Five Reasons to Try a Gold 401k

Whether you’re twenty-five or fifty-five, retirement is something you should be thinking about.  Why is that?  Well – when you reach the age where we can finally stop working, we want a nest egg that we can finally hatch and reap the benefits of.  This is the best way to ensure we get to enjoy our post-working years.

There are plenty of strategies for approaching this, of course.  A lot of people start investing early.  What should we invest in, though?  That’s the big question, and one I hope to provide some guidance on today.  Stick around the learn more about investing in gold and how that can work for a 401(k) account.

What is a 401(k)?

As you may already know, it is a form of retirement account.  It is both for saving and investing.  Usually, employers offer them.  You should inquire with your employer and find out the options that are available for you.

One of the main perks of them is that they give tax benefits to the account holder.  The way it works is that a portion of your paychecks are withdrawn automatically and placed into this account.  Depending on your employer, they will either match all or a part of that contribution.  You are given tax breaks for this.

There are some limits to this.  Namely, there is a limit to how much money you can deposit in a year.  In 2022, these figures were twenty thousand and five hundred dollars for anyone under age fifty, or twenty-seven thousand dollars for anyone fifty or older.  Thankfully, these limits are not incredibly restrictive.

There are a few types of them.  These are traditional and Roth.  Each has its own unique taxation terms and benefits.  As you create your account, consider what type will be better for you and go from there.  The traditional style involved taxation on your withdrawals, while a Roth means that the initial deposits will be taxed but not the withdrawals.

What does Gold have to do with This?

Now that you understand what 401(k)s are, you’re probably wondering how gold is related to this.  After all, I’ve mentioned cash holdings so far – and, notably, shares of your company can be a part of a 401(k) – but not any alternative asset types.  This is because they are not usually allowed in this sort of account.

So…why am I talking about it at all?  Well, there are ways that you can turn your 401(k) into a self-directed IRA or precious metals IRA.  I know this might seem far-fetched, so you can take a look at this page,  if you are uncertain.  Why would you want to do this?

Ideally, you will probably want to have both types of retirement accounts.  IRAs, or individual retirement arrangements, are a bit more flexible though.  You can open a self-directed one and oversee your own finances.  This means that you are free to cast a wider net in terms of what assets you want to include in your portfolio.

This could always be something like the real estate market.  Plenty of people have turned house flipping into a lifestyle.  Landlords who rent out their properties could also do this.  However, one of the primary assets I’m referring to are commodities.

For the uninitiated, commodities are usually raw materials that are traded and sold on a large scale.  Often, they are traded globally.  There are a few categories of them.  You are probably familiar with livestock or with agriculture, since a lot of the foods we eat we get via these trade routes and systems.

Precious metals are a form of commodity.  Gold is obviously one of them, but there is also silver, platinum, and palladium.  They come in a few forms, but most commonly you will see bullion.  This might be a large bar like below, or a smaller one like above.

You usually cannot find bullion of platinum or palladium, though.  They are rare in comparison to gold and silver and used in things like expensive jewelry or automobile manufacturing.  This means that acquiring the physical good might be difficult.

Instead, if you want to get into palladium or platinum, you may want to purchase stocks or shares of a company involved with mining them or using it in manufacturing.  Companies that engineer vehicles might be an option.

Why Invest in Precious Metals, though?

There is a surprising amount of precedent for wanting to get involved in this market.  The primary thing to remember is that gold has been valuable to humans for centuries, if not thousands of years.  It has been used in creating valuables since the time of the pharaohs in Egypt and the Roman Emperors.

There were a lot of coins made from it as well.  The “gold standard” exists for a reason!  In a lot of cases, it is still worth quite a lot.  You can watch the market prices for it and see for yourself that it remains a solid investment to add to your folder.

The same goes for silver.  While it is more abundant than gold and not quite as valuable, this does not diminish its status as a precious metal.  Silver coins are more abundant to this day.  Many people love their silver bracelets or necklaces.

The security is the big reason people invest in this form of commodity.  If you’re worried about rising inflation, which is a valid concern at this point, you may want something to protect yourself and your family from that.  One of the things you could use is a precious metal like gold or silver.

In a way, it serves as a hedge against that issue.  Additionally, you are not obligated to collect the physical objects at all, but you are allowed to store some gold coins in a precious metals IRA account.  There is a list of accepted currencies that the IRS provides.

Overall, converting some of your 401(k) into a self-directed IRA is a good choice for you if you are looking to diversify.  Consider it!