10 Reasons Why Gold IRA is Common in USA

gold ira investment in the united states

Do you know where billionaires of United States are investing their money? Gold IRA! It is now a common mode of investment nowadays in the States. It is fascinating to see people are buying precious metals such as Gold, Silver, Platinum, and in some cases Palladium with their retirement funds. But how this shift occurred in just a few years?

In this post, I am going to uncover some of the secrets of precious metals IRA; especially gold. I would highlight some of the major drawbacks of traditional means of retirement planning and how do glittering gold replace paper bonds and mutual funds from the Individual Retirement Accounts of the citizens of the USA.

What is a Gold IRA?

A Gold IRA is a type of self-directed IRA in which gold is held as a physical investment. Unlike paper currency, precious metals can’t be kept at home. According to IRS rules, a custodian has the authority to keep the gold and other IRA-approved metals in the custody on behalf of the account holder.

Well, obviously it sounds awkward that your entire investment is kept in someone else’s vault. Buy yes it is actually the law which you will have to follow. Escaping or tampering with rules and regulations is followed by heavy penalties. On the contrary, more and more people are shifting towards precious metals investing. Here are ten reasons why you should invest in gold IRA in the United States.

10 Reasons to Hold Gold in IRA

1. Inflation Companion

There are times when the price of commodities rises very high due to cost of living. As a result of inflation, the purchasing power of currency falls. So in order to buy daily stuff, one has to pay more money for the same quantity.  This extra money comes from the retirement funds. According to the sources, people withdraw money from their IRA in order to overcome the effects of inflation.

An early withdrawal from the retirement accounts causes heavy penalties by IRS. Ultimately, people lose their money during inflation. Gold, on the other hand, remains neutral. It does not lose its authority in high times. Therefore, more metals you have more power you possess in inflation.

2. Portfolio Diversification

Let us suppose, you invested all your retirement money in the stock market. As you may know, a stock market works on the vote of confidence of investors. If the investors show a lack of confidence, stock market crashes. The history of United States is filled with numerous market crashes.  The famous stock market crashes like the Wall Street Crash of 1929, the stock market crash of 1973–4, the Black Monday of 1987, the Dot-com bubble of 2000, and the Stock Market Crash of 2008 are some of the examples.

Gold IRA provides diversity to the investment portfolio. In worst case scenario you may lose all your money in mutual funds and the stock market. But physical bullion will never show its back in risky times. 

3.  Weakening of Dollar

Although American Dollar is one the most powerful currencies in the world but takes a look at the index of the dollar over the past few years. US dollar has lost 45% of its face value since 1993. The small rise in the value was seen during President Barak Obama tenure thanks to better investment policies. Now the offices have changed, Trump may get Dollar week according to Bloomberg. So, one has to look for another mode of investment for IRA. 

4. Deflation

Deflation is just opposite to inflation. Deflation is a period when the price of commodities decreases drastically. The economy is burdened by the debts and people go out of business. One such global phenomenon is witnessed as the Great Depression of 1930. The unemployment rate goes higher along with poverty and starvation. During such periods, the purchasing power of gold rises substantially as compared to other perishable commodities.

5. Symbol of Luxury

Apart from other benefits of gold IRA, big billionaires are including gold in their investment portfolio because It has become a status symbol now. People need something to flaunt upon in parties and private meetings. They are so much attracted to precious metals that you can find gold-plated watches, dining accessories and even lighters in their pockets. The shiny metals are indeed the modern symbol of luxury.

6. Easy Cash

Gold is recognized worldwide. You can easily sell gold coins or bars in any country you want. Unlike currency which needs to be converted according to devaluation rules, gold is easy cash which you carry around the world. Here is a fun fact India and China are the leading gold buyer in the world.  There are tons of gold dealers around the world who are ready to pay hard cash in exchange for gold.
Muthoot Finance has made their fortune by buying gold and providing cash to the customer.  
M G George Muthoot has invested 3 billion in gold IRA and is one of the top ten billionaires in the United States.

7. Physical Investment

What I mean by physical investment is that investing in gold is a type of physical investment. In the stock market, people buy shares on digital platforms. They are investing their hard cash in the virtual world. On the other hand, buying gold with IRA funds provides you physical access to the bullion. You can feel and touch your investment.  

8. History of Gold

From generations, Americans have traded in precious metals. Gold has some sentimental values too. It has associated with grandmother’s wedding ring passed onto sons and to their wives. Native citizens traded in gold. During the civil war, gold coins were used as a strategic weapon to buy allies. Various voyages started in search of gold. Even Columbus discovered America in search of treasure. So this vast and glorious history associated with gold compels citizens of USA to include gold in IRA. 

9. Loss of Confidence in Government

This may sound unusual but this year’s election had a great impact on people. After the Donald Trump’s win, Canada immigration website crashed. But what this has to do with my investment? Well, if people show loss of confidence in government, it implies they have no faith in the economy of that State. Indirectly the economy of a state depends upon currency. After the Presidential election of 2017, there has been a massive increase in purchasing gold bullion.

10. Higher Returns

The price of gold is still on the rise and is expected to continue till 2030. This makes precious metals investing more profitable as compared to any other mode of investment for retirement.
“The price of gold nearly tripled between 1998 and 2008, reaching the $1,000-an-ounce milestone in early 2008 and nearly doubling between 2008 and 2012, hitting around the $1800-$1900 mark.”-Investopedia

The Conclusion

Gold IRA has been established as a modern way of retirement planning. The benefits are far better than traditional means. There were times when people used to hesitate in buying precious metals with money due to the risks involved but nowadays the IRS policies are well defined and transparent to adopt. Many gold IRA companies have established themselves in the market thanks to the increase in purchasing power of people.

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