If you’re thinking about starting a gold IRA, or rolling over your current IRA into one (Gold IRA Rollover), you’re making a smart move. Gold has been one of the most stable assets since ancient times and is considered the “universal currency” by many.

 

The best thing about gold is that in addition to maintaining a steady value normally, it tends to increase in value substantially during times of economic upheaval.

 

During our most recent recession which started in 2008 the price of gold skyrocketed. Those who wisely invested in it profited while those who invested in financial assets (currency, stocks, bonds, etc.) struggled; many of whom lost their entire life savings.

 

A Radical Shift is happening in the way people are investing

 

After faithfully contributing to their 401(k) retirement plans or IRAs for many years, many informed investors are beginning to limit contributions to only take advantage of the full company match and use the residual cash to purchase wealth insurance in the form of physical gold and silver.

 

Some are even concluding that the risk of a US Dollar Collapse was significantly greater than the added benefit they were getting from their company’s 401(k) match, so they are ceasing to contribute entirely. All of their nest egg contributions are going towards the purchase of precious metals.

 

Is that radical? Absolutely.

 

In a properly functioning financial world, people would never make such a move. However, times have changed. The Fed’s reckless monetary policies have created a financial system so badly distorted that conventional wisdom regarding strategic management of personal finances has been turned upside down.

 

If you thought the risk of a US dollar collapse occurring before you reached retirement age was only, say, 50% or less — then you should still be contributing to your 401(k) plan to at least catch the company match. However, that’s not the case anymore; we believe the probability a dollar collapse before the end of this decade is now closer to 95%. Again, that’s our assessment. You must draw your own conclusions.

 

Buying Wealth Insurance

 

So, how much physical gold and silver is required to protect the hard-earned wealth that’s locked-up in your 401(k) retirement plan or IRA?

 

In his new book The Death of Money, author James Rickards notes that:

 

A useful way to think about (precious metal’s) insurance function is that a 500% return on 20% of a portfolio provides a 100% portfolio hedge.

 

If James is correct — and I believe he is — it means that you can fully protect the wealth that’s currently locked in your 401(k) plan by keeping precious metals in your possession equivalent to 20% of your total nest egg. Here’s a slightly over-simplified example:

 

Let’s say you have a $50,000 nest egg: $40,000 in your 401(k) and $10,000 in physical gold and/or silver. In this case, $10,000 in precious metals represents 20% of your total savings.

 

Now let’s say the dollar collapses and its value essentially falls to zero. If that happens, worst-case, the $40,000 in your 401(k)

would be: $40,000 x 0 = $0

 

Rickards (and many others) estimate that if the dollar tanks, the value of precious metals in your possession will increase five times (500%). I think that’s extremely conservative — but let’s stick with the conventional wisdom of five times. If that’s true, then the $10,000 held in precious metals would now be worth:

$10,000 x 5 = $50,000

 

Do you see what happened? Although your 401(k) was completely wiped out, the post-collapse value of your physical gold (and/or silver) soared to $50,000! In other words, the dollar became worthless, but the purchasing power of your nest egg remained unchanged.

 

.. and that is how a portfolio protected with precious metals acts as Wealth Insurance.

 

 

HOW TO BUY GOLD BARS for your RETIREMENT PORTFOLIO:

Click on the Gold Bars below to find out ==>