Gold investing tips seniors should know

Following months of encouraging inflation news, a new report for July actually showed inflation ticking up again by 3.2%. With the benchmark interest rate currently sitting at a 22-year high and mortgage loans more expensive than any time since 2000, many Americans may be concerned about their economic well-being. This marks an opportune time to review investments for opportunities to cut costs and grow the bottom line.

In times of inflation, like we are now experiencing, some investors turn to gold. While gold can be a reliable investment for those of all ages, it's often relied on by seniors looking to diversify their retirement savings. 

While gold can be a reliable hedge against inflation, just like any other investment, there are some better ways to approach it than others. This is particularly true for older Americans who may have less disposable income and may be reliant upon their retirement savings and Social Security. For these investors, in particular, it helps to know some gold investing tips to better improve their return on investment.

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Gold investing tips seniors should know

Here are three tips for seniors looking to invest in gold now.

There are multiple options to choose from

While a traditional gold IRA is likely the best and most reliable way to invest in retirement for seniors, it's not the only way. There are multiple ways to get started in precious metal investing, ranging from gold IRAs to gold ETFs to gold futures and more. So do your research to make sure you're getting into the best type for you and your financial goals. 

There are also multiple gold investing companies to work with. While this is a positive, there are some companies that have better reputations than others, so do your research, read reviews and speak to other gold investors for their feedback. From there, you'll be able to more confidently choose the right gold investment type for you.

Get started with a free gold IRA information kit here now.

Don't exceed limits

Because of its unique position among potential investments, most experts recommend limiting your gold investment to a relatively small portion of your overall portfolio. This shouldn't typically exceed 5% to 10% of your portfolio, although that exact figure may be smaller depending on your exact age, goals and planned investment time. That's because gold is more of a reliable way to protect and diversify your current savings versus growing your bottom line. 

To effectively do the former you'll want to make sure you're invested in the right amount now — and be flexible and capable enough to adjust that amount in the years to come.

You won't make income overnight

One of the reasons investors shouldn't exceed the limit for gold investing is because gold isn't typically counted on as an income-producing investment. Yes, it'll generally (but not always) help keep your other investments afloat (since gold prices generally rise when the dollar is less valuable). 

But it can't be relied upon to make income overnight, or even in a few weeks or months like more volatile investments, like stocks, can. Instead, gold is a better long-term investment that you can potentially sell for a profit in the years to come. 

"10 ounces of gold bought 23 years ago in 2000 would have cost around $2,800," Mel Mattison, CFP, financial services professional and consultant, recently told CBS News. "Now, a child born then would have almost $20,000, perhaps just enough for a down payment on a starter home." Keep this in mind as you invest and understand that while gold will likely generate income, the substantial amount you're hoping for is unlikely to come overnight.

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The bottom line

Seniors looking to invest in gold may be able to benefit from its reliability and portfolio diversification, particularly in times of economic uncertainty like we are currently experiencing. To truly benefit from investing in the yellow metal, however, they should first explore all of their options to make sure they're getting started with the right kind. They should also understand their limits and invest in the right amount only (at the right time). Finally, seniors should be comfortable understanding the long-term benefits of gold investing and be less reliant upon the metal for a quick, income-generating alternative.