How Seniors Can Invest In Gold For Retirement?

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  • Post last modified:December 1, 2021

Retirement has always been a heavy topic, especially for those nearing this stage of life. After all, it’s your last chance to enjoy life after working for so long.

But not all seniors get to have a comfortable retirement due to insufficient benefits and the lack of a retirement plan.

On that note, every senior must have a solid retirement plan to save and earn money. And as far as investments are concerned, gold is one of the best options to strategize financially.

Why Invest In Gold For Retirement? 

gold IRA

If you search up gold investments on the internet, you’ll find that some people are against it.  However, there are several merits to investing in gold for retirement. Here’s a closer look at some examples:

  • Gold is Highly Liquid

Unlike stocks and bonds, you can get an actual gold bar or coin and hold it physically. Since you possessed gold in its physical form, you can exchange it for goods and services. In other words, it’s highly liquid.

As for other forms of gold, such as stocks, mutual funds, and gold Individual Retirement Accounts (IRA), they are relatively liquid as you can quickly sell the asset, given you have the necessary platform.

To give you an idea of a gold IRA, you might want to look at different investment options like Noble Gold IRA review.

  • Gold Price Tends to Rise

Whenever there’s economic or political instability, the currency’s value often drops.  Gold moves in the opposite direction of the currency. For example, if the value of the dollar drops, gold rises.

This is one of the main reasons why people invest in gold to cut their losses in case the value of paper money drops in the future.

This makes gold an excellent investment choice for anyone, not just seniors.

  • Value of Gold Rarely Goes Down

Volatility refers to how often and how much an asset changes in price. High volatility means the asset changes quite often at huge intervals, while low volatility is the opposite.

Gold belongs to the latter, meaning its price rarely goes up or down. After all, economic or political instability is not a common event.

But more importantly, gold rarely goes down, even if the demand decreases or the value of the dollar increases. Such characteristics are useful for seniors planning their retirement since gold is a safe asset.

  • Production of Gold Has Decreased

If you know a thing or two about economics, you should know how supply and demand affect the price. Supply, in particular, is inversely proportional to price.

When it decreases, the price increases, and vice versa. Fortunately, the production rate of gold mines is currently dwindling, which means the supply is decreasing.

You can expect the value of gold to increase in reaction to this. While the price increase may be slow, the gains pile up considerably by the time seniors need the money.

Given these points, it’s easy to see that gold is a relatively safe investment. Of course, there are also some disadvantages.  Many experts believe gold isn’t the best investment for retirement since it doesn’t generate passive income.

It mainly relies on price appreciation, and you only get to earn money once you actually sell the asset.

However, that’s not a bad thing for seniors nearing retirement, as gold acquires value over time, making it the perfect investment choice.

How Can Anyone Invest in Gold for Their Retirement? 

retirement gold investment

Learn about the three ways you can invest in gold and how to use it as part of your retirement plan.

  • Bullions 

The term ‘bullion’ refers to the physical form of precious metals such as silver and gold. In the case of gold, bullion would indicate gold bars and coins.

The main advantage of bullions is that you can get the funds anytime, in short, it’s highly liquid. For example, if you want to buy a pair of shoes, you can sell a gold bar and get your money right away.

Unlike other forms of gold, like stocks and futures, you’ll have to sign the paperwork first and go through a process to withdraw the asset.

It’s particularly beneficial for seniors since you don’t know when the need for money will arise.

With this option, you’ll have to think about how to store the asset. You generally have three choices in this scenario. which include:

  • Sending the gold to a depository and paying a storage fee
  • Leaving the gold at the hands of the dealer
  • Setting up your own safe

Each option has pros and cons, so choose carefully. And if you want to buy physical gold, you can do it by looking for a reputable gold retailer.

It’s also possible to get gold bars by bidding on digital marketplaces, eCommerce platforms, and auction websites. But be diligent to avoid getting scammed.

  • Stocks 

Yes, there are also gold stocks, and it’s the most popular choice for investors who are into the stock market but note that anyone can invest in gold stocks, even seniors.

Since gold stocks mimic the price movement in the stock market and not the price movement of gold itself, gold stocks still do well, even on rare occasions when gold drops in price.

However, it’s worth noting that not all gold stocks have this characteristic, and it largely depends on which company or dealer you choose to invest in.

Unfortunately, since gold stocks are practically the same as any other stocks, it’s not advisable to invest in them if your main goal is to diversify your investment portfolio, as you’ll have to invest in actual gold to do so.

Nevertheless, since seniors invest mainly to earn money, the downside of gold stocks is not a big deal, and its advantage is far too good.

The process of investing in gold stocks is similar to how you would invest in regular stocks.  Find a reputable company or a stockbroker.

You must first do your research before making an investment to avoid capital losses. For a more in-depth guide for buying gold stocks for retirement, you can follow these steps:

  1. Select an online stockbroker
  2. Choose which gold stocks to invest in (e.g., GOLD, BHP, FNV, etc.)
  3. Decide how many shares to buy
  4. Figure out the stock order type
  5. Send the order through the platform
  6. Wait for a confirmation

With these steps, you can buy gold stocks, given you have the necessary funds.

  • Individual Retirement Account (IRA) 

If you’re looking for investment strategies, you may have heard of the term Individual Retirement Account or IRA.

An IRA is a form of retirement plan provided by financial institutions to help seniors by giving them tax advantages, tax reduction, or even exemption.

So, rather than paying up to 20% of your capital gains as tax, you only pay a fraction of it, resulting to bigger profits. Since gold IRAs belong to this investment category, you can enjoy the same benefits as you would in a regular IRA.

That’s what makes gold IRAs the best investment choice for seniors and retirees.

Opening a gold IRA isn’t different from opening an IRA account. You need to choose a reputable company, and you should be all good.

Here are some pointers when choosing a company to open a gold IRA:

  • Make sure the company isn’t hiding any fees. They should be transparent about the costs.
  • Find a company with strict requirements. These companies tend to have a secure database.
  • Research the track record of the company.
  • Choose a company with flexible terms and is willing to negotiate.

Investing In Gold For Retirement Best Practices

Just like most assets, gold can cause you to either lose money or earn money. Naturally, you’d want for the latter to happen, but for that, a fool-proof strategy is necessary.

If you’ve yet to develop a gold investment strategy, here are some tips to go by:

Look at Trends in the Value of the US Dollar

It’s a well-established fact that the price of gold is inversely proportional to the value of the US dollar (USD). To further clarify, when the USD price drops, gold prices soar, and vice versa.

Therefore, it’s a good idea to look at the trends in USD price before investing in gold. Ideally, you’d want to invest when the value of the US dollar is sky-high since it’s most likely to go down afterward.

Keep Track of the Demand for Jewelry

Unlike the USD price, the demand for jewelry is directly related to the value of gold. When demand for jewelry rises, the gold price soars.

Hence, if you want to invest in gold, the best time would be when the demand for jewelry is relatively low since that’s when gold prices will be at their lowest.

Final Words 

While it does have merits, gold investments do not suit everyone. For example, seniors with existing medical conditions and requires medication, and healthcare may need a steady and passive income.

Hence,  gold may not be the best option because of its waiting period. In short, gold is not for everyone.

What may work for others may not work for you, so take your time contemplating this decision.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.