Should you add gold to your retirement investment strategy?

Planning for retirement in the midst of economic uncertainty is a problem that is now becoming a reality for many Americans. Lately, financial professionals have been stressing the fact that far too many workers are inadequately prepared for their retirement years. In fact, according to the Center for Retirement Research at Boston College, more than 50 percent of today’s baby boomers will not be able to maintain their standard of living after retirement and a large percentage will have only Social Security to get them by.

To deal with these concerns, Congress first addressed the issue in 1974 by introducing the IRA as a part of the Employee Retirement Income Security Act (ERISA). In 1981, the Economic Recovery Tax Act (ERTA) made additional changes to what has now become a series of ways that both employees and self-employed individuals can better prepare for retirement in tax-advantaged ways.

**The Value of an IRA
**
Any individual seeking to accumulate assets for retirement needs to obtain competent and detailed financial advice. Putting together a diversified portfolio with different investment classes is a foundation of most modern financial planning. Any financial planner will tell their clients that a fully-funded IRA and any other tax-advantaged program should be an annual priority.

The reason that these programs are so advantageous is that they offer some form of savings on taxes that accumulates, putting the time value of money to work for an individual. You either pay the taxes up front and get the accumulated funds tax-free or don’t pay taxes until you make withdrawals, letting the money accumulate. This can mean tens of thousands of additional savings, and more in some cases.

**Precious Metals, IRAs and Diversification
**
One reason for a detailed financial plan is to properly deal with both short and long-term investment goals. A diversified portfolio of investments allows you to properly prepare for retirement with a good return on capital while basically ignoring the natural swings in the marketplace. The important thing to focus on is the value of your portfolio, not simply the cash total. Value is a measure of purchasing power and that is what will be most important to a retiree.

Many professionals today are convinced that the financial markets are facing a time of inflation, with some even predicting historically significant levels of inflation. The worldwide deficits of virtually all governments and their failure to rein in spending levels make such a situation virtually unavoidable, particularly when the U.S. and western governments are no longer artificially holding rates down.