This year, gold hit a new record: as of this writing, the yellow metal is worth over $2,000. While some gold pundits have seen this coming for years, it should be something of a surprise for some investors who did not see the turbulent financial year of 2020 coming. That is why this year has highlighted the value of a Self-Directed Gold IRA. Using a Self-Directed IRA, investors can put retirement money into alternative, nontraditional retirement assets like gold. This not only makes for more diversification within a portfolio (since gold is a real asset and tends to hedge against inflation), but in some cases, may even make for more profits.
Why is Gold Still Relevant in 2020?
These days, investors are sometimes thrown off by the idea that a nontraditional asset like gold might still be relevant within a retirement portfolio. The truth is, if you have a Self-Directed IRA, then only you can decide what is going to be relevant for you. However, investors often flock to gold because they want real assets to go along with so-called “paper” assets like stocks. In the case of stock market turbulence, retirement investors who have some portion of money in real assets like real estate and precious metals might feel more confident.
However, this is no guarantee of results. The benefit of having an asset like gold in a Self-Directed IRA is the freedom that comes with it. When investors go outside the stock market, they can sometimes access assets they understand better. They can use their experience with nontraditional retirement investing to identify the investments that they think will work for them. They are not beholden to a plan’s individual choices of stocks, but instead can use the whole gamut of available retirement investments.
What You Need to Know About Gold and Retirement Investing
For starters, gold is not the only precious metal that is having a great year. Silver has seen tremendous gains, which means that investors with significant silver holdings in their portfolio are also enjoying the benefits of precious metals as 2020 rolls on. But what do you need to know about gold and precious metal investing in a retirement account? There are some rules and restrictions you will need to be aware of.
For example, not all gold investments are valid retirement investments. At our Gold IRA website, we list what’s available:
- Gold bars hallmarked by a NYMEX or COMEX-approved refiner or assayer. The purity has to be 24 karat, or 0.995+ fineness.
- Gold coins with a purity of 24 karat. There is one exception: the 22 karat U.S. Golden Eagle. one exception: the 22 karat U.S. Gold Eagle.
- Silver coins and bars. These have to have a .999+ fineness, such as the 1-ounce U.S. Silver Eagle.
- Platinum and palladium bars and coins hallmarked by NYMEX or COMEX-approved refiner/assayers. These must have a high degree of purity, with 0.9995+ fineness.
These are considered acceptable retirement investments. But make sure that you also know what will be expected of you, as you will not be able to keep these retirement investments at home in a personal safe. In this case, it is similar to not using real estate as a personal asset in a retirement investment. The IRS wants to make sure that investors hold their retirement assets separately from their personal assets. In this way, you do not use the retirement assets for personal benefit, but for your long-term financial security in retirement. Anyone looking for a “quick tax benefit” need to review these regulations.