Understanding American Gold Ownership: How Much Gold Does the Average Person Own?

Determining the amount of Gold the average American owns can be challenging since it varies depending on income, financial stability, and personal preferences. While some Americans invest in Gold to hedge against inflation or diversify their portfolio, others do not own any gold.

According to data from the World Gold Council, the United States is the biggest market for gold jewelry and the third-largest market for investment demand. In 2020, the total gold demand in the United States was 681.4 metric tons, with 38% of the demand coming from jewelry and 62% from investment demand.

It's important to acknowledge that gold ownership can take many forms, including physical Gold in bars or coins, gold jewelry, and gold-based financial products like exchange-traded funds (ETFs) and gold futures contracts. An average American may own Gold in one or more forms depending on individual preferences.

There are various methods for owning Gold, including purchasing physical Gold, investing in gold mining stocks or mutual funds, or buying gold futures or options. Some people may also hold Gold in their retirement accounts like 401(k)s or IRAs if those accounts offer gold investments.

The value of Gold can be impacted by different factors such as market demand, economic conditions, and geopolitical events. Due to these factors, owning Gold can serve as a diversifying element to an investment portfolio, as it can protect against inflation and other financial risks.

Benefits of Investing in Gold

Gold has been considered a valuable investment for centuries and remains a preferred choice for many investors today. There are several advantages to investing in Gold, including the following:

Diversification

Gold has long been regarded as a "non-correlated" asset, exhibiting a distinct performance pattern from other assets like stocks or bonds. This makes it an attractive option for diversifying an investment portfolio and potentially lowering overall risk.

Hedge Against Inflation

Historically, Gold has been considered a safeguard against inflation due to its ability to retain its value over extended periods. The limited supply of Gold and its increasing demand can cause its value to rise when the purchasing power of other currencies decreases because of inflation.

Haven Asset

Gold is commonly referred to as a "safe haven" asset as it is known for its ability to retain its value during times of economic uncertainty and market instability.

Liquidity

Gold is a highly liquid asset quickly sold for cash when necessary. This makes it an attractive investment option for individuals requiring quick asset access.

Tangible Asset

Investors who prefer tangible assets over financial instruments may find owning physical Gold appealing, as it allows them to hold and touch the asset. However, it is essential to remember that investing in Gold comes with risks and may not be suitable for everyone. Before making any investment decisions, it is necessary to consider your investment goals and risk tolerance.

Gold IRA accounts have become increasingly popular among Americans with retirement accounts like 401(k)s. These accounts offer several advantages over traditional 401(k)s, as they allow investors to invest in physical Gold, which typically holds its value and does not depreciate.

Converting Your 401(k) to a Gold IRA: A Step-by-Step Guide

To convert a 401(k) account to a gold Individual Retirement Account (IRA), one must initiate a transfer of assets from their 401(k) to a self-directed gold IRA.

Steps to Roll Over from 401(k) to Gold IRA

Choose a Gold IRA Custodian

To roll over a 401(k) account to a gold Individual Retirement Account (IRA), it is essential to find a company that specializes in gold IRAs and can serve as the custodian for your account. Several reputable companies, such as Goldco, Augusta Precious Metals, and American Hartford Gold, can be researched online to find one that meets your needs.

Open a Gold IRA Account

After selecting a Gold IRA custodian, you must open a Gold IRA account with them. The account opening process typically involves providing personal and financial information and deciding on the funding method, such as transferring assets from a 401(k) account.

Transfer Your 401(k) Assets

You must initiate a rollover process to transfer your 401(k) assets to your new Gold IRA. This can be done by completing a rollover form that your gold IRA custodian provides or by directly contacting your 401(k) plan administrator and requesting a direct rollover.

A Direct Rollover from 401(k) to Gold IRA

A direct rollover transfers assets from a 401(k) account to a gold Individual Retirement Account (IRA) without being distributed to the account holder. This is done to preserve the asset's tax-deferred status and avoid paying taxes on the distribution. To initiate a direct rollover, select a Gold IRA custodian and create a Gold IRA account with them. Next, contact your 401(k) plan administrator to request a direct rollover of the assets to your new Gold IRA, and the plan administrator will provide you with the required forms to complete the process.

Also Read:Assessing the Kingdom Trust Gold IRA: A Comprehensive Review

An Indirect Rollover

When an individual opts for an indirect rollover, the assets in their 401(k) account are distributed to them. Then they deposit the amount into their Gold IRA within a specified time frame. This differs from a direct rollover, where the assets move directly from the 401(k) to the gold IRA without involving the account holder.

An indirect rollover may be appropriate for investors who want a brief control period over the assets before transferring them to a gold IRA. However, investors must remember that specific rules and regulations apply to indirect rollovers. These include:

Time Limits

To prevent taxation, deposit the distributed assets from the 401(k) into the gold IRA within 60 days.

Tax Implications

If you're under 59 1/2, an indirect rollover from a 401(k) to a Gold IRA may result in income tax and a possible 10% early withdrawal penalty.

Rollover Limits

An investor should remember that there are limitations on the number of indirect rollovers allowed per year. Before opting for an indirect rollover from a 401(k) to a Gold IRA, assessing the tax consequences and other potential risks is crucial. Seeking advice from a financial advisor or tax professional is highly recommended.

Furthermore, it's worth noting that a direct rollover from a 401(k) to a Gold IRA can be a complicated process. Before making any decisions, weighing the tax implications and other potential risks is essential. It's highly advisable to seek the guidance of a tax professional or financial advisor.

