Inflation is a scary word for those who save for retirement. If inflation changes too quickly, you’ll see your retirement funds dwindle before your eyes. Inflation has risen steadily year after year in the recent past, however this does not mean you should stop saving for retirement. There are ways to beat inflation by creating a very special type of IRA called a self-directed IRA.

Most people think of stocks, bonds, and mutual funds when they think of IRAs, because they are traditional investments. Those same people don’t realize that they could also be investing in gold, silver, rental property, and just about anything else. By signing up for a self-directed IRA, you can take some of your retirement savings and start investing them in ways that will protect you from inflation.

Real estate is a great way to protect your money from inflation because houses retain their value even if the currency itself doesn’t. People need places to live and they will always be willing to pay a premium for them. By using a custodian that will allow you to invest in real estate, you can start building your retirement by renting a home or business each month.

If you invest in real estate, you must be very careful not to rent to immediate family members, not to use the house yourself, and to have all of the rent returned to your IRA each month. Making any of these mistakes will result in IRS penalties, which will definitely hurt your retirement savings.

If real estate is not your thing, you can invest in precious metals. Gold has been one of the safest ways to hedge against inflation for as long as people have used it and there are many custodians who have no problem with you making this type of investment. You will want to stay away from collectible coins made of precious metals. Also, all metal you buy will need to be in the hands of your custodian, as you cannot manage the assets yourself.

The good thing about precious metals is that they retain their value even when entire economies collapse. Even if the US government collapsed next year, you could take all your precious metals and get your money back in another country with no problem.

Inflation is scary, but you can protect yourself from it with a little careful investment planning. Investing in tangible assets will help protect your earnings and is also a great way to diversify your income.