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Right now, numerous issues are causing some turmoil within the economy, including persistent inflation and the high rates meant to temper it. And while today’s elevated rates, which are paused at a 23-year high, are having a positive impact on inflation, the latest inflation report shows that there’s still some work to do. At 3.2%, the inflation rate is higher than the Fed’s 2% target and is causing the devaluation of paper currency.
But while these and the other economic issues certainly aren’t ideal, there are ways to protect your wealth and the value of your investment portfolio. One of the best ways to do that is to invest in gold. Not only can gold help hedge against market volatility but it can also help safeguard your hard-earned money during economic downturns, which is a crucial part of any good retirement financial plan.
In turn, seniors may want to consider adding this precious metal to their investment portfolios to reap these and other unique benefits that come with gold investing. If you’re going to buy into this precious metal this spring, though, it’s important to understand which gold assets could make the most sense for seniors right now.
Learn how the right gold IRA could benefit you here.
4 gold investing options seniors should consider this spring
If you’re a senior who wants to start reaping the benefits of gold investing, here are a few different options that may be worth considering this spring:
A gold IRA for retirement needs
For seniors looking to incorporate gold into their retirement portfolio, a gold individual retirement account (IRA) can be an excellent choice. A gold IRA, often referred to as a precious metals IRA, is a self-directed individual retirement account that allows you to hold physical gold, silver, platinum and palladium within the account. This type of IRA offers the potential for tax-deferred or tax-free growth, depending on whether it’s a traditional or Roth IRA.
Setting up a gold IRA typically involves opening a self-directed IRA account with a custodian who specializes in precious metals. You can then fund the account by rolling over or transferring assets from an existing retirement account, such as a 401(k) or traditional IRA. Once funded, you can use the account to purchase eligible precious metals, like gold bars and coins, which are stored in an approved depository on your behalf.
One of the key advantages of a gold IRA is the potential for portfolio diversification and a hedge against economic downturns or inflation. Gold has historically been viewed as a safe-haven asset, and its value often rises during times of market turbulence or economic uncertainty. By including gold in your retirement portfolio, you may be able to mitigate the impact of stock market volatility and potentially enhance your overall returns.
That said, it’s important to note that while gold IRAs offer potential benefits, they also come with fees and extra costs. Storage fees, custodian fees and potential tax implications should be carefully considered before investing. Additionally, the value of gold can fluctuate over the short term, but historical trends indicate that gold has and likely will continue to grow in value over the long haul.
Explore your top gold IRA options online now.
Physical gold ownership for tangible security
For seniors seeking a tangible asset they can hold and store, physical gold ownership can provide a sense of control and security. Purchasing gold coins or bars from reputable dealers or mints allows you to have direct possession of the precious metal.
However, it’s crucial to factor in the costs associated with storage, insurance and potential difficulties in selling physical gold compared to other investment vehicles. This option may appeal to seniors who value having a physical asset in their possession, but it’s still essential to weigh the pros and cons carefully before taking this route.
Gold mining stocks for potential growth
While riskier than physical gold, investing in gold mining stocks can offer seniors the potential for growth if the companies perform well and gold prices rise. These stocks represent ownership in companies primarily engaged in the exploration, extraction and production of gold.
For seniors with higher risk tolerance and a longer investment horizon, gold stocks can provide exposure to the gold market with the possibility of capital appreciation. However, there is more risk to this type of gold investment, just as there is with any stock purchase, so it’s important to understand the potential downsides of gold stocks before investing.
Gold mutual funds and ETFs for diversification
Seniors seeking a more diversified approach may find gold mutual funds or gold exchange-traded funds (ETFs) appealing. These investment vehicles allow you to invest in a mix of gold-related assets, such as physical gold, mining stocks or futures contracts, simply by buying shares in gold mutual funds or ETFs.
Gold mutual funds and ETFs offer the benefits of professional management, diversification and generally higher liquidity compared to physical gold or individual mining stocks. This option can be particularly attractive for seniors looking to incorporate gold into their portfolio while minimizing concentration risk.
That said, it’s important to note that these funds often carry higher expense ratios compared to other types of mutual funds or ETFs, which can eat into returns over time. So, be sure to do your homework on this option before investing to ensure it makes sense for your goals now and in the future.
The bottom line
This spring, it can make sense to revitalize your investment portfolio with gold. By exploring the various gold investing options available, including physical ownership, mining stocks, mutual funds and ETFs and gold IRAs, you can potentially add a layer of protection and diversification to your retirement savings. Just remember to approach any gold investing option you consider with care and conduct thorough research to ensure your golden years truly shine.
Angelica Leicht is senior editor for Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
