How to Turn Straw into Gold with a Gold IRA or 401k

Gold IRA investors are turning straw into gold!

Decreased returns coupled with concerns about inflation have investors seeking alternatives, especially with regard to retirement investments. Retirement losses over the last several years are estimated at $2 Trillion. As a result, investors are seeking creative ways to boost and stabilize 401k values. Some turn to gold and other metals investments to accomplish these goals. Others invest in gold or silver purely as a way to diversify an investment portfolio that has historically not included metals investments.

The Blanchard Economic Research Unit lists six reasons why investors own gold: as a hedge against inflation and/or a declining dollar, as a safe haven in times of geopolitical and financial market instability, as a commodity based on gold’s supply and demand fundamentals, as a store of value, and as a portfolio diversifier. Blanchard also notes that the price of gold increases in market situations where the value of traditional paper investments like stocks and bonds decrease. This tendency for increase is one reason that investors cite for choosing gold as a diversification tool for investment portfolios. What’s an investor to do with a room full of proverbial straw and no Rumplestiltskin-style heroes in sight? It turns out that investing in gold and other precious metals is relatively straightforward once investors choose the type of metal investment that fits their goals best.

Gold and silver investment come in several forms. Two possible ways to approach a Gold IRA include:

1. Gold-Exchange Traded Fund (Gold ETF) – Shares in these funds are publicly traded via any major stock exchange. The fund itself is not made up of physical gold, but rather gold derivative contracts backed by physical gold. Since derivative contracts do not represent the exchange of any real assets, even if the investor sells the shares in the fund no actual physical gold would ever be received. Shares are sold for cash equivalent value.
2. Gold or Silver Bullion or Coins in an IRA (GOLD IRAs) – Actual bullion and/or coins are purchased with retirement savings and held as a plan asset. Precious metals can be sold and liquidated to cash form or distributed in lieu of cash to the investor without penalty at 59 ½ or older.

For investors interested in purchasing physical gold or silver with their 401k funds, the first step is to open a self-directed IRA account. Then 401k funds can be rolled into a self-directed gold IRA for purchasing precious metals. Only Self-Directed IRAs can purchase physical gold or silver as an IRA investment. The investor then works with their dealer of choice to negotiate the investment purchase for the IRA. Investors should be aware that collectibles are not eligible for IRA investment and consult a list of gold and silver investments allowed for IRAs before making a final choice. Once purchased, the physical gold or silver bars or coins must be stored with a depository company not with the investor. At New Direction IRA, the IRA investor can choose to work with any depository of choice. The gold, silver or other metal will be stored at the depository for the IRA until it is sold or distributed from the account.

For investors that seek assets that can be held in hand, Gold IRAs offer a clear advantage. For more information on how to purchase gold or silver with your 401k, visit Gold.NewDirectionIRA.com.