How To Invest In Gold For Retirement

How To Invest In Gold For Retirement

When you’re planning for retirement, investing in gold might not be one of the first things you consider, but maybe it should be.

There is a lot of money spent on advertising and commercials to convince us that gold is safe and enduring.  But with so much conflicting information it’s tough to discern whether this is a helpful asset in your retirement portfolio or not. 

If you decide gold is beneficial to help diversify your portfolio, how does one invest in gold for retirement?

There are three main options for investing in gold: buying physical gold, purchasing gold stocks, or using gold as part of an IRA. Each of these options comes with its own advantages and disadvantages to consider, but mainly we’ll be looking at investing in physical gold reserves.

As noted above, the key to a successful retirement savings plan is a portfolio that can weather the good times and the bad, and increases over time at rate above real inflation.

Gold is an important asset but it’s important to understand the ins and outs to efficiently accumulating the asset.  If you’ve never gone through the gold accumulation process, you’ll need to master the basics and learn from the mistakes that I’ve made over the years.

Can You Invest in Gold for Retirement?

Retirement Gift

First, you are not going to overly concentrate your portfolio with just gold or the precious metals that are highly correlated with it.  That will subject your portfolio to extreme volatility, potential losses, and a lot of emotional strain.  However, gold has tremendous potential.

Most people choose to make investments in retirement gold as a supplement to their regular retirement plan.

For example, you’ll have an employer-sponsored retirement savings vehicle like a 401(k) but might invest in some gold in a separate retirement account, this will help off-set value variance.

Alternatively, you can even choose to invest in the best gold IRA through a self-directed IRA by choosing investments in heavy metals, but this process can get complicated.

It’s up to the individual to decide how they want to invest their retirement funds and to ensure that there’s going to be enough when the time comes to stop working completely.

Why Is Gold a Smart Investment Choice?

Although investing in retirement gold might seem like an unusual choice, it actually has a few major benefits to offer.

Owning or investing in gold bullions or coins as part of your retirement plan has become a more popular choice in recent years, especially for younger generations who are looking at a more long-term investment plan.

best way to invest in gold

These are some of the reasons you might choose to invest in this precious metal:

  • Owning something tangible like gold bullion can be rewarding and help you to see exactly where your money is.
  • The overall process of buying and selling gold is relatively easy and can even be done without a broker in some cases.
  • It’s easy to test the content of gold when buying coins so you know immediately how much your investment is worth.
  • Although volatile at times, the rate of gold has gone up over the years and will hopefully continue to be a store of value.

With so many ways to purchase gold and options for how much you can invest, there’s never one approach that is right for everyone.

The best thing to do is speak with a financial advisor or the provider of your retirement plan to see what options and benefits might be possible if you considered adding gold to your investment portfolio.

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How Much Retirement Gold Should You Invest In?

Gold Bullion Barr On A Stocks And Shares Chart

If you’ve made the decision to invest in gold, you’ll need to know exactly what is the right amount to invest.

The answer to this question will depend highly on how well you, as an individual, can deal with volatility.  There is often an inverse correlation between gold and equity assets.  So the more stocks you are carrying in your taxable or retirements, the more gold you’d need to mitigate portfolio fluctuations.

With an investment like this, it’s better to start small and perhaps aim for around 5 percent of your portfolio going towards gold.

To get in early and reap the benefits is far better than waiting for years down the line, as we know from history that the value of these heavy metals can change quickly and dramatically.

Some people have up to 20 percent of their investment portfolio directed at gold, but this is generally the product of accumulating gold with the price dips and building value over time.

For beginners or those wanting to have just a small amount tucked away for retirement, the 5 percent minimum would be a good starting point.

The History of Gold as an Investment

To understand the basics of investing in gold, it’s best to look back at the practice of buying this precious metal for the sake of making money.

The gold market can first be traced back to the Ancient Egyptians around 3000 BC where it was used to make jewelry, leading to sales of this jewelry much later in 560 BC as a form of currency.

Gold was preferred because it could be measured easily and was transferable, so it made trade dealings a lot simpler.

From there, coins that were stamped with seals were the main method of currency and its use began to spread through Europe and eventually the UK.

From there, the UK made their own form of metal currency in 1066 with sterling silver and gold both used.

In 1792, the US government created a bimetallic standard which meant that units of money had equivalent amounts in gold or silver, and this lasted until 1971.

One dollar was worth 24.75 grains of gold for example, and if you had one of these it meant you had that exact amount safely stored away at the bank.

This type of currency was phased out eventually when the Federal Reserve started making notes that could be traded for gold.

By 1934, coins were no longer used as money and no new coins were made.

However, the precious metal still has a lot of worth and is regarded in the global economy, making it a popular investment choice today.

The Price of Gold in the Last Few Decades

Gold Coins Chart

To get an idea of how much a gold investment today might be worth when you retire, we can look back at the last few decades to see how it’s performed when compared to other types of investments.

This can show you what might be a smarter option when trying to diversify your options and also give you an idea of the changes in performance over time and why it matters.

According to the experts at Investopedia, gold has outperformed traditional stocks and bonds when looking at the last 45 years, but when we look at the last 30 years alone stocks and bonds were better performers.

However, to make things even more confusing, in the last 15 years, gold was again the high achiever.

This shows just how volatile the market can be, with a lot of uncertainty about where it’s headed in value.

The amount of gold in the last 30 years has increased by 335 percent which may seem like a lot, but when compared to something like the Dow Jones Industrial Average which has improved 1,255 percent, the number seems quite small.

