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Gold IRA Accounts - Why You Must Protect Your Retirement Fund
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Gold IRA Accounts - Why You Must Protect Your Retirement Fund Gold IRA Accounts - Why You Must Protect Your Retirement Fund Presentation Transcript

  • GOLD IRAs 1. Why You Must Protect Your Retirement Fund? Another presentation in the FREE online series from GoldAssets24.com << FREE GOLD INVESTING KIT FOR ALL READERS >>
  • These days, Americans are very much on their own for retirement as very few companies offer pensions for their employees. While Social Security is still around, this program is looking shaky financially and doesn’t provide that much retirement income anyway. This is why it’s more important than ever for you to build, control and protect your own retirement fund. The problem is traditional investments like stocks and bonds have serious issues that make it very hard for Americans to save for the future.
  • A better way to plan for your retirement is to set up your retirement fund through a Gold IRA. What Is a Gold IRA? A gold IRA is a type of retirement account invested mainly in gold or gold-related investments. This investment uses the Individual Retirement Account, a retirement plan available to Americans outside of their work. This means that anyone can open a Gold IRA.
  • Investing in gold through an IRA makes sense for retirement because these accounts have a number of extra tax advantages. Tax Benefits of a Gold IRA The IRS set up the IRA with a number of great tax benefits. By using an IRA to invest in gold, you can earn a significantly better after-tax return than if you just invest in gold through a regular brokerage account.
  • The IRS ruled that it’s ok to own physical gold, gold ETFs (or Exchange-Traded Funds) and gold stocks in an IRA so you won’t have any trouble setting one up. There are two types of IRA: • the ‘Traditional IRA’ and • the ‘Roth IRA’ Depending on which account you use, you’ll receive a different tax benefit. For the ‘Traditional IRA’, you get a tax deduction for putting money into the plan.
  • That means that every time you buy gold for your Traditional IRA, you’re lowering your income tax bill at the same time. You don’t get a tax deduction for putting money into a Roth IRA. Instead, this account pushes off your tax deduction until retirement. When you take out money from a Roth gold IRA in retirement, your entire withdrawal is tax-free. That means you will never owe income tax on your gold earnings.
  • When you take money out of the Traditional IRA, you’ll owe income tax on your withdrawals. The Traditional IRA reduces taxes while you are working whereas the Roth IRA reduces taxes in retirement. Both IRAs also offer another tax benefit. As long as you keep your money in an IRA, you won’t owe taxes on your gains. This means if you sell off some gold to buy something else for your account, you won’t need to pay capital gains tax.
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  • If you made this same transaction in a regular brokerage account, you’d need to pay taxes on your gold gains, even if you move the money straight into another investment. Gold IRA Contribution Rules There are a few rules to keep in mind for investing in a gold IRA. First of all, there is a limit to how much you can add to your account per year. As of 2013, you can invest up to $5,500 a year if you are younger than 50 or up to $6,500 a year if you are 50 or older.
  • This limit applies to both your Traditional and Roth IRA contributions so if you invest $5,500 into a Traditional IRA, you won’t be allowed to add anything into your Roth IRA that year. In addition, a gold IRA also has income restrictions. You can’t invest in a Roth IRA if you are single and make over $127,000 or are married and make over $188,000 per year. The Traditional IRA only has an income restriction if you have a retirement plan at work, like a 401(k) or work pension.
  • If you have a retirement plan at work, you can’t add money to a gold IRA if you are single and make over $69,000 or are married and make over $115,000 per year. If you don’t have a retirement plan at work, you can invest in a Traditional Gold IRA regardless of how much you earn. Gold IRA Investing – A Safe Yet Profitable Investment Investors are in a tough spot if they put their retirement fund into traditional assets.
  • Just a few years ago, the stock market had one of its largest collapses in history. This devastated the retirement plans of most Americans and forced many to push off retirement. While the market is currently doing a bit better right now, future market fluctuations are a certainty. On the other hand, safer assets like bonds or CDs don’t look much better. The yields on these accounts are at near historic lows.
  • If you put your retirement fund into these types of investments, you’ll barely earn any money at all and won’t reach your financial goals. Gold gets around both these problems. Over the last 10 years, gold has averaged a return of about 14.5% per year, a great return compared to other assets. The demand for gold in the developing world has been extremely high so this upward price trend is likely to continue.
  • Gold also provides safety against a market crash. When the stock markets fall, gold prices often rise. Investors tend to flee to gold when other investments do badly. By putting some of your retirement fund in gold, you will be hedging against market downturns. Gold IRAs – Protect Your Savings from Inflation Another risk for your retirement fund is inflation. Inflation is when the purchasing power of the dollar goes down.
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  • This happens when there is too much money in the American economy which pushes up prices and causes the buying power of each dollar to fall. Inflation is bad for the stock market, and especially bad for American companies. Since companies earn dollars, there actual profits fall because inflation eats into their margins. Inflation is also a problem for fixed interest investments like bonds and CDs.
