Between stock market volatility, bank failures, and geopolitical conflicts, American retirees have every right to be worried about the safety of their investments in 2023. If recent history has proven anything, it’s that the economic climate can change at the drop of a dime! Unless properly diversified and protected with hard assets like gold and silver, your IRA, 401k or other retirement plan could suffer losses in a situation where paper markets take a nosedive.
Best Rated Gold IRA Companies in 2023:
Noble Gold Investments (Best overall gold IRA company. $5,000 minimum) (read full review)
Augusta Precious Metals (Best company for high-net-worth. $50,000 minimum.)
Silver Gold Bull (Best company for gold bars. Unknown minimum.)
It’s no surprise, then, that gold is in high demand—more specifically, physical gold bullion. This near-indestructible precious metal has inherent qualities that give it important industrial applications, making it a valuable investment asset and store of wealth.
Since ancient times, gold has been used throughout the world as a safe haven asset and medium of exchange. However, it’s never been more valuable than it is today. Trading at over $2,000 per ounce, the yellow metal is currently being hoarded the world over by individual investors and sovereign states in order to protect their wealth.
Should you join them? In this article, we’ll discuss why investors might want to invest in gold through a retirement account such as an IRA, 401(k), TSP, or another tax-advantaged plan. This way, you can decide for yourself whether gold investing for retirement is right for you.
Your First Step: How to open and fund your Gold IRA?
We’ll get into the details in a moment but, for now, the key takeaway is that physical gold bullion or coins are not available in regular brokerage IRAs or 401(k) plans.
That means your Charles Schwab, Fidelity or Vanguard IRA won’t work, and neither will your employer-sponsored 401(k). These accounts aren’t allowed to include physical gold and silver assets.
Instead, you need to open a new self-directed gold IRA (Roth or Traditional) through a specialized account provider. These gold IRA companies will help you through all the steps of opening your account, funding it, and choosing your metals.
When it comes to funding your new gold IRA, the IRS allows you to transfer or rollover funds from your old IRA or 401(k) to a new self-directed IRA without incurring any charges or tax penalties. You can also send a cash contribution directly from your bank to a new SDIRA without transferring funds from a pre-existing IRA or 401(k).
Once you’ve rolled over funds into a Gold IRA, which is a special type of self-directed IRA, you’re free to invest in essentially any type of IRS-approved precious metal, and that includes a large variety of gold and silver bullion coins and bars.
Your Second Step: How Much to Invest?
Once you’ve decided whether to invest in physical gold bullion through an IRA, the question then arises: how much of your savings should you allocate to gold?
Investment professionals call this your asset allocation strategy, and there is no general consensus regarding what an optimal allocation looks like.
Ultimately, this is your own decision and it’s probably a conversation you need to have with your financial advisor.
For example, “gold bug” investors who are optimistic about the fundamentals of gold, such as Ray Dalio, advocate for 5 to 10 percent of one’s savings to be held in gold. This may be the optimal strategy for some risk-conscious investors, but again you shouldn’t take any of this as financial advice. Always speak with your financial advisor before making any investment decision.
Many investors find that a 5 to 25 percent allocation in gold functions well as an “all-weather” investment strategy—that is, it helps mitigate downside risks while also allowing significant room for growth assets like stocks and ETFs in one’s portfolio.
Ray Dalio - Founder of Bridgewater Associates: In his book “Principles”, Dalio suggests that investors should consider allocating 5-10% of their portfolio to gold.
Paul Tudor Jones - Founder of Tudor Investment Corporation: Jones has stated in interviews that he believes investors should have a 5% allocation to gold.
Jim Rickards - Economic advisor and author: Rickards recommends a 10% allocation to gold in his book “The New Case for Gold”.
Robert Kiyosaki - Author and investor: Kiyosaki has recommended a 25% allocation to gold in his book “Rich Dad’s Advisors: Guide to Investing In Gold and Silver”.
David Rosenberg - Economist and strategist: Rosenberg has suggested in interviews that investors should consider a 20% allocation to gold.
Ray Dalio’s famous “All Weather” portfolio is displayed above (Image 1). This is an updated version that is specific to the market conditions in 2023. Note that this is a conservative portfolio designed to minimize risk while also allowing for upside growth potential. The main hedges against market volatility and systemic risks are gold (7.5%) and long-term bonds (40%).
