IRA, The Most Demanded Gold Bullion Savings Plan In The US

An IRA (Individual Retirement Account) is a personalized “savings plan”, in which any citizen can place certain investments approved by the Government, which it supports and encourages because they grant tax benefits on the assets that are allowed in each savings plan.

Gold IRA or Precious Metals IRA is an individual retirement account in which physical gold or other precious metals, approved by state law, are held in custody for the benefit of the owner of that account. 

The content of each Retirement Account is valued in bullion or bullion, investment coins in gold, silver, platinum, or palladium.

The Taxpayer Relief Act of 1997 expanded the allowable types of investments allowed in IRAs, stating: ” Your IRA may invest in one-, half-, quarter-, or tenth-ounce United States gold coins, or one-ounce silver issued by the Department of the Treasury and minted by the US Mint. 

Starting in 1998, your IRA can invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion .”

As each person’s circumstances are different when it comes to saving and thinking about their future retirement, anyone who wants to trust an IRA account should seek professional and qualified advice before embarking on any investment of this type.

In the past, many Americans have tried to include various assets in their IRA plan over years, such as property, rental real estate, or rural or building land, prime examples of things that are sometimes allowed and sometimes not.

For example, if you decide to include your house, and your property, in an IRA, you will find that the Law prevents you from that moment from living in that house or letting another person in your family live there. 

self-directed IRA"

A “self-directed IRA” account is a savings plan that will only allow you to put certain “alternative” investments, such as real estate or intellectual property. A simple “IRA” savings plan will allow you to put up stocks or mutual funds.

Play Video

A “Gold IRA” or “Precious Metals IRA” savings plan will allow the introduction of physical (ie real) gold, or other precious metals approved by the 1997 Act: silver, platinum, or palladium. This type of IRA does not allow ETFs or gold mining stocks.

Like the others, the Gold IRA savings plan is maintained by other people, and third parties, so you are not allowed to use the metal before retirement.

Investing gold, silver, platinum, or palladium in your IRA portfolio is a necessary means of protecting the value of your assets.

A rollover from a gold IRA is a popular way to diversify your investment portfolio by exposing yourself to precious metals and away from paper investments such as stocks and bonds.

But why gold, silver, platinum, or palladium? Because precious metals are a long-term form of inflation hedge.

In addition to existing in the United States for years, pension or retirement plans based on precious metals exist in India, or Europe in countries such as Germany, Austria, Switzerland, and the United Kingdom.

What Is The Gold Standard And How Does It Work?

The gold standard is a monetary system backed by gold. That is, the value of each currency unit is set in terms of a specific amount of gold.

With this system, the issuer of the currency guarantees that the banknotes and coins issued are backed by gold. If central banks back their currency in gold and silver, this system is called a bimetallic standard.

The money-gold equivalence has been the basis of the international financial system and its guarantee since the 19th century.

As a result of the needs arising from the First World War, some of the countries participating in the conflict printed more money to finance the war effort without the backing of the precious metal, which is known as fiduciary money, or fiat money (based on on the trust or faith of a promise to pay, but not backed by the precious metal).

It was at Bretton Woods (USA), on July 22, 1944, at the United Nations monetary and financial conference, when the adoption of the dollar as a global currency was approved. Until then, the US currency was legally convertible into gold, at a rate of $35 per ounce.

The gold standard remained in force in the United States until its abolition in 1971. From that moment on, the dollar was sustained only by the confidence it had placed in it and the US economy.

Currently, it costs the US Bureau of Minting and Printing a few cents to produce a $100 bill, while other countries have to produce $100 worth of actual merchandise to get one of those bills.

There are many economists and presidential advisers who have advised the different presidents of the United States to abandon the ‘dollar standard and return to the gold standard, with a modernized and international method, such as those proposed in 1960 and 1984, but no president has decided to take the step.

The fact that the monetary system is no longer based on the gold standard, but on a fiat money system, with no support other than trust in the central bank, has been the subject of much criticism.…

3 Reasons Why Gold Should Not Fear Cryptocurrencies

One of the most common topics in the world of investment during the last decade refers to gold and cryptocurrencies. Specifically, bitcoin, since its appearance 15 years ago, after the global financial crisis, has been considered ‘digital gold’ or ‘gold 2.0’ and it has been claimed that it came to replace the precious metal as a refuge asset.

