The Hidden Risks (BACKED BY DATA) of Owning Too Much Gold in Retirement

In this comprehensive video, we dive deep into the topic of retirees and the often-debated question: “Should you buy gold in retirement?” We begin by unraveling the fundamental purpose behind owning gold in retirement. As a historical store of value, gold has played various roles in investment portfolios. However, it’s essential to recognize that gold is not your typical investment. With no dividends and a price that can be volatile, it’s crucial to understand the reasons for considering gold in a retirement portfolio.

We explore the primary purpose of owning gold, which is to shield your cash from losing buying power due to inflation. While this might sound straightforward, historical data shows that gold hasn’t always provided a reliable hedge against inflation. We delve into the historical performance of gold over the past 20 years, analyzing its price movements and comparing them to the fluctuations in the cost of goods, particularly ground beef.

By comparing the prices of goods over two decades, we highlight the erosion of purchasing power due to inflation.

Transitioning to the performance of gold during the same period, we uncover a contrasting narrative. Gold’s value appreciation has been remarkable, with prices increasing from $410 per ounce in 2004 to approximately $2,000 per ounce in 2024. The question arises: Can gold be a reliable hedge against inflation, and is gold a wise investment for retirees?

Despite gold’s impressive historical performance, we address the complexity of this precious metal as an investment. We emphasize the need for strategic timing, as gold can be as risky as other investments if not purchased wisely. We discuss the speculative nature of gold, emphasizing that predicting future events, such as high inflation or global conflicts, remains uncertain.

Acknowledging the risks involved, we caution against going all-in on gold without understanding the potential downsides. The video stresses the importance of balancing risk by suggesting a conservative approach—using only 30 to 50 percent of a discretionary rainy-day fund for gold purchases. This way, even if the gold price takes a downturn, retirees can view it as a calculated attempt rather than a substantial financial setback.

In the final segment, we encourage viewers to evaluate their individual circumstances and make decisions based on their personal retirement goals. While some may find gold to be a suitable addition to their portfolio, others may prefer alternative investment strategies. Consulting a financial advisor is emphasized to ensure alignment with specific retirement objectives.

Join us on this insightful journey into the complexities of gold as an investment in retirement. Gain a deeper understanding of historical performance, risks, and the considerations that should shape your decision-making process. Don’t miss out on this valuable information to empower your retirement planning.
CHAPTERS:

00:00 – Introduction to Owning Gold
01:12 – Period when owning gold in retirement was worth it
03:24 – Period when gold value was down and inflation was high
04:51 – How much gold should you own in retirement?

DISCLAIMER: NOT A FINANCIAL ADVICE
#retirement #gold #investment #retirees #preciousmetals #seniors #portfolio #dollar #inflation #goldprice #silver

In today’s video we’re going to explore the idea of owning gold in retirement before we jump into whether it’s a good idea let’s first understand why people consider owning gold gold has been valuable for a really long time and has been used in different ways in investing

But here’s the thing gold isn’t like regular Investments it doesn’t give you regular payouts like dividends and its price can go up and down a lot the main reason people own gold is to protect their money from losing its buying power when prices go up which is called

Inflation but it’s not as simple as it sounds there were times in the past specific decades when gold didn’t do a great job as an inflation hedge Yes you heard it right gold didn’t perform well during certain periods so in this video we’re going to check out how gold has

Done historically how it behaved and based on that we’ll share our thoughts on how much gold you might want in your retirement plan we’ll also talk about what to expect and more importantly why it’s crucial to be aware that gold doesn’t always work out the way you

Might think stick around because this is important stuff you won’t want to miss let’s take a closer look at how prices have changed over the last 20 years a period That’s roughly equivalent to the length of many people’s retirement we’ve gathered this data from the St Louis fed focusing on the price

Changes of ground beef back in 2004 a pound of beef cost around $225 fast forward to 2024 and the price has jumped to $550 per pound to put this into perspective if you had $100 in 2004 you could purchase 40 lb of beef however that same $100 today only gets you8 lb

It’s clear that the value of your money isn’t what it used to be to simplify having $100 today is akin to having $60 in 2004 you can use a free calculator to see the extent of this decline this information highlights why it’s crucial to understand these changes for Effective retirement planning now let’s

Shift our Focus to how the value of gold changed over the same period it turns out gold did exceptionally well in terms of price appreciation in 2004 the price of 1 ounce of gold was around $410 by 2009 it had surged to roughly $900 moving on to 2014 the price reached around

$1,260 per ounce in 2019 it was hovering around $1,280 per ounce fast forward to 2024 and it’s now approximately $2,000 per oun in simple terms if you had invested in gold as soon as you entered your retirement years you would have made a significant gain regardless of when you

Sold it outpacing inflation by a considerable margin sounds amazing right well it’s not quite that simple unfortunately the world doesn’t always work the way we hope it would in the next segment we’ll take you through a specific time period when gold underperformed compared to holding on to

Cash issuing retirees pies in the face from both inflation and gold price depreciation this is Bob who just bought some gold in 1980 to beat inflation and he is playing guitar in excitement now let’s look at the inflation figures from 1980 to year 2000 and how gold price

Fared during the same period by the way if you are enjoying this video please hit that like button and be sure to subscribe to this channel so you won’t miss any future videos like these let’s get back to our inflation calculator you will see the $100 in 2000 was like

Having $48 in 1980 the inflation was actually worse than the previous period we looked debt how did gold do during all those years not so good price of gold was around $850 in 1980 it was around $400 in 1990 and by the year 2000 the price of gold was

$300 you can probably tell where we going with this Bob bought 1 ounce of gold for $850 and sold for $350 in 1999 after factoring in 48% deterioration in purchasing power of dollar during the same period Bob’s $850 had turned into $168 in other words Bob was down 81% in

Nominal value had he stayed in cash he would have lost only 48% due to inflation poor Bob had to settle for chickens the key takeaway is that unless you time your gold purchase wisely it can be just as risky as other Investments while the periods of significant growth predicting the future

Is impossible while gold is often seen as a safe bet during geopolitical turmoil uncertainties abound ultimately investing in gold involves speculation on factors like high inflation or potential World conflicts this speculative nature introduces risks you might have come across videos where people Advocate going Allin on gold however it’s crucial

To comprehend the risks and historical performance during specific Peri periods if I were talking to my grandfather I’d advise using only 30 to 50% of a rainy day fund for gold purchases remember portion of rainy day fund the portion of fund you can live without this way even

If the price takes a hit you can say you gave it a shot and move on do what you believe is right for you or consider Consulting a financial adviser to align your investment choices with your personal retirement goals thank you for watching and see you on the next one