How to Ensure that Your Hard-Earned Money is Protected From Bank Failures and Runaway Inflation
You’ve worked hard and saved diligently for a good retirement. So you want to know that all the years you’ve put in will reward you with the life you desire when you stop working.
Will you have enough money to enjoy time with your family and friends, travel as much as you like, or build your dream home? Or will outside factors such as current market volatility and bank failures chip away at your savings?
Here’s what you need to know about how to protect your retirement assets and ensure that they last through your lifetime and beyond.
How Bank Failures Can Wipe Out Savings
Banks fail due to mass withdrawals when bank customers lose confidence that their funds are safe.
That’s why Silicon Valley Bank (SVB) and Signature Bank failed recently — due to plummeting consumer confidence after risky investments.
With interest rates at all-time lows, SVB invested deposits into what they thought would be lower-risk, higher-return investments: long-term bond funds. However, as interest rates rose, the long-term bonds they held lost value.
So when tech firms began withdrawing large amounts of their cash reserves, SVB had to raise liquidity by selling the bonds before they matured — causing massive losses and ultimate collapse.
FDIC insurance covers bank deposits up to $250,000 per bank account. Any bank customer with more than $250,000 in an account is at risk of losing their cash when a bank collapses.
While it can be comforting to know that you have a lot of cash in the bank, it can be risky if you have too much in just one account. It’s better to spread your cash in more than one savings vehicle.
Inflation Impacts Your Retirement Savings
Inflation is a silent thief that slowly steals your savings over time, penny by penny. The same dollar put in a basic savings account saved in 1983 was worth just 37 cents in 2021.
In periods of high inflation the value of the dollar can plummet so fast that you can’t even keep up with your monthly food and living expenses. Right now, the US is in a high inflation period. The cost of living is rising at the fastest rate in 40 years.
And with interest rates near record lows on interest-bearing accounts, the cash in these accounts cannot retain its purchasing power to keep up with inflation.
How to Protect Your Retirement With a Gold IRA
With savings bank interest rates still close to 0%, the cash stored in a bank account has no chance of keeping up with inflation.
Investing your cash in 100% stocks gives your retirement a lot more room for growth. But market volatility that has stocks swinging from winners to losers within weeks can put your retirement at serious risk.
Gold historically has countered inflation, not only retaining its value but appreciating and growing in value over time. Consider this: the US Dollar has lost 86% of its value since 1972 (the year gold ownership was re-legalized), whereas gold has increased 622% in that same time frame.
When you turn your dollars into gold coins or bars, you can retain the value of your money without worrying about inflation.
What Are The Advantages of Keeping Gold in an IRA?
- There are several reasons why you might want to invest in gold and other precious metals in your IRA:
Tax Advantages: Gold held in an IRA is exempt from capital gains taxes, meaning you can benefit from price appreciation without incurring any tax liability immediately.
- Diversification: Gold is a great way to diversify a portfolio and reduce overall risk. Adding gold to an IRA helps to balance out riskier investments and can help protect against inflation.
- Portfolio Stability: Gold has a long history of being a stable and secure investment, making it an ideal choice for retirement savings. Gold’s stability can act as a hedge against volatility in other markets, helping to protect your portfolio.
- Easy to Buy and Sell: Gold held in an IRA is easy to buy and sell. You can work with an IRA custodian to purchase gold and other precious metals for your portfolio.
- Ultra-Secured Storage: Your gold will be separated in an ultra-secure storage facility. McAlvany partners with Delaware Depository to secure your gold IRA
- No Need to Take Custody: Because Gold IRAs require an equity-approved custodial service, you won’t have to ship gold to yourself or get your own safe to store it.
Need an IRA Tune-Up?
Don’t let market turmoil and bank failures threaten your financial security.
At McAlvany, we’re offering a complimentary 15-minute IRA tune-up call with one of our expert advisors. During this call, our team will help you evaluate your current retirement savings and IRA portfolio to ensure that it aligns with your goals.
With the deadline to contribute to your IRA approaching on April 18th, now is the perfect time to make sure that your investments are working hard for you and possibly even entitle you to a tax deduction.
Our team of experienced advisors can guide you through the process of investing in precious metals within your IRA (whether you have an IRA with us or not), which can help protect your retirement savings against inflation and economic downturns. With strong upward momentum in gold, now is the perfect time to stay on top of your IRA portfolio.
To get started, contact us for a free consultation: 1-800-525-9556.