However, those forecasts have not been fulfilled and bitcoin has not affected the gold market.

An interesting study published by ABC Bullion has investigated the impact that bitcoin has had on the gold market and concludes that, contrary to what is believed, the cryptocurrency has not affected the precious metal as an investment asset nor has it taken a share market.

The stagnation that the price of gold in dollars has suffered in recent times (but not in other currencies) may be an argument in favor of bitcoin taking over from gold as a refuge asset and hedge against inflation.

To this must be added the popularity that cryptocurrencies have acquired among the youngest investors, who are going to be the ones who move the most assets in the coming years.

However, ABC Bullion point out three reasons why gold is not going to be replaced by bitcoin:

1.- The So-Called ‘Lost Decade’ Of Gold Has Had Nothing To Do With Bitcoin

Indeed, the price of gold has not changed much since the end of 2011 when it began trading near $1,900 an ounce. While its performance over the past ten years may have disappointed some investors, remember that gold had risen to $1,900 from less than $300 an ounce in early 2000.

Gold was also considered the most popular long-term investment option among retail investors in 2011. It was only logical that after such a rise in previous years, gold would go through a corrective price cycle, which is exactly what happened. in the ‘lost decade’, since 2011.

In addition, ABC Bullion also point out that, in that period until the 2020 pandemic, the precious metal starred in:

  • One of the longest bull runs in equity markets on record.
  • One of the longest periods of economic growth.
  • The lowest ten-year period of official inflation rise in decades.
  • An unprecedented collapse in the prices of raw materials.

2.- Young Investors Are Getting Older

Precisely, this ‘lost decade’ of gold coincided with the birth of bitcoin and the cryptocurrency markets. Although younger investors quickly embraced investing in these new assets, their volatility and the need for safer long-term investments as they age have changed their views on gold. The bitcoin crash in 2022 will surely have contributed to this change of heart.

3.- The Bitcoin Market Is Very Small About The Gold Market

Bitcoin is still a tiny asset class. Their returns have been spectacular, but thanks to the fact that they started from nothing in terms of market size.

The following graph, produced by ABC Bullion, shows how insignificant bitcoin is in the context of the gold market, comparing the size of both markets between 2010 and 2022, and showing the percentage of that market that each asset contributes.

Even at its peak relative to gold, bitcoin accounted for less than 7% of the total share of both assets. Since 2010, bitcoin has averaged well under 2% of the share of both asset classes combined.

Since bitcoin was born, the gold market value has increased by $4.5 trillion, which is more than 12 times the entire growth in bitcoin’s value since its inception.…

How To Buy Gold In An Individual Retirement Account (IRA)

A Gold IRA can give you the tax benefits of a traditional account, but you must follow IRS regulations or face typical fines and penalties. Buying physical gold to keep in a retirement account can also be more expensive than investing in assets like stocks, bonds, or mutual funds.

It’s important to make sure you understand all the costs and expenses before you buy physical gold to keep in an IRA.

You can hold coins or bullion in a precious metals IRA. Despite the colloquial term “gold IRA”, you can hold silver, platinum, and palladium in this account.

The IRS has minimum requirements for the fineness of the metal, along with specifications for type, size, and weight. The gold approved by the IRS must be 99.5% pure. Silver must be 99.9% pure. Platinum and palladium must be 99.95% pure.

If you withdraw gold from your IRA before you turn 59½, you’ll be charged income tax on the value of that gold, as well as a 10% penalty for making an early withdrawal from a retirement account.

Gold IRAs must have an IRS-approved custodian. The custodian is a financial firm tasked with performing investment activities and administrative tasks that are necessary to keep your IRA up to date with IRS regulations, according to the Association of Retirement Industry Trusts, which is crucial to maintaining your tax status.

Common fees include account setup and maintenance, storage, and insurance. You will also be charged a surcharge, which varies by company and type of item when you purchase your precious metals. Only that you will need to approach your custodian, since it is not a frequent type of investment, the rates are usually not easily published.

