpful advice as specialized in IRA investments.
  • Patriot Gold Group Gold IRA (https://www.patriotgoldgroup.com/precious-metal-ira) - Also over 20 years of experience, the minimum IRA investment is $15,000, plus a $225 setup fee.

Can You Make Money As A Gold Investment Affiliate?

Of course you can. While you’re researching to decide which investment company you should go for, you can also find out if the company also offers an affiliate program. Every time someone invests in gold through your referral, you receive a percentage as a commission. This is a great way for you to cover the additional costs, such as premiums or annual maintenance fees.

It's even better news that the brokers not only deal with gold, but also with other precious metals. Some of them may offer investment-related products as well. You may also receive affiliate commissions when your referrals buy another product from the company.

Also Read: Does Affiliate Marketing Work? 40 Tips To Grab Every Opportunity

Is Gold A Good Investment For Retirement? [Conclusion]

It can be challenging to find a good investment broker that genuinely helps you plan your retirement. Doing research ahead of time makes the process easier. A gold IRA company that provides high-quality services and a wide selection of investment options is top-of-the-line. By doing so, you will be able to maximize your investment and reap all of the retirement benefits as planned.

Kiki Broadway

Author Bio:  Kiki Broadway


Kiki is an ex-banker, realtor, financial advisor, turned singer/performer in her 30s. Now semi-retired, successful affiliate marketer in her own right. Her level-headed days are behind her, and now she enjoys spending time with her family and hobbies.

About the author 

CyberCash Worldwide

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  1. Precious metals like gold and silver are considered as an investment only for super wealthy people in our country. It’s not for everyone especially in this day & age people are suffering from unemployment and there are millions of people with no savings or even people are in debt. People who recommend gold investments are willing to make rich people play with money. It’s not for people who truly need day to day cash.

  2. Thanks for the valuable information. Your points are spot on. If you want to look for a good investment option especially looking for gold, contact … These people give you the best rate I’ve ever seen.

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