Ultimately, how much you invest should depend on your individual goals, risk tolerance, and personal financial situation. We recommend speaking to your financial planner or advisor before making any investment decision, including the decision to invest in gold.
Investing in Gold for Your Retirement: Know the IRS Rules
Uncle Sam doesn’t always make it easy to invest in gold through an IRA or 401(k). Before investing in gold, familiarize yourself with the important rules and regulations that govern gold retirement investing. Failing to do so may trigger a taxable event or incur costly penalties.
Gold IRA Rollovers vs. Transfers vs. Cash Contributions
If you’re opening a new SDIRA in order to invest in gold, you can rollover or transfer your existing retirement account funding (whether IRA, 401k, TSP, etc.) into your new SDIRA.
These are two separate processes that need to be considered by each investor. The primary differences between rollovers and transfers are described below:
Rollovers: A gold IRA rollover is an indirect method for moving funds between accounts in which the outgoing funds are first sent to the account holder, which the account holder later manually deposits into the new SDIRA.
Transfers: A gold IRA transfer is a direct method for moving funds between accounts whereby the old account custodian sends the funds directly to the new designated account custodian, who then deposits the funding into the new account. This process requires less input and personal involvement on the part of the account holder.
Cash Contribution: A direct payment in the form of cash, check, or ACH from a savings or checking account directly to the new SDIRA.
Neither funding option is necessarily better than the other. Ultimately, I prefer transfers because they have fewer points of failure and it’s totally hands-off for the account holder—so I can’t accidentally mess it up!
If you opt for a rollover, you have a maximum of 60 days to deposit the withdrawn funds from your original IRA/401(k) account into the SDIRA before triggering a taxable event (transfers don’t have this requirement).
Note that all the normal rules for IRAs, including the annual contribution limits (i.e., $7,500 for those over the age of 50) and tax-free withdrawal age (59.5 years) remain the same between IRA and SDIRA accounts. Furthermore, a minimum gold bullion purity of 99.5% is required for any physical gold assets stored within an IRA.
Want to learn more about rollovers? Check out this handy guide to gold IRA rollovers that covers all aspects of the process.
Is gold a good hedge against the dollar and market uncertainty?
Gold has always been valuable. At no point in recorded history has gold lost its value nor has its spot price significantly crashed overnight.
The resiliency of gold has given it a reputation as a safe store of value relative to riskier assets such as equities and mutual funds. This is especially true for retirement investors who want to diversify their portfolio with “hedge” assets that can help mitigate the risks of market cycles, recessions, and counterparties.
Take, for example, the historical price growth of gold. Below, we’ve provided a chart (Image 2) that depicts the ascending value of gold over time.
What does this chart indicate?
It indicates that, throughout modern history, the price of gold has never gone to zero, and that its value has consistently risen since the early 19th century.
As seen below (Image 3), last year’s aggregate gold demand was almost on par with 2013′s record-breaking year by nearly reaching 5,000 tonnes. And as consumer electronics demand increases in our post-pandemic economy, many observers speculate that we’ll continue to see strong gold demand growth in the year ahead.
While the fundamentals support a likely increase in gold demand, it’s also important to note that gold is not correlated with other conventional assets. One of the reasons why gold is so sought after is because the performance of the stock market or U.S. dollar, for example, aren’t indicative of how the gold market is going to perform.
In other words, investing in gold can help spread out the risk in your portfolio. If the stock market or housing markets go down, the gold market might excel. This is exactly what happened during the 2007-2009 global financial crisis, when the price of gold increased by about 50%.
During times of market instability, recessions, and bank runs, the price of gold has historically performed well—often finishing well in the green when other asset markets are seeing red.
Just look at how the price of gold has performed during some of the most recent economic downturns:
Black Monday 1987: +4.2%
Iraq-Kuwait War 1990: +11.1%
Dot Com Crash (2000-02): +18%
Financial Crisis: +78.9%
Coronavirus Crash (2020): +7.6%
To capture some of the appreciation potentials of gold during times of crisis, it may interest retirement investors to diversify some of their holdings in physical gold. That way, stock losses during economic crises can be offset by relatively strong performance in the gold market.
Central Banks Are Buying Gold at Record Levels
Rising global interest in gold saw the average spot price of the yellow hit break all-time records in 2022 with a year-long average price of about US$1,800 per ounce.
