Reasons to Convert Your IRA to Gold

Utilizing an IRA as an investment vehicle is one of the best ways to save for retirement. An IRA’s tax-deferred or tax-free gains allow you to grow your savings until you are ready to start taking distributions in your retirement age. 

While most people view stocks and bonds as a major part of their IRA, converting an IRA to a Gold IRA allows you to get all the benefits of the precious metal while keeping your IRA structure, making it a win-win for investors. 

Here are ten reasons why you should consider converting your IRA to gold.

Why convert IRA to gold?

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1. Diversification

Economist and Nobel Prize winner Harry Markowitz once said that when it comes to investing, “diversification is the only free lunch.” That’s because diversification spreads risk across a wide range of investments while simultaneously increasing the odds of portfolio growth. But to truly be diversified, your IRA needs more than just stocks and bonds; it needs other uncorrelated vehicles. 

When comparing the price of gold to stocks over the past several decades, you will notice that gold often does not move in the same direction as stocks. Instead, its price tends to increase when there is downward pressure on financial markets. This makes gold a great alternative investment for a diversified retirement portfolio, as it moves independently from other assets.

2. Safe Haven

The economy goes through cyclical periods of expansion and contraction. During periods of growth, having all of your money in the stock market might feel like the right course of action. Expansion periods don’t last forever, however, as economic contraction is an inevitable outcome that could lead to a potential recession.  

It’s impossible to know when the economy will begin to contract. Therefore, it’s always a good idea to have a safe haven asset in your retirement portfolio that you can rely on during these slow and negative growth periods. Gold sustains its value better than most holdings during weak economic times. During periods of economic uncertainty like Brexit and the aftermath of the 2008 financial crisis, gold performed much better for retirement portfolios than other assets. As you can see, gold is one of the best safe haven assets no matter the economic conditions. 

3. Inflation Hedge

The U.S. dollar has an inflation problem. Over the years, the purchasing power of the dollar has fallen significantly to the point where $100 in 1913 would only be worth a fraction of that amount today. Research shows that no matter the time period, gold always serves as a hedge against currency inflation. When the U.S. dollar is weak and loses its purchasing power, gold remains strong, and even rallies. A Gold IRA is the perfect way to fortify against a potential weakening of the U.S. dollar.

4. Political Protection

Every few years in the United States, the political system plays musical chairs, and newly elected officials take office. Such regular political change leads to new monetary and fiscal policies.

As you head toward retirement, it’s best to ensure that the newest political regime won’t punish savers like you who’ve worked to build a nest egg over the years. A Gold IRA helps to preserve wealth for retirement even during times of political uncertainty.

protect your savings with gold IRA5. Growth potential

Gold, like any other asset, is subject to the law of supply and demand. With a finite supply of gold on the planet and broadening demand from investors, gold is an asset that will always have a potential for financial gains. As more and more investors flock to gold during downturns in the economy, the demand for gold far outpaces the supply in the market. In these instances, the price of gold has nowhere to go but up to compensate for this supply-demand imbalance. This gives gold a considerable growth potential within a retirement account. 

Additionally, the growth potential of gold’s value above and beyond the inflation rate is particularly noteworthy. While the value of the U.S. dollar decreases from one day to the next, the value of gold increases with time. In fact, the purchasing power of the U.S. dollar decreased by 1.2% from November of 2019 to November of 2020, while the value of gold increased by over 16% during the same time period. 

6. Long-term Security

Gold has staying power that other assets simply do not have. The precious metal was first used as a form of currency in 550 BC. England minted gold coins throughout its history until 1917, under intense economic pressure during World War I. Gold currency lasted in the U.S. until 1933, when gold was withdrawn from circulation during the Great Depression. From the time of King Croesus of Lydia to the present day, gold has been one of the few universally-recognized forms of money. 

The next time you consider your approaching retirement, think about the thousands of years that gold has served as a secure asset to almost every civilization on Earth. A Gold IRA can be a foundation for long-term financial security in retirement that other investments can’t. 

7. More options

Gold isn’t the only precious metal you can invest in with an IRA. You can also invest in silver, platinum, and palladium. Additionally, precious metals come in various forms, like bullion, bars, coins, and more, adding to the different ways you can add to your retirement savings. This allows you to diversify your investment holdings further within precious metals, giving you even more investment options for your IRA.

8. Tax Benefits

Savers love stashing money in an IRA for the tax benefits they receive. Luckily, investing in a Gold IRA provides those same tax benefits while allowing you to diversify your retirement savings into precious metals. You don’t have to give up the tax benefits of an IRA to invest in gold.

9. Steer clear of Washington’s whims and follies

Liquidity is the hallmark of a quality holding. When economic conditions change, you’ll want to be able to buy and sell an asset at a moment’s notice. Gold fits the bill as a liquid asset, with millions of coins and bars trading hands daily. In fact, gold is the third-most traded asset in the U.S. 

This makes gold an easy investment to trade in and out of as needed.

10. It’s easy…

Converting your IRA to a Gold IRA couldn’t be easier and can even be done with just one phone call. Birch Gold Group can help you every step of the way in converting your existing IRA to a Gold IRA. Since 2003, Birch Gold Group has helped nearly 10,000 Americans just like you diversify their retirement savings with gold and other precious metals. 

Call (800) 355-2116 to speak with our knowledgeable Gold IRA specialists today, or click here to learn more.


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