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A Golden Layer of Diversity: Adding Gold to Your Retirement Plan | Financial Planning Tips

A Golden Layer of Diversity: Adding Gold to Your Retirement Plan

No matter your age, retirement is something that you will have to think about at some point. Planning your retirement as soon as possible is a much better option than waiting until your last ten years of employment, though, and if you start now you can have yourself set up with a nice little nest egg when you are ready to take on this exciting new chapter of your life. Typically, folks will choose options like a 401k or a Roth IRA as part of their retirement plan, but another great retirement hedge is to invest in gold.

Gold as a Long Term Retirement Investment

When thinking about investing in gold, and investing in general, we have to think long term. For retirement planning, we are already doing this with our 401K’s and IRA’s. Therefore, it is not a great leap to carry this way of thinking into gold investing. Essentially, the idea is to buy gold now and sit on until your retirement.

Is the Gold Spot Price Too High?

Many folks putting together their retirement portfolio skip gold due to its high spot price. Others do not trust it because of recent price drops. The thing to keep in mind, though, is that gold has a very long history of overall price stability, and if you are using it as a retirement hedge then should your 401k or IRA fail you will have a fairly stable hedge to keep you above water. Many believe that gold is volatile in price, but I argue that this is a response to the volatile nature of fiat money and monetary policy, not the nature of gold itself.

There are ways to get into gold that do not require you to break the bank either. One thing many find helpful is to work with a gold investing guide with step by step methods to buying gold for less. Some ways to do this are through buying old gold jewelry, and old gold coins. You can also invest in smaller mining companies that have not yet become too expensive to buy stock in. If you like your Roth IRA, you could see about converting it to a Gold IRA, or just starting one as a second IRA in your portfolio.

Securing Your Future with a Diverse Portfolio

In short, adding gold to your retirement portfolio adds a nice element of diversity and helps hedge against problems with your other retirement packages in the future. By not placing all your eggs in one basket, you set yourself up for increased security, as well as a higher potential payout when you retire.

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