Gold IRA Retirement Planning: Tips
Why should you invest in gold? Why should you use your IRA to invest in precious metals in the first place? The reality is that the current global stock market is focused on equities. We are, of course, talking about hype. Stocks go up. Stocks go down.
If you really look at the equities market, regardless of the country, a lot of the action is really based on the potential of the company. In other words, you are not really looking at an investment vehicle that is guaranteed to have value in the future or has a proven track record of being at least worth something at a point in time.
This is the big weakness of socks. Everybody knows this. You are basically just betting on the present. The greatest advantages of investing in precious metals and gold, in particular, is that you are betting on an investment vehicle that has a proven historical value. As far back as recorded time, people have looked at gold as something of value.
As far back as thousands of years ago, people have always considered gold as a safe investment. Thanks to innovations in technology, we now have the technology to make sure that whatever gold we invest in is pure. Unfortunately, this all gets lost in the hype, and many people would rather invest in stocks like Twitter and Facebook rather than gold.
If you see the hand writing on the wall regarding gold as a safe haven in times of disaster or economic uncertainty, you might want to open a gold IRA. However, just like anything in life, if you fail to plan you are really planning to fail. Make sure you follow these basic tips in gold IRA retirement planning.
Do your research on IRAs
Make sure you do thorough research on your Individual Retirement Account. Make sure you have a clear understanding of whatever options are available to you. Make sure you fully understand how they are funded and how they are maintained.
Most importantly, pay attention to the costs involved in IRAs. A key part of this is, of course, picking the right IRA custodian. You have to be very clear regarding these basic questions, otherwise, you are just basically taking shots in the dark with your gold IRA retirement plan.
Ask feedback regarding IRA companies
There are different IRA custodian companies. These are companies that are formed specifically to help manage and maintain people’s IRAs. Most of these companies have solid reputations.
Most of these companies know what they are doing. Most of these companies are worth your trust. The problem is there is a small minority of companies that are quite shady or can not be trusted. Do not be surprised, this happens in all industries. This happens in all parts of the global financial market. IRA management and IRA custodians are not immune from this reality.
This is why it is very important for you to ask for feedback from financial planners as well as looking at industry sources regarding the relative reputation of the different IRA companies that you are thinking of doing business with.
Get a certified custodian
The great thing about taking out your gold IRA with a certified IRA custodian is that certifying bodies have a lot to loose if they certify scammers.
That really is the bottom line. Just as you would feel really embarrassed among your friends if you set your friend up with a jerk, or you recommend a product that ends up hurting your friends. Certification bodies are very protective of their reputation.
Make this work to your advantage. You have to remember, certification bodies make money and stay in business when they make solid referrals. Their name means a lot to them. You can use this to your advantage by insisting on going with a certified custodian. The reality is that not all custodians have many third party certifications.
They may have minimal certifications, which most people in the market need to have, but you need to go the extra mile. Pay special attention to companies that really go out of their way to get accredited by third party organizations.
The more third party organization accredit them, the better for your peace of mind. While a third party certification and accreditation does not necessarily mean that the company that you are thinking of doing business with is truly trust worthy, it does go a long way.
In addition to the potential loss of face mentioned above, certifications and accreditation often involve screening processes. These are not random processes, these are actually very finely tailored to how the IRA industry works in the United States. Once again, make use of this process and make it work for you.
Decide on what type of gold to invest in
Once you have opened your gold IRA account, your next step is to invest on what kind of gold to invest in. Believe it or not, there are many ways to invest in gold.
The most obvious way, of course, is to invest in gold stocks. The problem with this form of investing in gold is that you are essentially taking a bet on a company. This is not much different from investing in typical stocks.
You might think that gold miners would be priced the same because they are in the same industry, but the reality is that different companies are run differently.
Different companies have different reputation. Different companies operate in different countries which might impact their economic prospects. There are just so many random variables when you are investing in stock, so investing in gold stocks is probably not the way to go.
Other approaches to invest in actual gold is through ETFs. The great thing about investing in these Exchange Traded Funds is that these are actual investments in physical gold. You are basically placing a direct bet on gold. If gold goes up, there is minimal translations costs.
Trading in ETF is basically a naked play on gold. This helps you with costs and it also helps take out a lot of the miss-communication and lack of clarity that you would get if you invested in precious metals directly or in gold coins.