Why Invest in a Gold IRA?

Many investors believe that gold is necessary part of a diversified investment portfolio. They may understand that investing in physical gold or silver can benefit them financially, in particular when the stock markets or global economies are failing. But they may not know how to invest in gold.

That’s not uncommon to see, since most investors invest for retirement through employer-sponsored retirement plans that only offer the ability to invest in various funds. Or they invest through mainstream brokerages that will offer everything under the sun, as long as it’s securitized. That means stocks, bonds, mutual funds, exchange-trade funds (ETFs), and asset-backed securities, but no actual physical assets like precious metals, commodities, or real estate.

Because of that, many investors don’t know how easy it can be to invest in gold, and particularly through a gold IRA. Because a gold IRA is a tax-advantaged investment account just like any other IRA, and is subject to the same rules, it allows investors with existing retirement assets to easily invest in gold. There are five primary reasons for investors to invest in gold through a gold IRA:

1. Tax Advantages

Like any other IRA, a gold IRA offers the ability to accrue gains tax-free. Whether your gold IRA is a traditional IRA or a Roth IRA, it is subject to the same rules and regulations as every other IRA. That means that if you’re rolling over assets from another retirement account into your gold IRA, you don’t have to worry about excessive amounts of new red tape. Your gold IRA will allow you to enjoy the same tax advantages as your existing retirement accounts, while allowing you the benefit of owning physical gold coins or bars.

2. Rollover Ease

A gold IRA can be funded with existing retirement assets. If you currently have a 401(k), 403(b), TSP, IRA, or similar retirement account, you can roll over those assets into a gold IRA without tax consequences.

In some cases that may be dependent on whether your existing retirement accounts offer the ability to roll over your funds, but the overwhelming majority of investors won’t have any problems doing that. With a 401(k) to IRA rollover, you can move funds from your existing retirement accounts into your gold IRA with no tax consequences.

The process is relatively simple, and in most cases is reasonably quick. It just requires selling assets in your existing accounts, rolling those funds over into your gold IRA, and using those funds to buy gold. DPR CONSTITUTION INVESTMENT COMPANY’s experienced representatives have helped thousands of investors through the rollover process, can answer all your questions about the rollover process, and assist you through every step of the process.

3. Financial Stability

The stability offered by gold is unmatched. That’s why it formed the basis of so many world currencies for so long. Because annual increases in the gold supply are minuscule when compared to the total supply of above-ground gold, there is no major inflation of the gold supply. Compare that to the fiat paper currencies that exist today, that have lost 95% or more of their purchasing power due to inflation, and you see why so many investors choose to invest in gold.

4. Wealth Appreciation

Gold’s ability to grow a portfolio’s value has been underappreciated for years. Since President Nixon closed the gold window in 1971, gold has actually outperformed both the S&P 500 and the Dow Jones Industrial Average, despite the amazing stock market bull run of 1982-2000. Gold’s performance in the 21st century has been even more amazing, with gold making more than double the gains of both the S&P and the Dow.

Looking at the economy today, you have to choose what assets you’re going to trust to protect your wealth over the rest of your investing career and into your retirement. Are you going to bet on stock markets, which have seen major crashes cost investors dearly since 2000, or are you going to place your trust in gold, which has more than proven its worth in recent years?

5. Diversification

Diversification strategies are numerous, and ultimately the decisions about allocation are up to individual investors and their risk appetite. But the general principles remain the same. Diversifying your assets with physical gold and silver can protect against inflation, currency risk, default risk, geographic risk, and financial crisis.

Gold has seen a 9.02% annualized average since the beginning of the century. It has not only made great gains over the past two decades, but it also continues to act as a great hedge against inflation and financial crises. When financial conditions show signs of deterioration, as they do now, investors flock to gold to protect their assets.

With a gold IRA investors can even transfer existing retirement assets from 401(k), IRA, TSP, or similar accounts, allowing them to lock in gains from their stock and bond holdings and protect those gains when markets begin to decline.

1. Decide What Type of Gold IRA You Want

The exact type of gold IRA you set up will be dependent on how you decide to fund your IRA. This is where you have to choose between setting up a conventional gold IRA that uses pre-tax dollars, or a Roth gold IRA that uses post-tax dollars.

With most types of rollovers into a gold IRA, you’ll be rolling over funds from an account already funded with pre-tax dollars into a conventional gold IRA. But if you’re rolling over funds from a Roth account you’ll need to set up a Roth gold IRA. And with recent changes to retirement account regulations, you may even consider doing a Roth conversion, rolling over funds from a 401(k) or traditional IRA into a Roth gold IRA.

2. Choose Your Funding Source

Whether you only have a 401(k), multiple tax-advantaged retirement accounts, or you choose to fund a Roth gold IRA with after-tax dollars, you’ll need to choose a funding source for your gold IRA. That could be a 401(k), 403(b), 457(b), or TSP plan. It could even be a traditional IRA, Roth IRA, SEP IRA, or SIMPLE IRA. Just about any retirement plan you have has assets that can be rolled over into a gold IRA.

Regardless of how you fund your gold IRA or what type of gold IRA you want to set up, you’ll want to consult with your tax advisor to determine what tax liabilities you might incur. You also need to ensure that your retirement accounts allow rollovers. That’s something that DPR CONSTITUTION INVESTMENT COMPANY’s representatives can help you determine.

3. Select a Custodian

While gold IRAs are self-directed IRAs, that doesn’t mean that you can store your gold coins or bars yourself. Just like with any other IRA, your gold IRA assets need to be stored with a custodian. DPR CONSTITUTION INVESTMENT COMPANY will work with you to select a custodian to store your gold investments. The custodians with whom we work have years of experience helping investors just like you protect and safeguard their precious metals investments.

4. Fund Your Gold IRA

Once you’ve selected a custodian and set up your gold IRA, you have to fund that IRA. In the case of a rollover, you’ll sell assets from your current retirement accounts and roll them over into your gold IRA. You’ll have to make sure that everything you do during this rollover process conforms to IRS regulations so that you don’t accidentally expose yourself to any tax liabilities. But DPR CONSTITUTION INVESTMENT COMPANY’s specialists will work with you to make sure that your funds are properly distributed to your new gold IRA. And once your funds are deposited and available, you can get to work investing in gold.

5. Buy Your Gold (or Silver, Platinum, Palladium, etc.)

Once your gold IRA is funded, you can choose which gold coins or bars you want to invest in. It’s important to remember that not all gold is eligible for investment through a gold IRA. An IRA cannot invest in collectible coins, gold jewelry, and any gold bars that don’t meet IRS regulations for minimum fines .

DPR CONSTITUTION INVESTMENT COMPANY’s representatives can work with you to select which gold coins or bars would best suit your needs. DPR CONSTITUTION INVESTMENT COMPANY has established relationships with mints around the world and access to numerous IRA-eligible gold coins and bars, including many that are minted for DPR CONSTITUTION INVESTMENT COMPANY. If it’s IRA-eligible and minted from gold, DPR CONSTITUTION INVESTMENT COMPANY can get it for you.

A gold IRA can even be set up as a precious metals IRA, so that you can invest in silver, palladium, or platinum. If your custodian is set up to store those other precious metals, you can invest in IRA-eligible silver coins or bars, as well as palladium and platinum coins and bars, adding a further level of diversification to your investment portfolio.