Retirement professionals may have different opinions on how much gold should be included in a retirement portfolio. Generally, it is recommended to have between 5% and 20% of your portfolio in gold. However, gold is not always the best investment for retirement, as it is volatile and can experience large price drops. If you are still interested in investing in gold, there are several ways to do so.
You can invest in funds that own gold, buy physical gold, or transfer your 401(k) to a self-directed IRA and invest directly in gold bars and coins. ETFs are also an option, as they allow investors to invest in shares of a fund that contains real gold bars. When investing in physical gold, it is important to keep in mind that most 401(k) retirement plans do not allow direct ownership of physical gold or gold derivatives. Additionally, buying physical gold often involves high selling costs and carries the risk of relying on the retailer to sell pure gold.
Gold IRAs are another option for those looking to invest in gold. A Gold IRA is a self-directed individual retirement account that invests in both physical gold and other precious metals. By investing in both gold and paper assets, any losses on the gold side will be offset by the gains experienced by other assets. Gold prices often move in the opposite direction to the dollar, so if the greenback weakens, gold is likely to strengthen.
If you are looking to keep physical gold in your portfolio, self-directed IRAs allow this type of investment. Additionally, investors can review the descriptions of funds provided under their 401(k) plans to find mutual funds that offer significant exposure to gold by holding shares of companies engaged in the gold mining industry.