Guest post by Tiberiu Lavorenciuc
Are you wondering about the right way to invest in gold? Some people will convince you to buy gold jewelry and hoard it in your safe at home. Others will tell you to sink all of your money into gold stocks and mining companies.
Do these methods sound like the best way to invest in this hot commodity? Or do they sound like they’ll lead to eventually losing your money?
Gold jewelry can easily get stolen from a safe at home. Or, one of your loved ones may decide to wear a gold chain and lose it while out and about.
Gold stocks are volatile to say the least. You might end up losing a small fortune if you aren’t lucky. This is true If and when you buy at the wrong time and sell at an even worse time.
The smartest way to invest in gold is through a gold IRA rollover. Not only will your investment remain safe and protected in a secured vault. It will grow for years or decades before you begin taking tax-free or tax-deferred distributions.
Why is a gold IRA rollover a superior investment opportunity?
Other gold investing methods do not measure up to the value and benefits of a precious metals IRA. You could end up making seriously devastating mistakes if you buy gold outside of this IRS-approved structure.
Gold IRA rollover investing is superior to other strategies because:
- It’s difficult to sell gold if you aren’t working with a reputable broker. Most gold IRA companies have a rock-solid buy-back program in place. You can instantly liquidate your investment if you ever need to get capital quickly. Hoarding gold coins and jewelry at home will create difficulties when it’s time to sell. And you’ll likely end up losing money in the process.
- Stockbrokers recommend untrustworthy gold stocks. They’ll have a basket of stocks that they want you to buy including gold ETFs. These investments often lose value for no reason. It’s much safer and more secure to invest in physical gold. You won’t have to deal with the volatile price swings of the stock market.
- The tax advantages are tremendous. You can rollover your existing retirement account into a tax-deferred or tax-free IRA and truly capitalize. The IRS rarely provides tax breaks, but the benefits of this account are second to none. Depending on how you structure the account, you’ll either pay the going tax rate with the tax-deferred account. Or you’ll pay taxes on your money before depositing in the account. So, anything that you earn is yours to keep in retirement.
- Investing in gold stocks and ETFs encourages Daytrading. And Daytrading is the one surefire way to lose large amounts of money very quickly. You can buy a stock and suddenly watch it lose massive value immediately. You’ll get scared and unfortunately sell it for a loss. Investing in gold through an IRA rollover means weathering the ups and downs. And you’ll accumulate value over the course of many decades.
Should I buy gold from online classified websites?
No! Never buy gold from these websites. You have no idea who you’re dealing with. Unless you’re a qualified expert, you should avoid these websites at all costs.
Why? You may end up being the unlucky one who gets scammed for everything that you own. You may end up spending tens of thousands of dollars to buy gold coins and bars. Only to find out that every one of them is fake.
Is it really worth the risk? Only if you truly know what you’re doing and you can get a great deal. But you’ll still miss out on the amazing tax benefits of buying through a gold IRA. So, your good deal isn’t as advantageous as it seems nonetheless.
Thebest way to invest in gold to secure your retirement future
As I’ve already stated, the only smart way to invest in gold is through a precious metals IRA. Why do I feel this way?
The investor can grow their wealth strategically and most effectively using this investment strategy. How so?
You can set up your account one of two ways.
Each of these strategies has their positives and negatives.
The plus side for the tax-deferred account includes:
You can put more of your wealth into your account before the IRS takes their cut. This means you’ll deposit more money into your gold IRA account each year. You’ll invest that money into precious metals like gold, silver, platinum and palladium. And the value of these investments will grow over time. You will only have to pay taxes once you take distributions beginning at 59 ½ years of age or older.
The potential downside for a tax-deferred account includes:
You’ll have to pay taxes on these investments eventually. Who knows where the tax rate will be by the time you reach distribution age? It might make more sense to pay your taxes beforehand and accumulate tax-free wealth.
The plus side of a tax-free account includes:
As the name states, all of the wealth that you accumulate in this gold IRA account is yours to keep. You pay taxes on your money once before depositing it into this account. You can then use this money to grow your wealth. At distribution age, you can take everything out of the account and keep it all. You’ve already paid your taxes and the rest of the money is yours.
The potential downside for a tax-free account includes:
You will have less money available to grow your account. Over the long run, you may accumulate less money as you work toward retirement. This means having less money available to you once you’ve finally reached retirement age and no longer work.
The Bottom Line
Clearly, initiating a gold IRA rollover provides the biggest benefits for you and your loved ones over the long term. It truly is the right way to invest in gold.
How you structure your account is up to you and your gold IRA custodian. You can choose the tax-free or tax-deferred method based on your wants and needs.
Just remember: rollover your 401k before you begin investing in precious metals. This strategy is the best way to legally accumulate the greatest amounts of wealth over the long term. The pesky IRS created this loophole for you and other future retirees, so please make the most of it.
Tiberiu Lavorenciuc is manager at Easylink Studio