Choose Your Gold Investments

After completing the rollover process and transferring your assets to the gold IRA, the next step is to select the specific gold investments you want to hold in the account. Your options may include physical Gold in coins or bars, gold mining stocks, or mutual funds that invest in Gold.

It is crucial to remember that rolling over a 401(k) to a Gold IRA can be complicated. Therefore, it is vital to carefully consider the potential tax implications and risks before deciding. Seeking guidance from a financial advisor or tax professional is recommended to make an informed decision.

Determining Eligibility for a Rollover

Individuals with a 401(k) account eligible to receive a distribution from that account may also be qualified to roll over the assets to a gold Individual Retirement Account (IRA). Nonetheless, specific rules and limitations may apply, including:

Age

To take a distribution from a 401(k) account, the account holder usually must be at least 59 1/2 years old. If the account holder is younger than this, rolling over the assets to a Gold IRA may still be possible but could be subject to specific penalties or restrictions.

Employment Status

You need to be separated from your employer to receive a distribution from a 401(k) account. If you are still employed with the company that sponsors your 401(k) plan, you may still be able to roll over the assets to a Gold IRA, but you may have to wait until you are no longer employed to initiate the rollover process.

Plan Type

Reviewing the terms of your 401(k) plan is crucial because some plans may have specific rules or restrictions that impact your ability to transfer the assets to a gold IRA. For instance, particular programs may permit rollovers to another employer's 401(k) plan or an IRA only after you have ceased employment.

Consulting with a financial advisor or tax professional is advisable to comprehend your options and any potential limitations or restrictions.

Understanding Gold IRA Account

Investors can use a gold Individual Retirement Account (IRA) to add physical Gold and other precious metals to their investment portfolio. These self-directed IRAs allow the account holder to select the specific assets held in the account, provided they adhere to the IRS's rules and restrictions.

To open a gold IRA, one must locate a company specializing in precious metal IRAs and act as the account custodian. Then, an account can be opened with the custodian, and the specific Gold investments are chosen, including physical Gold like coins, bars, gold mining stocks, or mutual funds.

A Gold IRA is a wise choice to diversify an investment portfolio and protect against inflation or other financial risks.

Advantages of Owning Physical Gold

There are several ways to own physical Gold, such as collectible coins, mutual funds, ETFs, and mining stocks. A significant advantage of owning physical Gold is that it cannot be stolen online, providing financial security.

Physical gold investment also offers anonymity. Governments may freeze bank accounts, but physical Gold is harder to seize. Creditors cannot easily access physical Gold, depending on its storage location. Choosing a reputable company, such as Goldco, can ensure added security.

Moreover, physical gold investment has the benefit of being loss-proof. The performance of stocks depends on external factors, such as the company's management. In contrast, Gold has an inherent value, making it an independent asset. Therefore, investment in physical Gold is not correlated with fund management or other external entities, providing a reliable investment option.

Top Companies to Assist with Investing in a Gold IRA

Many companies offer assistance with gold IRA investments, but it is essential to be cautious and choose a reputable company to work with.

Goldco

Goldco is a company that specializes in precious metal investments, including Gold and other precious metals. It was founded in 2006 and provides various products and services to assist investors in diversifying their investment portfolios and safeguarding against inflation or other financial risks.

Products and Services Provided by Goldco 

Gold and Silver IRA

One of the leading products offered by Goldco is Gold and Silver Individual Retirement Accounts (IRAs), which enable investors to hold physical Gold and silver, as well as other precious metals, as part of their retirement portfolio. New accounts that invest in silver receive a 10% benefit. However, to establish a gold IRA account with Goldco, you must have $25,000.

Precious Metal Storage

Goldco is a company that specializes in precious metal investments, offering various products and services to help investors diversify their portfolios and protect against financial risks.

Precious Metal Coins and Bars

Investors can choose from a diverse selection of metal coins and bars, such as Gold, silver, and platinum when investing with Goldco.

Education and Support

Goldco offers a variety of educational resources and support services to assist investors in comprehending the precious metal market and making informed investment choices.

Augusta Precious Metals

Augusta Precious Metals is a company that has been operating for over ten years and is highly regarded by most Americans. The company invests in precious metals such as Gold and silver. It provides various products and services to assist investors in diversifying their investment portfolios and safeguarding against inflation or other financial risks.

Products and Services Offered by Augusta Precious Metals Include:

Precious Metal IRA 

Augusta Precious Metals provides investors with Individual Retirement Accounts (IRAs) that enable them to hold physical Gold, silver, and other precious metals as part of their retirement portfolio.

Precious Metal Coins and Bars

Augusta Precious Metals offers a wide variety of precious metal coins and bars for investors, including Gold, silver, and platinum.

Precious Metal Storage

Augusta Precious Metals provides secure storage alternatives for investors looking to safeguard their precious metal assets, including Gold, silver, and other metals.

Education and Support

Augusta Precious Metals offers a range of educational resources and support services to assist investors in comprehending the precious metal market and making well-informed investment choices.

American Hartford Gold

Since 2016, American Hartford Gold has been headquartered in Los Angeles, California. The company offers a website section enabling customers to monitor Gold, platinum, and silver stock prices and industry news to better manage their Gold IRA accounts. Upon opening an account, the company necessitates an annual fee of $180.

Conclusion

Investing in non-depreciating assets like Gold and other precious metals is essential. If you are considering converting your 401(k) account into a Gold IRA, contact the three reliable companies mentioned above. They will assist you in setting up and managing your account.