But retail investors aren’t the only ones buying up gold at a blistering rate. Central banks around the world have stocked up on the precious metals at an unprecedented pace. Total central bank gold buying in 2022 amounted to about 1,136 tons, more than any other year on record.
Image 3: Global central bank gold reserves from 1974 to present. (Source: World Gold Council).
Some analysts speculate that China could be buying more than they claim on their books—a lot more. In fact, one industry expert thinks that Beijing may have hoarded up to 30,000 tons. However, revealing such a massive gold buying spree would devalue the Chinese yuan relative to the U.S. dollar, something that, of course, is counter to Chinese state interests.
Which countries were the top state buyers of gold between 1999 and 2021? Let’s take a look at the list below:
Russian Federation: 1,888 tons
People’s Republic of China: 1,552 tons
Turkey: 541 tons
India: 395 tons
Kazakhstan: 345 tons
In 2023, central banks—particularly central banks of countries that have a financial or strategic interest in dedollarization—have only continued splurging on gold. In fact, the first quarter of 2023 has global central banks on pace to break their 2022 record. In other words, the world’s top state economists and monetary policymakers are bullish on gold.
Since 2010, central banks have been net buyers of gold as opposed to sellers. This is generally seen as a risk management move, allowing policymakers to promote economic stability during downturns and mitigate risks associated with holding fiat currencies in reserve.
While their motivations for buying gold are mostly clear, there may be something that central bankers know about the yellow metal that we don’t. Savvy investors should keep this in mind as the gold market tightens in the months ahead.
Our Top-Ranked Gold IRA Companies in 2023
Some of the gold IRA companies that stand out for their great reviews are:
1. Noble Gold Investments (Best overall gold IRA company)
Minimum investment: $5,000
BBB Rating: A+
Highlights: Some of the lowest fees/premiums above spot price for bullion products. Focus on education. Exclusive Texas storage. No-quibble buyback policy. (read full review)
2. Augusta Precious Metals (Best company for high-net-worth)
Minimum investment: $50,000
BBB Rating: A+
Highlights: White-glove service for large investors. Harvard-trained Economist on Staff. No-commission sales floor. Separate compliance department. NFL’s Joe Montana is both a client and ambassador.
3. Silver Gold Bull (Best company for gold bars.)
Minimum investment: $5,000
BBB Rating: A+
Highlights: Canadian company with Nevada office. Specializes in low-cost bullion bars. One of the largest gold retailers in the world. Over 3 billion dollars in transactions.
There are a large number of qualified gold IRA providers that offer secure and responsive gold IRA services to investors. However, we recommend Texas-based Noble Gold.
Why Noble Gold? Although they’re a relatively young company, they have one of the highest customer ratings of any gold IRA companies in America, including a perfect score of “A+” from the Better Business Bureau (BBB). Plus, Noble Gold has low premiums, flat rate storage fees, and the lowest minimum investment minimum of only $2,000. (As opposed to Augusta who has a $50,000 minimum and caters to HNW investors)
Want to sell your gold back at market prices? Noble Gold can take care of that for you with their “No Quibble” buyback policy. Simply pick up the phone and tell them that you want to sell your gold back to them at market prices whenever you want.
Want to learn more? Request your free guide.
If you want to learn more about opening an account with Noble Gold, our top-ranked gold IRA company in 2023, you can request a free, no-obligation investment kit today. This kit contains all the information you need about how to get started. Alternatively, you can call them directly at 626-605-3152. There’s also a full review of Noble Gold Investments you can read on this page.
(Note: Like any other investment, gold carries a certain level of risk. Remember that past performance is not indicative of future results. Always speak to your financial advisor before making any investment decision.)
Written by: Andrei Polgar, PhD. Andrei teaches people economics via books like The Age of Anomaly (Wall Street Journal & USA Today bestseller) and YouTube animations on his channel, One Minute Economics. You can learn more about Andrei on his Wikipedia profile page, his Amazon author page, or his LinkedIn profile.
Reviewed by: Liam Hunt, MA. Liam is a financial writer and analyst covering global finance, commodities, and millennial investing. His coverage has been featured in publications such as the New York Post, Forbes, and Barron’s. You can learn more about him on his LinkedIn profile.