The vast majority of 401 (k) plans don’t allow individuals to invest directly in physical gold. However, there are gold IRAs that specialize in holding precious metals for retirement. However, investors can use their 401 (k), s to find specific investment funds or ETFs that hold gold or gold mining stocks. Given this fact, investors might want to focus their attention on investing in gold as a retirement plan.
While there are advantages and disadvantages to using gold for retirement, which you can find out more about here, many successful investors regard the precious metal as a safe investment. Read on to find out three ways you can invest in gold for retirement. From physical gold to stocks to gold-backed assets, there are a variety of options for those who choose to use gold to prepare for retirement. There are a variety of ways to invest in gold.
You can buy physical gold in the form of jewelry, gold bars, and coins, buy shares in a gold mining company or other gold investment, or buy something that derives its value from gold. Each method has its advantages and disadvantages. That can make it daunting for beginners to know how they can best get involved in this precious metal. Gold investment funds, such as Franklin Templeton’s Gold and Precious Metals Fund, are actively managed by professional investors.
Gold stocks can be a great way to benefit indirectly from rising gold demand and rising gold prices, but you need to take due care when choosing gold stocks. Gold stocks normally follow the price of gold but may retreat while the price of gold rises if the economy stalls. Gold ETFs focus on owning physical gold or stocks of gold mining companies, creating different risk profiles. For example, the Internal Revenue Service (IRS) only allows 24-carat gold bars and coins to be included in gold-plated IRAs (with the exception of 22-carat American Eagle coins).
If you’re still convinced gold is for you, you can invest in funds that own gold, although many gold fans, often referred to as gold bugs, prefer to buy the physical metal, although this may mean additional costs for storage and insurance. This helps investors seeking the security and inflation protection of gold benefit from a gold investment with more liquidity than a physical gold investment. When you buy stock in a gold company, you’re more likely to buy into a gold mining or processing plant than into gold itself. Owning real gold may sound exciting, but keeping it in your home can be a security issue if someone finds out that you have the gold in your possession.
Expensive gold jewelry can retain its value, although this is often due more to its value as a collector’s item than to its gold content. Gold investment funds can invest in any mix of physical gold investments, precious metal processing stocks, other precious metals or precious stones, and stocks of domestic and foreign gold mining companies. Meanwhile, gold streaming and royalty companies are providing gold miners with capital to develop and expand mines. Options contracts also allow the holder to buy or sell shares in a gold ETF or gold mining stock at a specific price and date.
Another way to own physical gold is to invest in gold ETRs from the Canadian Gold Reserve Program. You might think that investing in gold stocks is only for investors who are deeply entrenched in the stock market, but the fact is that anyone can invest in gold stocks if they’re willing to put in some work. Collector coins such as South African Krugerrands, Canadian Maple Leafs, and American Gold Eagles are the most widely used type of gold coin.
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