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If you are in the business of wealth management, you know that there are many ways to build a portfolio for your clients. Different clients will have different goals, but every portfolio needs to be well-rounded and include stable assets as well as more volatile assets. This provides the checks and balances needed to create a mature portfolio that will stand the test of time.
Many consumers are hesitant to break from tradition and invest in IRA funds that are not the ones that their parents told them about. It can be tough to explain the benefits of something like a Gold IRA to those who are not familiar with the perks of choosing this kind of investment. Knowing how to explain the benefits of Gold IRAs can be really beneficial for wealth management experts.
Perks of a Gold IRA
These kinds of investments come with some key benefits that clients should be aware of. The best gold IRA providers will be able to offer up these kinds of perks to anyone who is investing.
Gold IRAs Offer Tax Benefits
Gold IRAs are a great choice due to the tax treatments that they offer. Contributions to these kinds of investments offer the same benefits as a traditional IRA in most cases. This means that contributions are tax-deductible and that withdrawals are tax-free. Many investors don’t realize that this is the case, and they might avoid this kind of IRA, thinking that it will not behave in the way that a Roth IRA would. When it comes to diversity, Gold IRA investments are a great way to back up traditional Roth investments in a portfolio for this reason.
Long-Term Hold
Physical gold isn’t liquid, but IRA holdings, as a rule, are not. This means that this is a great buy-and-hold investment that’s backed by something really powerful. Gold-standard investments are really ideal for this kind of investing style because they are backed by something that will never lose its value. While the value of gold can fluctuate quite a bit from year to year, that does not mean that gold will ever be entirely without value.
Control is Easy
Gold IRAs are self-directed, which makes them easy to manage, and the holder of the IRA can make all the investment decisions if they wish. This is a really nice feeling for those who like to manage their own investments to some degree, and it can offer peace of mind if other investments that are not as hands-on are worrying to an investor.
Things to Make Investors Aware of Regarding Gold IRAs
Like any kind of investment, you will also need to be aware of the limitations of this kind of investment. These are not necessarily cons, just differences between this kind of investment and other investment types. Being able to make investors aware of the unique limitations of this kind of investment can help to eliminate surprises down the road.
Gold Bullion Doesn’t Pay Interest
Gold does not pay returns in a way that makes the tax-free growth aspect of the IRA really attractive, but this comes back around when you sell the gold. Investors will get a break on the capital gains from selling gold that would not be possible when working with sales from another kind of IRA.
Higher Fees
There can be higher fees related to gold investing due to paying someone to buy, ship, and transport precious metals. Custodial fees will be higher with this kind of IRA, but it is likely not the only IRA that this client will have, so this will all balance out.
Funding Restrictions
You cannot move more precious metals into your Gold IRA if you already own some. Combining these assets is not allowed. You also cannot buy precious metals and send them to your IRA. A custodian has to do this work for you. However, that is what you pay the custodian for, so that is not really a problem when it comes down to it. It can actually make investing in your IRA much easier since someone else will take care of all of the legwork.
Gold IRAs Are Great for Retirement Planning
These IRAs are really ideal for those looking to plan for retirement. Gold is very stable, and it offers a great balance against other kinds of stocks. This is why most investment managers will recommend having about 5-10% of a portfolio in gold. Precious metals can be central to a well-balanced stock portfolio, and for those looking to be secure in their later years, this is a critical piece of the puzzle.
While most people are not aware of the benefits of a Gold IRA, it is easy to show them just how well this kind of investment can perform for them over time. Being able to get precious metals into any portfolio offers it security that you would not otherwise be able to benefit from. This is one of the best ways to make sure that client portfolios are founded on the right, stable basis and that they will stand the test of time even when other investments are not performing as well as they should.
Gold IRAs Are a Smart Investment
Being able to help people to build the secure and well-rounded retirement that they have been looking for is rewarding, and it often includes adding precious metals to the portfolio. Most investors are not aware of the benefits and stability of Gold IRAs, and you will find that mentioning this to those looking to invest in a secure way might cause some confusion or consternation. Once you explain the benefits of this kind of investing, however, it becomes clear just how valuable this kind of IRA can be.
Gold and other precious metals have always offered stable value, and long-term investments that are backed by these kinds of items are a key part of stable investment portfolios. There are many ways to add these kinds of assets to investment planning, and encouraging this kind of asset is easy when you can clearly show its benefits.
