Since 2005, the Canadian Revenue Agency has allowed Canadians to hold pure gold bullion in their RRSPs and save for retirement. The advantage to buying gold as part of your RRSP is taxes. In 2009, gold was also added to TFSAs (Tax Free Savings Accounts). The regulations make it simple to add gold to your savings without paying a huge tax bill on your investments.
Not only does RRSP gold make buying gold easy and affordable, investing in gold as part of your retirement portfolio is an effective long-term strategy for maintaining wealth. Gold is both an insurance policy and a long-term store of value. When stocks markets plunge, gold has historically seen major gains. Significant gold holdings in your retirement portfolio can offset losses you suffer when stock markets crash and help you recover or transition your portfolio. Gold also has a very good track record when compared to inflation. The wealth you invest in gold today will still be there when you cash in decades from now.
Before you buy gold, you should know a few rules that apply to make sure your gold is eligible for your RRSP so that you don’t wind up paying a major tax bill:
· Gold needs to be at least 99.5% pure, which means most Royal Canadian Mint gold bars and gold coins are eligible
· You must buy gold through a third-party gold dealer that will report your purchase to the CRA, something that gold dealers like Silver Gold Bull (through partnerships with brokers) can do
· You must follow regulations on shipping, storing, and insuring. A Canadian gold dealer can help you find out about what you need to do
· Collectible coins are not eligible for your RRSP, but gold bullion coins like the Canadian Gold Maple Leaf and American Gold Eagle are acceptable
RRSP gold must be stored in a list of facilities provided by the CRA. Storage must be insured and it can be allocated storage, meaning that the physical gold is held in your name only. Allocated storage from Silver Gold Bull and similar gold dealers provide secure and insured facilities, with protection from Canadian Investor Protection Fund.
Buying gold is an investment in your future. In the past, mainstream investors shrugged off gold, but it’s no longer such a niche investment. It’s never been easier to invest in RRSP gold either. All you have to do is check the live price of gold today, find a gold dealer, and buy pure gold bars and gold coins. More and more investment advisors are suggesting using RRSP gold as an insurance policy in retirement portfolios. Retirement portfolios should mix income-generating investments and high growth investments with conservative assets that will retain their value over time or move opposite to stocks.
It also helps to be flexible. When stock markets are in decline, increase your gold position to take advantage of the inverse relationship. Readjust as high-growth opportunities begin to rise again. Investing in gold is a smart move for retirement portfolios.