Retiring on Gold

June 4th, 2010 by

As the “baby boomer” generation rolls into retirement amidst an economic climate that all too often feels like an outpost in Siberia instead of a condo in Boca Raton, a growing number of individuals are looking to insulate their retirement funds by diversifying.

Wisely enough, many are getting out of the turbulent stock market and dollar-denominated assets, and are now looking to gold and other precious metals. Their investment, along with that of global participants is bolstering bullion markets and making metals look like a safer and safer bet. The question is how best to get in on the action.

There are a couple of ways to make gold and other precious metals part of your retirement portfolio.

  • Buy Bullion: If you’re not opposed to holding physical bullion at home or keeping it in a safety deposit box, you ought to consider doing just that. While many precious metal-backed securities and investments are “as good as gold,” there’s nothing quite like the security of knowing exactly where it is at all times. In addition, if you anticipate cashing in on your investment in the near future, know that the physical commodities are more liquid than their paper counterparts. Their market, especially in times of crisis, is larger and personally holding the bullion typically allows you to circumvent a lot of the paperwork involved in selling your assets.
  • Rollover Your IRA: Holding a stock-based IRA leaves your retirement funds open to the ups and downs of the stock market. In times of economic turbulence, this can be undesirable. Many financial institutions offer a “Precious Metals IRA.” If you already have an IRA with a particular firm, talk to your broker about rolling some or all of it into one that includes precious metals. If this is not an option, consider opening a second IRA to accomplish your diversification goals.

The prices of precious metals historically exhibit movements opposite that of the stock market and dollar-denominated assets. Many recognized experts recommend that between 5-10% of your retirement fund be dedicated to precious metals. If you haven’t already, consider one of the above options for making modern bullion part of your plan for the future.

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