Hey everyone, and welcome back for another deep
dive. Today we're going exploring the world of
gold IRAs. Yeah, gold IRAs. We've got some really
great material here that breaks down the different
types and advantages, potential drawbacks, really
kind of all the ins and outs of the different
ways that you can use this to invest in your
future. So our mission, if you will, in this
deep dive is to help you understand the difference.
between these different types. We've got traditional
gold IRAs, Roth gold IRAs, and SEP gold IRAs.
And so hopefully by the end of this, you'll be
able to see which one of those might be the best
fit for your own personal financial goals. So
let's start with traditional gold IRAs. What
is the core idea behind this type of IRA? Well
the main thing with a traditional gold IRA is
that you're contributing pre -tax dollars. And
this can actually reduce your taxable income
for the current year. Oh, interesting. It's kind
of like a little immediate tax break. OK, so
if I'm looking at my taxes for this year, and
I decided to put some money into a traditional
gold IRA, that could actually lower the amount.
Exactly. Exactly. So that's one of the big benefits.
And then the second key piece is that any growth
within the account, any appreciation in the value
of the gold is tax deferred. You don't have to
pay taxes on those gains until you actually withdraw
the money in retirement. Oh, wow. Yeah, so think
about that. You would have decades of growth
compounding without being chipped away by those
annual taxes. Yeah, so it just keeps growing
and growing and growing. That's right. And then
finally, when you hit retirement, then you pay
taxes on it. Exactly. OK, so that sounds like
that could really add up, especially if you're
investing for the long term. It really can. Yeah,
your money has more room to grow. because you're
not constantly paying those taxes on the gains
as they happen. Exactly. And this is something
that's particularly appealing for folks who think
they might be in a lower tax bracket when they
retire. Oh, okay. So all that tax -deferred growth
could become a really significant nest egg, and
then when you finally withdraw it, you're being
taxed at a lower rate. Got it. Okay, so the big
takeaway with traditional gold IRAs. is that
you get that immediate benefit of reducing your
taxable income right now. Right. Which is especially
helpful if you're maybe in a higher income bracket
right now. Yeah. If you're making good money
now, then that can be a real advantage. Yeah.
But you got to remember that Uncle Sam's going
to come knocking eventually. You got to. When
you take that money out. That's the trade off.
Pre -tax contributions now. Tax withdrawals later.
Got it. OK. So now let's flip the script and
talk about Roth Gold IRAs. OK. Roth Gold IRAs.
How is it different? So the main difference with
a Roth Gold IRA is that you're contributing money
that you've already paid taxes on. Okay. So I'm
paying taxes on the money before I even put it
in. That's right. It's after tax dollars. So
you don't get that immediate tax break upfront.
Okay. So what's the advantage then? Well, here's
where it gets exciting. With a Roth Gold IRA,
you have the potential for tax -free growth and
even more importantly, tax -free withdrawals
in retirement. Oh, wow. So as long as you meet
certain conditions, when you take that money
out, in retirement, you won't owe any federal
income taxes on it. OK, so that's a huge difference.
It is. Especially if you're thinking about maybe
being in a higher tax bracket later on. Exactly.
OK, so if you're thinking that maybe down the
line, you'll be making more money, A Roth Gold
IRA might be a better option because you'll be
paying those taxes now while you're in a lower
bracket. That's thinking. And then when you withdraw
it later, you won't owe anything. Exactly. It's
all tax -free at that point. Wow. That's pretty
compelling. It is a powerful feature. So to recap
here, with a Roth Gold IRA, you've got those
after -tax contributions and then potentially
tax -free growth and tax -free withdrawals. Tax
-free withdrawals. That's the big one. No required
minimum distributions during your lifetime. Oh
Okay, so you've got a lot more control over when
and how you access your funds. That's right More
flexibility for sure. Okay, so we've talked about
traditional we've talked about Roth Now there's
this other one CEP gold IRAs, right? CEP gold
IRAs and this one seems like it's for a very
specific group of people It is it's designed
specifically for those who are self -employed
or own small businesses Okay, so if I'm working
for a you know, regular company This isn't really
an option for me. That's generally the case,
yeah. But for those who are self -employed, one
of the biggest advantages of a SEP Gold IRA is
its significantly higher contribution limits.
OK, so we're talking about way more. Much higher.
Than traditional or Roth. Exactly. What kind
of numbers are we talking about here? Well, for
2025, the contribution limit for a SEP IRA is
up to 25 % of your net self -employment income.
OK. Or a maximum of $70 ,000, whichever is less.
OK, so that's That's huge compared to the traditional
and Roth, which were significantly lower. Yeah.
You can put away a lot more with a SEP if you're
eligible. Yeah. OK. So that really highlights
the potential for just accelerated savings. Right.
