Should You Invest in Gold for Retirement?
You will see several commercials on TV and social media declaring gold as a great investment. Yes, a part of that is true. Gold can be a beneficial investment for your young age when you’re looking to diversify your investment portfolio. However, if you are building a portfolio for your retirement age, there are several pros and cons of gold investment.
Here’s all you need to know:
of Gold Investment for Retirement
Advantages that make good reasons for investing in gold for retirement:
1. Gold hedges against a crisis
When the global economy is down, the price of gold usually increases. If you can foresee a financial crisis in the coming years, gold can be a good investment. As the price hikes, you will be able to turn your gold into cash.
However, this seems like a good idea if you have had experience with investing.
2. It helps in fulfilling old age responsibilities
There might still be some debt or loan to pay even when you reach your retirement age. With no source of income, it will be difficult for you to make those payments. Even though gold prices do not increase quickly, but in years, they do.
Gold investment can help you a lot in older age to fulfill your financial responsibilities.
Disadvantages of Gold Investment for Retirement
However, there are some drawbacks to investing in gold for your retirement. These include:
1. It does not offer any interest or dividends
Other than the price increase, gold remains as you buy it. It does not produce any interest or dividends to pay a larger ROI after years.
In retirement age, you need to have an investment that acts as your source of income. Or else, it should be something that goes higher in value so that you can sell it in later years and use the money for consumption. Gold is not the kind of investment that does either of these things for you.
For retirement, it is better to invest in commodities and resources that put no stop to your basic consumption.
2. You will probably not be bartering gold for basic needs anytime soon
Moving into the future, there are little to no chances we adopt bartering practices of the past. In retirement or during the time of crisis, you will surely not be exchanging gold for eggs and bread.
Even though stockpiling gold offers financial security during a crisis, it does not provide proper resources for basic needs. Have you invested in solar panels, chicken or oil, your basic needs can be taken care of well.
Gold provides financial security, but as an investment for an average retiree, it can be quite risky. As gold is a volatile asset, it might not turn out to be a wise investment. Investing a percentage of your portfolio in gold is fine, but if your major assets are present in the form of gold, consider another investment option for your future.