  • Since these assets pay a set percentage each year, inflation damages their annual return. For example, if a bond pays out 6 percent a year when inflation if 5 percent, an investor is actually only growing his money by 1% each year after inflation. If inflation is high enough, you could actually be losing money by putting it into a bond or CD. Gold is a fantastic hedge against inflation. Since there is a limited supply of gold in the World, its value isn’t hurt by inflation.
  • If inflation causes the dollar to be less valuable, it just pushes up the dollar price of an ounce of gold. As a result, gold is a good investment during times of high inflation. Will inflation be a problem going forward? Consider what’s going on in the US economy right now. The government is running up record debt levels while the Federal Reserve has been printing an almost endless supply of new money to support the economy.
  • These two actions are almost certainly going to hurt the value of the dollar and create higher inflation at some point going forward. The best way to protect against this upcoming problem is to move your retirement fund into gold. How to Invest Your IRA into Gold There are a few ways to invest your IRA into gold. You can buy physical gold, a gold ETF, or stock in a gold mining company.
  • Physical gold is an actual piece of gold like a coin or bar. A gold ETF is a type of investment fund that tracks the price of gold. These funds take money from investors and buy physical gold or gold related stocks so when the price of gold goes up, so does the value of a gold ETF. Stock in a gold mining company also follows the price of gold because when gold becomes more valuable, these companies earn a higher profit.
  • It is easier to buy a gold ETF or gold mining stock than it is to buy physical gold for your IRA. Most brokerage firms let you buy gold ETFs or gold mining stocks with a simple transaction. However, major brokerage firms don’t offer physical gold for their accounts. To invest your IRA in physical gold, you need to find a management firm that offers this service, known as your IRA trustee.
  • There are a number of different companies that do sell and manage physical gold for IRAs so this is definitely a possibility for your retirement savings. Investing Your Other Retirement Accounts into Gold If your retirement savings are in a work retirement plan, like a 401(k), it will be a bit trickier to invest your money in gold. When you use a work retirement plan, you can only put your money in investments that your employer has approved.
  • Some plans offer some gold related investments like gold mining stocks or ETFs while other plans don’t provide any options for gold. As long as you work for the company that offers the 401(k), you are limited to the investments in the 401(k) plan. Hopefully, there are some gold options. If there aren’t, ask your company’s benefits department if they could add gold investments to the plan. They may be willing to make this addition.
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  • Your best bet is to move your retirement savings into gold is when you eventually leave the company. At this point, you can make something called a 401(k) rollover. When you make a 401(k) rollover, you transfer your savings into another retirement plan. One option is to move your balance into an IRA. If you move into a Traditional IRA, you won’t owe any taxes for making this move.
  • If you want to move into a Roth IRA, you’ll need to pay income tax on your savings that year; you need to fund a Roth IRA with after-tax money. Since an IRA gives you the flexibility to invest in gold, this is your chance to make a gold 401(k) rollover. Disadvantages of Using a Gold IRA The main issue with using an IRA for your retirement savings is that these accounts limit when you can take money out. You are supposed to keep your money in your IRA until you are at least 59 1/2.
  • The IRS decided that this was the age when Americans could start making retirement withdrawals. It doesn’t matter whether you are working or not. Any withdrawal after 59 ½ is considered a retirement withdrawal whereas any withdrawal before 59 ½ is considered an early withdrawal. If you need to take an early withdrawal from your Gold IRA, you’ll owe income tax plus a 10 percent early withdrawal penalty on the money.
  • For the Traditional IRA, you’ll owe this tax and penalty on your entire withdrawal. For the Roth IRA, you’ll just owe the tax and penalty on your investment gains. Since you put after-tax money into the Roth IRA, you can take out your contributions tax-free. Gold IRA Early Withdrawal Penalty Exceptions There are a few times when you can take money out of your gold IRA early and avoid the 10 percent penalty.
  • You can make penalty-free withdrawals if you become disabled. You can also use your gold IRA funds to cover medical expenses that exceed 7.5% of your adjusted gross income for the year. If you or a family member goes to college, you can use the IRA funds to cover these expenses. Lastly, you can take up to $10,000 from your gold IRA to pay for your first home. These withdrawals avoid the penalty, but still are charged income tax.
  • While setting up a Gold IRA takes some planning, it’s definitely worth the effort. These accounts protect your retirement account, earn a decent rate of return, and offer a number of tax advantages. If you’re interested in gold investing or are already considering your various IRA options, then we would like to send you your free, no obligation gold investing kit courtesy of our partners at Regal Assets who have been helping gold investors for over 50 years.
  • This invaluable kit gives you all the information you need before investing in a gold IRA, physical gold or other precious metals.
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