How much gold should you own in retirement? Rules of thumb for investors over 50
As retirement draws closer, many investors over the age of 50 are taking a harder look at how exposed their savings are right now. After all, a number of hurdles, from persistent inflation to market volatility and uncertainty around long-term purchasing power, have been impacting people's retirement portfolios. And, with no end in sight, these — and the other economic hurdles that are looming — will likely continue to impact retirees' savings for at least the short term.
But that tough landscape, coupled with the impressive price trajectory as of late, has also helped push gold investing back into the spotlight, especially when it comes to preparing for retirement. With the price of housing, food and other consumer goods elevated and confidence in traditional safe havens being tested, gold is increasingly viewed as a potential portfolio stabilizer rather than a speculative bet. Deciding how much gold belongs in a retirement plan isn't always straightforward, though.
Too little may offer limited protection, while too much can introduce new risks and tradeoffs. So how much gold should you actually own in retirement? Below, we'll detail what to know.
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How much gold should you own in retirement? Rules of thumb for investors over 50
There's no universal answer for the amount of gold to keep in your retirement portfolio. What works for one investor may not work for others. However, there are a few practical rules of thumb that you can use to help guide allocation decisions if you're an older investor, including the following:
The 5% to 10% guideline
The most widely cited rule suggests keeping gold investments between 5% and 10% of your total portfolio. For a $500,000 retirement nest egg, that translates to $25,000 to $50,000 in gold or gold-related assets. This range provides meaningful diversification benefits without turning your portfolio into a precious metals fund. While conservative retirees who prioritize capital preservation often stick to the lower end, those concerned about currency devaluation or geopolitical risks might want to push toward 10% instead.
Learn more about the benefits of gold investing in retirement.
The inverse age rule
Another rule of thumb is to apply an "inverse age rule" specifically for gold, which suggests that your maximum gold allocation should equal 100 minus your age. Using this approach means that a 65-year-old investor would want to cap gold holdings at 35%, though most experts would consider this overly aggressive. A modified version suggests your age minus 50 as a more reasonable ceiling, giving that same 65-year-old a 15% maximum, which is still higher than the traditional guideline but potentially appropriate for those with specific inflation concerns or substantial other assets.
The income-replacement consideration
Retirees should remember that gold does not produce income in a traditional sense, at least not the way dividends or interest earnings would, which matters significantly when you're no longer earning a paycheck. Financial planners often recommend limiting non-income-producing assets to 15% to 20% of your total portfolio. So, if you want to use this rule and hold real estate, collectibles or growth stocks that don't pay dividends, your gold allocation should be proportionally smaller. For example, a retiree who's relying heavily on portfolio income might want to cap gold at 5% or even less, depending on their overall needs.
The liquidity reserve adjustment
Before adding gold to your retirement portfolio, it's important to ensure you've fully covered essential liquidity needs. Most experts recommend maintaining one to three years of expenses in cash or cash equivalents, plus an emergency fund that covers several months' worth of expenses. Only after meeting these requirements should you consider gold allocations. This prevents the forced selling of gold during market dips just to cover living expenses, which is one of the biggest mistakes retirees can make with alternative investments.
The diversification method
The gold assets you choose also have an impact on how much gold you should own. Whether it's gold coins, bars or fractional gold, physical gold that's kept in a safe deposit box might warrant a smaller allocation — perhaps 5% — due to storage costs and selling friction. Gold ETFs, gold mining stocks or gold mutual funds offer easier liquidity, though, and might justify allocations toward 10% instead. Many retirees split the difference, keeping 3% to 5% in physical gold for true crisis protection and another 7% to 5% in gold securities for tactical flexibility.
The bottom line
For most investors over 50, a gold allocation between 5% and 10% of their total portfolio strikes an appropriate balance between diversification and growth potential. This provides meaningful protection against inflation and market volatility without sacrificing the income generation and appreciation retirees need to sustain potentially decades of living expenses. Still, your personal gold allocation should reflect your overall financial situation, risk tolerance and other portfolio holdings — and it should be reviewed annually as both your circumstances and gold's role in markets evolve.
