July 11th, 2019 | Updated on June 3rd, 2021
What is an IRA? In simple terms, this is an acronym for an Individual Retirement Account or 401(k). Now, if you’re in your active career years and have no clue what this is, then it’s likely you don’t have one yet.
Everyone needs some extra income to survive the brutal tides of economic fluctuations that come unannounced. It could be an extra job, a side hustle, or simply an investment scheme; either way, there is something to generate some extra cash.
For a retiree, the odds are very different. By this time, there is not much energy to keep a job, leave alone working multiple jobs. Unfortunately, with no job, there’s no income.
However, having invested in an IRA means that you don’t have to work to get income. There are different options when it comes to growing your retirement portfolio.
However, given the economic inflation, some investments do not end up reaping the desired benefits. An alternative for this is investing in precious metals.
In a volatile market, precious metals have been known to gain value even more with economic uncertainty. This means that they stand as a good long-term investment choice.
1. Why Investing In A Gold IRA Is A Good Idea
Alongside other precious metals, gold has been considered a haven of wealth from years past to present; and clearly, the narrative is not changing. Not only does this mean that gold IRA investing is an asset, but it also offers an investment diversification that can allow you to retire comfortably without having to worry.
If you have already invested in a traditional IRA or perhaps a company-sponsored scheme, then some weaknesses might be hidden from you, which is commonplace for paperback investments.
Such investments are heavily dependent on the value of the dollar, and since going off the Gold Standard, the US has seen the buying power of the dollar weaken by the day. The ripple effect is the hiking of gas prices, which shifts the prices of food upwards.
That means that gold IRA investing will simply hedge your investment against inflation. From history, it’s has been revealed that the value of Gold has been increasing alongside inflation. This renders a gold IRA as a smart investment choice.
Besides its use in a self-directed IRA (which is the only tool for gold investing with tax advantages), gold has many more practical uses, which ensures that it’s in constant high demand.
The jewelry industry, for example, takes up over 50% of the gold demand globally. With populations increasing at an all-time high globally, you can be certain that the demand for gold will continue to increase.
2. Beyond The Gold-backed IRA
Following from the previous section, it’s clear that gold has more practical uses beyond IRA investing. Apart from the jewelry industry, the growing world of technology also draws a lot from precious metals.
Given the vast industrial and commercial usage, their value goes beyond exchange rates given the cycle of supply and demand. As more uses of these metals increase, there is a finite supply of these metals in the market. This results in an increased demand that inflates its value.
Gold, for instance, is useful in making smartphones, tablets, laptops, solar panels, gaming consoles, and so much more. Statistics show that users of such devices will continue to grow in leaps and bounds, causing an explosion in demand for the conductive metal.
The mining and production of gold have become difficult. This makes it more expensive and reduces its production quantities. As we move further into the information era, there will be more need for it, which will mean more resources to mine and produce it, making it a hot cake in the market.
3. The Future For The Gold IRA Investor
What this means is that, as an investor of gold, you will have all the reasons to smile because gold is not about to get any cheaper. As a matter of fact, as you consider taking on a gold IRA investment, you may also want to go deeper into other precious metals and diversify your portfolio.
By the time you’re getting to your retirement age, you can take physical distributions of the metals or simply sell it back at market rate.