Is There a “Right Amount” To Invest In A Gold IRA?

How much should you invest in a Gold IRA?

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As the 2020s economy worsens, millions of working people of all ages want to put at least some of their money into a "gold IRA." Self-directed Individual Retirement Accounts/Arrangements go by many names, including gold IRAs, precious metals IRAs, and SDIRAs.

Whatever you call them, they are the only legal way to put tangible precious metals into an IRS-approved retirement account. For many people, especially those who are trying to protect their long-term financial solvency by acquiring precious metals, SDIRAs make good sense.

But, the more specific question is: "Is there some exact amount of gold a person should put into a gold IRA?" What's the answer?

Consider the most crucial points before arriving at the "magic" amount most suitable for your particular situation. Here are some things to consider:

  • How many years do you have before retiring?
  • What kind of lifestyle do you want to support after you stop working?
  • Have you researched the historical prices of all four precious metals to have an idea of which ones you want in the gold IRA?
  • Do you currently have a funded IRA, 401(k), or any other type of retirement plan set up?
  • How much can you afford to set aside for retirement each month/year?

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Do Your 'Due Diligence'

Once you can answer all or most of those questions, it will be much easier to know your "right amount" for a precious metals SDIRA. Take the time to do some soul-searching.

Check out the historical prices of gold, silver, platinum, and palladium online. If you currently have an employer-based retirement plan, like a typical company-sponsored 401(k), check with the plan's administrator and make sure it is legally eligible for a rollover directly into a gold IRA.

Don't worry; almost employer-sponsored retirement plans are eligible, but it's essential to ask and verify those facts before switching some or all of the funds into a gold IRA.

Is There a "Right Amount" To Invest In A Gold IRA?

Steps to Calculate How Much Money to Put In Your Gold IRA

Go through the following set of questions and steps to gain some clarity about what is the right amount of funding for a new gold IRA.

  • Assess your current IRA situation. Calculate precisely how much money you have set aside for retirement.
  • Determine the monthly or annual amount you put aside each year. In other words, how much are you adding to one or more retirement funds regularly?
  • Do you worry about the economy getting worse?
  • How much will you earn each year between now and retirement?
  • Do you want protection against inflation and political instability?
  • How much faith do you have in the stock market?
step 1

Based on your answers to the above questions, begin with creating a gold IRA that holds AT LEAST 10% of your total, current retirement money. That entails rolling over funds from current plans into a new gold IRA. The process is relatively simple, and many reputable precious metals companies can facilitate the process.

step 2

Again, based on your faith in the stock market, the economy, and how much protection you want against inflation, increase the amount from 10%, perhaps to 25%, 50%, or 100%. Note that many current and soon-to-be retirees opt to hold all their retirement assets in a gold IRA.

step 3

Continue making regular contributions to your retirement accounts. But, after setting up a gold IRA, be sure to split the contributions between the two accounts, the traditional IRA and the gold IRA, in whatever percentage you feel is appropriate.

step 4

Make the major decision regarding the division of retirement money between standard and gold IRAs. Choose a precious metals investment company specializing in helping people roll over existing IRAs or setting up brand new accounts and funding them with gold, silver, platinum, or palladium.

step 5

Each year, reassess your opinion about the economy, the state of inflation, and other factors that might cause you to increase the percentage of IRA donations to a gold-backed account. For example, some folks start by setting up a gold IRA that holds 10% of their total savings but later up the percentage to a higher amount if they judge the economy or stock market as deteriorating.

Is There a "Right Amount" To Invest In A Gold IRA?

The "Shortcut" Method

If you want to "cut to the chase," set up a gold IRA right away, before inflation rises or the stock market dives further, try the streamlined technique. There are a couple of variations but just one primary approach:

Shortcut to Setting Up a Gold IRA

Contact one of the top precious metals online investment companies. Make sure the one you choose can do a rollover if you need to move money from an existing account into your new one.

Depending on your comfort level with the current economy, political situation, inflation, and stock market, select one of the following percentages: 10%, 25%, 50%, 75%, or 100%. Use that amount to allocate between traditional and gold IRA amounts, using the chosen percentage as the number assigned to the gold IRA.

Easy example: Assume you have an IRA at your local bank with $100,000 but decide to roll over some of it to a precious metals IRA. You choose a company to work with, contact their rep over the phone, and say, "I want to roll over X% (whatever amount you have chosen) from my current IRA to a gold SDIRA with your company."

The specialists who work for precious metals investment firms can get all the paperwork, transferring, and new account setup done quickly.

Final Point To Remember: Keep in mind that having two or more IRAs is legal as long as you don't exceed the annual contribution limits set forth by the IRS. However, when rolling over, you can move funds as long as they go from one IRA to another.

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