Whether you’re planning to retire early, or simply move to a lower-paid, less stressful job when you can, financial planning is key to a smooth transition. Most people in these positions rely on savings to help boost their financial pot, and may have taken out investments in various forms and markets as part of this plan. If this rings true for you, you may be wondering about the best time to cash in – or whether it’s best to hang on to them for a little while longer.
Gold has long been a sought-after commodity, and many countries around the world still value it highly as a stable form of money. In fact, demand for gold rose by 28% in 2022. In this post, we’ll discuss four things you should think about when selling gold investments.
Timing
As with any investment, the timing of the sale can be tricky. Unless you need the money right away, you may be better off leaving your investments to gain interest – but the risk with stocks and shares, for example, is that their value decreases. The same goes for gold, which can see a change in value due to economic conditions and other world events, although it is notoriously an excellent hedge against inflation. J.P Morgan estimates that gold prices will peak in 2025, so if that lines up with your plans, it may be worth holding on.
However, remember that a prediction is just that: an estimate. If you’re happy the current value meets your needs, or you would be upset if your gold decreased in value, then don’t wait. Whilst it’s true you might not make as much as you could if you’d waited, it’s all about balance.
Tax Implications
If you’ve opted for physical bars, coins or ingots, then you need to make sure you understand the tax implications of selling these items. Just the same as other precious metals, physical gold is subject to capital gains tax in the US, equal to your personal marginal tax rate. However, fortunately for those with higher tax brackets, this is capped at 28%.
If you hold exchange-traded funds in a company that invests in gold, rather than physically holding the gold yourself, the same rules apply. Additionally, if you hold your gold for less than a year, it becomes a short-term capital gain – meaning you won’t be able to take advantage of the lower tax rates, as it will just be classed as normal income.
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Finding a Reputable Seller
Unfortunately, there are plenty of scammers out there who want to benefit from your hard-earned investments. You may stand to make a lot of money from your gold, and as such, there are people out there waiting to try and take it from you. With 95,000 people reporting losses thanks to social media-based fraud in the US, it’s vital that you stay vigilant, and only trade your gold via a reputable seller. Even in-person trades are not exempt from risk, so make sure you’ve thoroughly researched your chosen person or platform before making any commitments or sharing personal information.
Some things to check include:
- Their website
- That they have a registered address
- Reviews
- That they have accurate and up-to-date contact information
- They’re not asking for too many personal details
Reputable dealers will typically have lots of positive reviews and recommendations. They’ll have a professional email address, and won’t ask you to do anything questionable, such as handing over money which they’ll then return.
If you’re at all unsure, pause the transaction. You have the right to query why they need certain information, and you can always speak to other dealers to see if they ask for the same thing. Don’t be afraid to seek advice from others – a genuine buyer will understand your caution.
Photo by Ibrahim Rifath on Unsplash
Know the Value of Your Gold
When you’re selling an investment like gold, it’s important to understand how much it’s worth to several people before you make a decision. If you know some basic information already, such as the weight and the carat, you may be able to get a rough estimate of its value online via a live price chart. If you’re not sure of either of these measurements, contact an expert to get this information as a starting point.
Once you’re sure of your portfolio, you can contact various buyers for estimations and offers. Much like many other things, getting several different opinions is crucial here – both for your wallet, but also so you can clearly identify any suspected scams. You may also want to look at historic gold data, so that you can understand if now is the right time for you to sell, or if you’d expect the value to rise in the future.
Secure Your Future
If you already have gold stocks, or are thinking about purchasing some, make sure to follow the above advice to get the most from your investment. That way, you can sit back and enjoy your retirement as you’d planned to.
