For tens of millions of Americans nearing retirement, 401(k)s and IRAs are deep wells of wealth and security. However, as much as these accounts provide tax-deferred growth, they are not protected from some systemic risks. Indeed, traditional retirement plans commonly put savers at risk in ways they don’t realize, particularly in times of high inflation, wide swinging markets, and economic uncertainty.
At Cedar Gold Group, we assist individuals in protecting their retirement savings through rollovers into precious metals IRAs, an option that diversifies and protects your portfolio. In this article, we will consider five lesser-known risks of the conventional retirement account and explain why many more Americans are incorporating physical gold at the core of their long-term retirement plans.
Conventional retirement accounts rely heavily on stocks, bonds, and mutual fund assets closely linked to market performance. Markets rise in the long term, but short-term volatility can significantly impact retiree outcomes, particularly people close to retirement.
For example, retirees who lived through the 2008 financial crisis or the COVID market shock of 2020 suffered a severe blow to their portfolios. Those forced to withdraw during downturns realized actual losses rather than paper ones, a phenomenon known as sequence-of-returns risk.
According to data from the Federal Reserve, the S&P 500 lost more than 38% in 2008, a devastating blow for many approaching retirement that year.
Physical assets like gold historically maintain value during market declines. Gold has long been considered a safe haven asset and has a history of holding steady or increasing in times of stock market stress.
Among the biggest threats to retirement savings is one you’re very likely to face: the gradual decline in purchasing power that comes with inflation. At a more moderate 3% annual inflation rate, today’s dollar could have half its value in 25 years.
For retirees on a fixed income, inflation can erase their ability to pay bills for basics like housing, health care, and groceries.
Gold and silver have been stored as inflation hedge investments for thousands of years because they hold their value when fiat currencies do not. Gold tends to hold its own when the dollar is weak, as it has been during some economic cycles, offering longer-term protection.
The U.S. dollar is still the world’s reserve currency, but questions about its long-term stability are being raised. Some analysts are also skeptical about the dollar’s strength, given increasing national debt, changing global alliances, and the discussion of a BRICS gold-backed currency.
Countries like China and Russia have increased their gold reserves massively in the last decade. According to the World Gold Council, central banks worldwide bought over 1,000 tonnes of gold in 2022, indicating an effort to hedge against fiat risk.
Traditional retirement accounts are denominated in dollars (they are “dollar-denominated”), so they’re directly susceptible to currency devaluation. Diversifying into precious metals can serve as an antidote to this risk, creating a store of value independent of fiat.
Diversification has been well-established as a principle in personal finance. Yet, most mainstream retirement portfolios still consist of paper assets such as stocks, bonds, ETFs, and mutual funds.
Even portfolios labeled “diversified” are often just different slices of the same pie: all paper-based and susceptible to systemic risks. In times of financial system stress, the correlation among these assets also rises, resulting in simultaneous losses.
Physical gold and silver in a self-directed IRA add a non-correlated asset class and reduce general portfolio volatility. Precious metals are also unrelated to equities, making them a good asset class for risk-averse investors.
Government policies around retirement accounts, mainly regarding taxation, required minimum distributions (RMDs), and withdrawal rules, are subject to change. This introduces an element of unpredictability for retirees trying to plan decades into the future.
When you roll over a portion of your IRA or 401(k) into a Gold IRA without taking an actual distribution, you preserve your tax benefits while adding a physical hedge against political and fiscal risks.
Not so much in the near but in the more distant future, when Americans will worry about their indebtedness, inflation, and change in geopolitical power. What about retirement during a dollar collapse? Those who are in nothing but dollar assets would be hit hard.
Gold has been a good store of value during currency crises in countries like Venezuela, Zimbabwe, and, indeed, in the U.S. during the stagflation of the 1970s gold in the IRA. One way is by adding physical gold to your IRA.
Here’s a quick recap of the five overlooked risks in traditional retirement accounts:
| Risk | Why It Matters | Potential Protection |
| Market Volatility | Losses near retirement can be devastating | Physical gold often rises when stocks fall |
| Inflation | Erodes purchasing power | Gold is a time-tested inflation hedge |
| Currency Risk | Dollar devaluation affects all dollar-denominated assets | Precious metals are independent of fiat |
| Lack of Diversification | Paper-heavy portfolios move together | Gold is a non-correlated asset |
| Regulatory Changes | Laws and taxes can shift suddenly | Self-directed IRAs offer more control |
Your retirement deserves more than hope; it deserves a strategy. While traditional retirement accounts offer benefits, they also come with risks that many investors overlook. As uncertainty grows around inflation, global currency shifts, and market volatility, exploring alternatives like a Gold IRA rollover becomes not just wise but necessary.
At Cedar Gold Group, we specialize in helping individuals convert their 401(k) to gold, explore Silver IRA rollovers, and build recession-proof retirement portfolios. Our team walks you through each step, ensuring a seamless and secure process without offering specific financial advice.
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Learn how to buy gold with your IRA.
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Your future deserves more than paper promises. Let Cedar Gold Group help you protect what matters most.
