is investing in gold ira inflation proof

You’ve read the news. According to the Wall Street Journal, inflation hit a four-decade high of 9.1%. Inflation doesn’t just affect your purchasing power, but can seriously erode your bond- and stock-backed investments and savings (which are inherently fiat currency-backed).

If you’re wondering, “Is investing in gold IRA inflation-proof?” Well, Your Gold IRA Guide has some great news for you.

These days, investors are looking for many ways to diversification their portfolio as part of their retirement planning. That is why many are choosing to go with self-directed IRA options like gold IRAs. But, is this the right investment strategy?

Why is investing in gold a good move? Are gold IRAs really invulnerable to inflation and other economic problems? Your Gold IRA Guide is here to answer your questions. Read on to learn more!

Outlook On Gold

For nearly 3,000 years, humans have recognized gold as an easily transferable currency that can store value. Different from other metals such as silver and bronze, gold became a measure of money, status, and power.

On the other hand, gold is also beneficial for economic purposes. A long time ago, gold was used as a form of currency. Nowadays, gold holds a similar function in the society, especially in investments like alternative assets.

Apart from these factors, the interest of many individuals revolves around gold’s capacity to become an inflation hedge. For that, gold ira (IRS approved individual retirement accounts) are becoming increasingly common, often managed by a custodian and stored in an approved depository.

So, what is a gold IRA, exactly? A gold investment retirement account is a type of a self-directed IRA that focuses on using precious metals as assets. These often include gold and silver, but can also include precious metals such as palladium meeting specific purity standards. There are some important differences when comparing gold- and dollar-backed IRAs like the Traditional IRA, but these have more in common that you likely realize, including similar tax advantages that are tax-deferred.

Later on in this article we will explore these comparisons like rollover processes and also tackle the question of why and how gold IRAs are inflation-proof, even amidst economic uncertainty.

Background and Benefits of Gold IRAs

Did you know that a gold IRA allows pre-tax contributions similar to a Roth IRA? What’s more, gains from investments are tax-deferred. Limitations and policies between the two types of investment retirement accounts like SEP IRA and Solo 401k are also identical per IRS rules.

Gold IRAs use non-traditional assets (gold) unlike bitcoin or ethereum in a Crypto IRA. While not nearly as popular as other assets, such as stocks and bonds with higher volatility, gold IRAs do offer distinct benefits.

It’s important to note that the gold that upholds gold IRAs, such as American Eagle, Maple Leaf, Australian Kangaroo, Austrian Philharmonic, or American Buffalo bullion coins, must be stored with a secure storage and approved depository partner. This means you cannot hold physical gold at your home, safety deposit box or other facility, unlike cold wallets for Bitcoin.

Since gold IRAs are held in another facility with associated storage fees and maintenance fees, it’s unsurprising that there are a number of scams involving gold IRAs you will want to avoid.

Some of the best benefits of having an investment retirement account that is backed by gold include:

• Diversifies portfolio
  
• Value will continue to increase as supply decreases
• Intrinsic value will always be maintained
• Protects investments from deflation
• Hedge against inflation

Gold IRA companies, such as Goldco and Alto CryptoIRA®, Coinbase, or Advanta IRA, are vocal when it comes to these benefits considering your risk tolerance and time horizon. We will be talking more about the last benefit, especially in times of market turbulence.

What is Inflation and What Causes It?

We all know inflation influenced by the Federal Reserve is not good for most types of investment, but what is inflation and what causes it, particularly in terms of liquidity and passive income potential?

Inflation is defined as the “decline of of purchasing power of currency over time”. In simpler terms, the money you have today cannot buy the same amount of goods in the future.

Consequently, inflation rate is not increasing at a steady rate. Favorable situations will cause the rate to decrease. Nevertheless, more factors contribute to the inflation rate going up at a slow rate, impacting wealth preservation.

Some of these contributors are as follows

• Power of individual currency
• Market movement
• Supply chain disruptions
• government policies
• Government policies and regulations

As the rate of inflation rises, your personal buying power also goes down. Because of this, it’s recommended to buy gold from bullion dealers when the rate of inflation rate is stable and steady, taking into account investment minimums and portfolio diversity.

With all of this mind, let’s answer the main question: Are gold IRAs really inflation-proof or not, compared to something like shares in Barrick Gold Corporation or SPDR Gold Shares ETF?

The Truth About Gold IRAs

As we previously stated, gold can be a currency substitute. This is especially helpful when the currency of a country begins to lose its value. Moreover, gold, with its intrinsic value, is touted as a hedge against inflation.

Gold is an investment and physical asset, but it can also be used to purchase goods and services. And, while many experts rightfully believe that gold is a strong asset to have, it’s not the best investment. Since gold is a strategic investment, many investors refer to it ”as an asset without utility,” meaning it will not gain nor lose value – even in the long run.

Another thing to keep in mind: With the increase in inflation, banks will also increase their rates in order to shore up institutional stability. Under this scenario, gold IRAs will neither benefit nor suffer.

While holding onto gold is always a good thing in terms of creating a hedge against inflation, there are other assets that will increase in value concurrently with the rate of inflation.

Conclusion

So, if you’re wondering, “Is investing in a Gold IRA inflation proof?” the answer would have to be an unequivocal “YES!”

It is an asset, much like digital gold or traditional bullion, that will always retain a majority of its value, ensuring it is a solid hedge against inflation. Gold IRAs can be a great way to protect your financial future, especially with all the risks of inflation and the current geopolitical climate.

If your aim is to diversify your investment portfolio with options like Crypto IRA, SDIRA, Roth IRA, Traditional IRA, SEP IRA, or Solo 401(k) and protect yourself from market volatility, then a gold IRA might be the best option for you. Consider assets like Bitcoin, Ethereum, or Alto CryptoIRA® through custodians like Advanta IRA or exchanges like Coinbase. If you do plan to invest in gold, we recommend coins like the American Gold Eagle“>American Gold Eagle, Canadian Gold Maple Leaf, Australian Kangaroo, Austrian Philharmonic, or American Buffalo, or even ETFs like SPDR Gold Shares ETF or mining companies like Barrick Gold Corporation despite Federal Reserve policies and IRS regulations. We highly recommend Augusta Precious Metals. They have an incredible 4.9- out of 5-star rating through Google reviews, a 5-star rating through TrustLink and an A+ rating through the Better Business Bureau.

Have questions about investing in gold or alto cryptoiracrypto? Call Your Gold IRA Guide today at 1-855-444-7022 for advice from the experts.

Thank you for reading our article on how to inflation-proof your investment portfolio with gold IRAs. Feel free to share any comments, questions, or suggestions in the field below