These differing figures can add even more confusion when determining how much gold to invest in for retirement and whether it’s even a viable option for your investment portfolio.

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What Are the Options for Investing in Gold?

When we think about investing in gold and silver for retirement, most people have an idea about purchasing actual physical gold in the form of coins or bullion.

While this is definitely the most obvious approach, it’s not the only one, and there are three main options you can choose from when looking at retirement gold.

Physical gold

The most obvious choice for retirement gold is buying physical gold like bars, coins, or bullions.

This requires some extra planning for storage and insurance but people like to be able to see their money in the form of something physical.


Investing in resources like gold is a very possible way to diversify a stock portfolio, but there are some intricacies involved that make this a little riskier.

You must be prepared to look at the stocks’ performance regularly and adjust the portfolio to suit.

Gold Backed IRA

There are gold-backed individual retirement accounts that you can invest in, offering unique investment options like this metal.

Alternative investments like this come with more rules, like the Gold IRA only allowing 24-karat bars and bullions to be included, but if you’d prefer not to have physical gold stores this might be a better option.

Are There Risks Investing in Gold for Retirement?

Risk Ahead Road Sign

Any investment comes with a certain degree of risk, but what about gold specifically when we’re thinking about investing for our retirement?

There are specific risks involved with this type of investment, so understanding both the good and bad will ensure you make the right decision where your money is considered.

These are some disadvantages of investing in gold for your retirement:

  • Investing in best gold IRA company coins specifically come with large fees from dealers, and when you calculate these into the costs you may end up losing money over the years rather than making it.
  • Storing physical gold also requires ongoing costs for the storage facility as well as insurance taken to protect the bullions or coins. This can sometimes negatively increase gold prices.
  • Verifying older sources of gold like coins can be hard to do and is better left to professionals, so your options for how to invest are quite small.
  • There’s no real way to tell the future of gold in the global economy and even looking at history it’s hard to determine. Experts can’t even estimate the price appreciation potential which makes it difficult to know what it’ll be worth when you retire.

Questions to Ask Yourself Before Choosing Retirement Gold as An Option

If you’re dealing with a financial advisor regarding your retirement investment options, there’s a good chance they’ll want to know more about your interest in gold.

Before you take that step, you can ask yourself some key questions that will give you an understanding of what’s involved with this investment vehicle and what things could potentially sway your decision either way.

  • Will you be relying on liquidity in your retirement and being able to sell gold quickly if needed?
  • Have you factored in additional costs for storage, security, and insurance, and what are your exact plans for each of them?
  • What else is in your investment portfolio that could offset the serious swings that gold prices have undergone in the past?
  • Are you concerned about global, economic, and political affairs that could have some impact on this type of investment?
  • What else do you have in terms of a retirement savings plan and can you supplement this specific investment with something safer like a 401(k) retirement account?
  • Do you plan on selling the gold eventually when you can get a good price or holding onto it to be passed down through your family?

With these questions in mind, you probably already have some idea why exactly you want to invest in gold for your retirement.

Gold is known as a valuable asset, it can be helpful in protecting against inflation, and it offers diversification that other types of investments can’t.

Although it might not always be predictable, it does have plenty of redeeming qualities that make it an attractive choice for retirement.

Things to Consider Before Buying Gold for Retirement

Happy Retirement Gold Sign

If you’re absolutely set on buying gold for retirement, there are things you’ll have to take into consideration.

Because this type of investment is very different from traditional methods like stocks and bonds, it can be a risk if you don’t know what you’re doing.

Understand these things about gold investments for retirement before you take the final step.

  • Making an investment in gold isn’t just like collecting coins of gold over time. Investment gold is usually purchased from large dealers and this gives you the best chance to liquidate the gold if needed.
  • Owning gold means you’ll also need a vault to store it in, insurance for the gold bullions, and will also have to navigate the physical delivery of your investment. Compared to an investment or money in the bank, this adds a lot more effort.
  • A commonly advertised way to sell gold is buying coins directly from a mint. This can be risky because you need to consider what their actual value is by figuring out the premium over the current rate of gold. If you find the mint coins amount is more than 10 percent difference, this should be avoided.
  • If you need to liquidate gold and plan on going through a dealer, you can expect to lose some money. Choose a coin that’s more popular and easier to get into the market of, like South African Krugerrand gold coins. When you need to liquidate, you’ll spend less doing so and will find it easier to sell.

Related Questions

Gold is the most popular metal to invest in, and one that many people choose to form part of their retirement savings plan.

There are plenty of questions surrounding this type of investment and we’ve answered some of the most common ones to give you a bit more insight into why people choose this specific asset to invest in.

Is Gold A Good Investment for Retirement?

Buying gold jewelry as an investment can be harder to do than purchasing gold bullions or coins, due to its measure of value, but it can still be a worthwhile investment when done correctly.

The value of the jewelry will be determined by the weight and purity of the gold used to make it, and with something valuable, it could serve as an investment piece.

How Do You Buy and Sell Gold?

The easiest way to perform transactions with gold is by using a dedicated gold dealer. These people will have access to more options and can sometimes get a good liquidated price.

Both selling and buying gold should be done with a lot of research to ensure you’re buying genuine stock and that it’s being offered at the best price.

What is the Spot Price of Gold?

This term is used to describe gold that is readily available to buy on the open, international market for immediate delivery.

Dealers and investors use this term as a way to describe the current value of gold and the price is subject to change quite frequently.


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