You can supercharge your retirement savings with
a SEP. If you're eligible. Exactly. OK. And then
similar to a traditional IRA. The contributions
you make to a SEP Gold IRA are also tax deductible.
That's right. So you get that upfront tax benefit.
Plus, the money in the account grows tax deferred
until retirement, just like the other types.
Got it. OK. So for those of you out there who
are self -employed or running a small business,
a SEP Gold IRA really gives you the opportunity
to sock away. a lot more for retirement. It really
does. And get that tax break too. You get the
best of both worlds. Yeah. Okay. So let's just
do a quick side -by -side comparison of the contribution
limit. Okay. Good idea. Just so everybody's clear
on what we're talking about here. So for traditional
and Roth IRAs, the combined annual limit for
2025 is $7 ,000 if you're under 50. Yeah. And
then it increases to $8 ,000 if you're 50 or
older. That's the catch -up contribution for
those nearing retirement. And then you've got
the SEP IRA. With you know, yeah a much higher
limit. Yeah a lot more generous up to 25 % of
your compensation or $70 ,000 whichever is less.
Okay, so it's really important to think about
those limits when you're trying to figure out
Which IRA might be the best for you? Absolutely.
All right So we've talked about the three different
types of gold IRAs But let's step back for a
second and talk about why you might want to even
consider goals in the first place Right. That's
a good point. Why gold at all? Yeah, so Regardless
of which IRA structure you choose, what are the
benefits of actually having gold as part of your
retirement portfolio? That's a great question.
And there are several potential benefits to consider.
One of the big ones is that historically, gold
has acted as a really reliable store of value.
OK, so we hear that phrase a lot, store of value.
But what does that actually mean in practical
terms? So in practical terms, it means that gold
tends to hold its value. Even when other assets
like stocks and bonds are fluctuating a lot.
Okay, so it can provide a hedge against market
volatility Okay, so it's like a kind of stabilizer.
That's a good way to put it in my portfolio Okay,
so for example during the 2008 financial crisis.
Oh, yeah, the stock market really tanked But
the price of gold actually went up Oh, wow. So
that's a really clear example of how gold can
act as a safe haven during times of economic
uncertainty. So when everything else is going,
gold is going up. Potentially, yeah. OK, so that's
one big benefit. What about inflation? Inflation
is another big one. We always hear about gold
as a way to hedge against inflation. Exactly.
So, you know, inflation erodes the purchasing
power of your money over time. Right. And historically,
gold's value has tended to rise along with the
cost of living. OK. So by including gold in your
IRA, you're potentially protecting your retirement
funds from those damaging effects of inflation.
So as things get more expensive, the value of
the gold should also go up. That's the idea.
OK, and then the final benefit we'll talk about
is diversification. Right. Diversification is
crucial. So you want to spread your investments
across different asset classes. Right. Don't
put all your eggs in one basket. Exactly. And
gold can be a really valuable part of that diversification
strategy. OK, so how so? Well, gold often behaves
differently than other assets like stocks and
bonds. OK. So there are times when gold does
well while stocks and bonds are struggling and
vice versa. OK. So by adding gold, you're potentially
reducing your overall risk and creating a more
stable portfolio. So it's all about balance?
That's it. Okay, so to recap, we've looked at
the three main types of gold IRAs, traditional,
Roth, and SEP. Yep. Can you just walk us through
one more time the key differences? Absolutely.
So traditional gold IRAs, those are pre -tax
contributions, tax -deferred growth, and then
you pay taxes on the withdrawals and retirement.
Roth gold IRAs, you're contributing after -tax
dollars, Potential for tax -free growth and tax
-free withdrawals later on. And then SEP gold
IRAs. Those are for the self -employed and small
business owners. Higher contribution limits and
tax -deductible contributions. Okay, and all
of them offer the potential benefits of gold.
That's right, like hedging against volatility,
protection from inflation and diversification.
Okay, so for our listeners out there who are
thinking about planning for the retirement, and
maybe thinking about gold, what's the one thing
that they should really take away from this conversation?
I think the key takeaway is that you really need
to consider your own personal circumstances and
goals when deciding which gold IRA is right for
you. So think about your current income, your
expected tax bracket in retirement, your risk
tolerance, and then choose the option that aligns
best with your overall financial plan. So really
it's not a one size fits all. Not at all. Everyone's
situation is unique. Yeah. Okay. Well, this has
been a really fascinating look at Gold IRAs.
And I hope our listeners out there found it useful
in their own journey towards, you know, planning
for their retirement. Absolutely. And if you're
interested in learning more about Gold IRAs,
we definitely encourage you to, you know, do
your own research and consult with a financial
advisor. A financial advisor can help tailor
a plan to your specific needs. Yeah, absolutely.
All right, well, thanks for joining us for another
deep dive. Thanks for having me. And we'll see
you next time. See you next time.