The Role Of Gold In Retirement Savings Plans

Mexico has a well-developed financial system, with fully convertible currency and liquid capital markets. Over the past two decades, legislative changes have led to the privatization of pension fund management and, in early 2013, Mexico passed a law allowing the use of gold – as well as commodities – in pension fund portfolios. pensions.

The World Gold Council has taken a closer look at the benefits that gold can impart to the Mexican pension fund system.

The set of contributors to the Mexican pension system ranges from young people, with 30 or 40 years before their retirement, to older people who have only a small window for additional contributions.

As life expectancy in Mexico has increased from 61 years of age in 1970 to nearly 77 years today, it is important that investors carefully plan a sound strategy to ensure a comfortable retirement.

It is particularly important to complement the search for absolute returns with risk management, and gold can play a key role in long-term investment plans.

The Retirement Fund Administrators ( AFORES ) manage the Mexican pension funds. The different portfolios are organized into four age and asset allocation groups that vary concerning risk tolerance assumptions. Regulations established by the National Retirement Savings System Commission ( CONSAR ) ensure that each AFORE selects an appropriate asset allocation for participants.

For example, younger participants, given their longer investment horizon, are allowed to hold more stocks in their portfolios while older participants must invest primarily in Mexican government bonds.

Taking into account the norms established by CONSAR, the allocation to merchandise (including gold) for taxpayers up to 45 years of age is 10% and 5% for those between 46 and 59 years of age. Merchandise is currently not permitted for participants over 60 years of age.

How does gold benefit retirement portfolios in the Mexican system? World Gold Council analysis shows that gold plays an integral role in long-term performance. The reason for this is that gold:

  • It has been one of the most attractive assets of the last decade, hedging against the falls in the market during the financial crisis of 2008 and the devaluations in the Mexican peso,
  • helps preserve wealth over the long term by effectively managing risk and protecting purchasing power.

Our analysis shows that adding between 1% and 7% of gold assets (depending on risk tolerance) improves portfolio performance by obtaining higher risk-adjusted returns, lowering Value-at-Risk ) and reducing losses during price falls in financial markets.…

How To Rescue Your Retirement Investment Portfolio?

Whether you’re looking for ways to withdraw money from your savings without further depleting a stock mutual fund, or you’re looking for new ways to unleash some much-needed income, these tips can help your portfolio recover more quickly from the stab at hand. received the bull market in March.

Spend Less

You have already heard this advice many times from those who recommend you save. But it’s much easier to follow that advice in our new world of staying home.

After all, if you’re holed up at home, you’re not spending money on dinner or cocktails in the evening or on tickets to sporting events or concerts. Gas prices are low and you’re not filling up as often. Every dollar you don’t spend is a dollar that can be used for other things.

Use Economic Relief For COVID-19

We recommend that if you receive a 15% auto insurance reimbursement due to fewer accidents, reduce your 401(k) or retirement plan withdrawals by that amount. Similarly, if you receive a coronavirus relief check, reduce what you withdraw by that amount.

Going For Gold

One asset class that has been rising in value during these turbulent times is gold. The yellow metal has lived up to its reputation as a safe option during a crisis. The value of an ounce of gold rose from $1,525 at the beginning of the year to more than $1,700. That gain of about 12% is better than the 12% decline suffered by the S&P 500 stock index.

The same goes for silver, which sells for around $15 an ounce, though it’s down nearly $2 since the year began. If it doesn’t bring you joy, let it bring you money. To make sure you get the best price for your gold or silver, get a couple of quotes from reputable dealers.

Finance Big Purchases That Can’t Wait

Let’s say your car’s refrigerator or transmission breaks down. In a normal situation, you would pay for the replacement of major appliances or car repairs with cash. However, doing so now will deprive you of the money you need for other things.

One solution you might consider is taking advantage of lower borrowing costs or an interest-free credit card offer, warning that “that can buy you time.” Waller notes that financial markets tend to post positive returns six to twelve months after the low point during a major correction.

Bottom Line: This may be the right time to convert that gold watch to dollars, says Ogorek. “Gold prices have risen. If you have physical gold in jewelry or coins, this may be a good time to redeem it.” Sure, you’re not going to get rid of pieces that have a lot of sentimental value, but if you have gold pieces you don’t want, consider getting some money for them.