Month: August 2020

New jobless claims have consistently remained high since March when lockdowns began across the United States. In the time since, those numbers have been decreasing, but while progress has been made, there are still signs of trouble on the horizon.

Dallas Fed President Robert Kaplan recently upped his year-end unemployment projections.

On Monday, August 3, 2020, Kaplan characterized the regrowth of jobs as “more muted” than he had hoped. His original forecast for the year-end unemployment rate was 8%. Now he has upped his this to 9–10%.

A couple of days later, the Labor Department released the latest unemployment rate: 10.2%. If Kaplan’s prediction holds true, then the unemployment rate will barely improve throughout the rest of the year. This fits in with a trend of slowing gains. The 1.8 million jobs added in July were less than the job growth in June and May. ADP’s private payroll growth also slowed its pace in July.

However, problems could be worse than just a sluggish recovery for the unemployment rate.

According to Fox Business, a second wave of layoffs could be coming.

On August 4, Fox Business reported a survey conducted by Cornell University. The survey found that between July 23 and August 1, 31% of workers who were rehired after being initially laid off or furloughed were laid off a second time. Another 26% of rehired workers were informed that they could be laid off again.

The researchers note that most of these layoffs are in “healthy” states in terms of coronavirus cases, indicating that these layoffs are more related to economic conditions and the ending of PPP loans than to the pandemic. If this is true, then it could mean more layoffs are on the horizon. If a new wave of unemployment washes across the United States, it could create further trouble for the economy.

Situations like these highlight the need for a safety net.

I have talked to people who were not prepared for the economic crisis when it hit home back in March. Many of these people learned the hard way that being prepared for financial hardship is a necessity of life. After all, you have insurance for your house, your car, and your health. It makes sense to protect your financial well-being as well.

Historically, precious metals like gold and silver have been recommended by experts as hedges against fiscal disasters. With prices seeing a record-breaking surge, now may be the best time to diversify your portfolio with precious metals.

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When you’re planning for your golden years, there’s one word you want to associate with your future—safe. Which is why you might be wondering, “Are gold IRAs safe?” The term “safe” means something is shielded, sheltered, or guarded. Here, we explain why gold IRAs can be safe from setup, storage, and hedge standpoints.

The Security of Setting Up a Gold IRA

When you set up a gold IRA, it’s done through what’s known as a Self-Directed IRA, a type of IRA that enables you to purchase traditional assets as well as alternative assets like gold, real estate, and tax lien certificates. You can transfer or roll over funds from one of your retirement accounts to a gold IRA, or you can open a new Self-Directed IRA to house physical gold.

Regardless of whether you’re rolling funds over into an existing gold IRA or opening a new gold IRA, an IRS-approved custodian must purchase the gold. Since the IRS must endorse a custodian, you can enjoy peace of mind about the proper handling of your gold transactions.

When you work through U.S. Money Reserve’s Self-Directed Precious Metals IRA program, your IRA Account Executive will coordinate with your custodian to set up your IRA account and, if needed, arrange the transfer of funds from your old custodian to your new custodian.

IRA custodians are by no means “lone rangers.” They are required to follow certain IRS guidelines when holding assets belonging to their clients; those requirements govern everything from how checks are written to how transfers are wired. Custodians also face scrutiny by financial regulators.

The Security of Storing Gold

Once an IRA custodian buys gold on your behalf, it is stored at an IRS-approved depository, or a federally regulated bank or credit union. Again, this can give you peace of mind, as depositories, banks, and credit unions have expertise when it comes to safely storing gold and other precious metals.

Gold purchased for a gold IRA can’t be kept in a home safe, a bank’s safe deposit box, a shoebox in your bedroom closet, or anywhere else except a depository, bank, or credit union. Storing gold away from one of these designated locations could jeopardize the safety of your precious metal.

Industrial-grade security systems make depositories “an extremely safe option,” CNBC notes.

Furthermore, the IRS might view the storage of gold from a gold IRA at your house or another unapproved place as an IRA distribution, which could trigger negative tax consequences. Of course, if you own gold or another precious metal that is not tied to a Self-Directed IRA, you can store it anywhere you like.

“Purchasing and holding assets in an IRA on a pretax basis [provides] a great benefit. To continuously receive that benefit, the IRA assets must be held by a financial institution or an IRS-qualified IRA custodian,” according to the Industrial Council for Tangible Assets.

The Security of a Hedge Against Inflation

An inflation hedge guards against the weakened buying power of money connected to an overall rise in the price of goods and services.

If the inflation rate climbs, traditional inflation hedges like gold, commodities, real estate, and inflation-related bonds “are likely to outperform other mainstream financial assets,” according to the World Gold Council.

Therefore, a gold IRA can be a safe haven when it comes to inflation.

“Gold stands out as a key portfolio component when identifying a long-term portfolio diversifier. Historically, gold has shown that it acts as an effective hedge and a useful part of the larger [risk] picture,” the Council reports.

Call U.S. Money Reserve to learn more about the safety often associated with gold IRAs. We can help you set a new one up or roll over an existing retirement account to a gold IRA. Contact us today for a private, obligation-free consultation.

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