Can You Hold Precious Metals in an IRA?
Precious metals can make a valuable addition to any portfolio, but those holding an Individual Retirement Account (IRA) should understand its associated IRS restrictions and fees before purchasing physical precious metals. As an alternative to physical gold investing, consider investing in gold ETFs or mining stock mutual funds instead.
Gold bullion or coins may also be purchased through a custodian, however these may be considered collectibles and therefore not permitted within an IRA.
Taxes
Precious metals investments within an IRA are subject to similar taxes as any other investment, so it’s essential that you understand how this will impact your retirement savings. Gold will be taxed at its collectible rate when leaving an IRA account, so any gains may require capital gains taxes and may even incur capital gains charges.
Due to their more difficult sellability than stocks, precious metals IRAs require additional consideration when liquidating investments if required.
In addition, if you want to gain exposure to precious metals without the complications associated with physical ownership, ETFs that track specific metal values offer exposure without creating any taxable distributions or storage fees and dealers; an excellent choice for diversifying retirement portfolios while providing inflation protection.
Fees
Fees associated with investing in precious metals within an IRA can quickly add up, including application and setup charges from your custodian, transaction fees for physical gold, silver, or platinum coins or bars, transaction storage fees from coin/bullion dealers ranging from several dollars per ounce up to several hundreds per bar sold, annual storage fees that typically depend on how much is held within an IRA and annual maintenance fees charged based on its holdings.
Investors should explore other means to gain exposure to alternative assets, like precious metals, including exchange-traded funds or mutual funds that track precious metal prices and indexes. These alternatives can be less expensive, easier to set up, more flexible in their investment strategies and can offer the same diversification benefits that a Precious Metals IRA does – an effective way of protecting against inflation while supporting retirement growth.
Storage
Precious metals may seem like a secure bet during times of economic turmoil, but their value has often proven just as volatile. To safeguard your retirement assets properly and safely, investing through a Self-Directed IRA with a trusted custodian would be your best bet.
Your IRA custodian purchases physical precious metals on your behalf from dealers and stores them in an approved depository that meets IRS standards regarding size of storage units, management capabilities and recordkeeping.
Purchase precious metals directly from dealers such as U.S. Money Reserve and store them either at home or in a bank’s safe deposit box; however, this method forfeits the benefits of professional asset management services like U.S. Money Reserve as well as incurring penalties when withdrawing them before age 59 1/2 (this penalty must also be added onto taxes and penalties that might be assessed against your withdrawals). Therefore it’s crucial that precious metals investments be handled by an IRA custodian with expertise in these investments.
Dealers
IRS allows precious metals in an Individual Retirement Account, but not as collectibles. Only coins and bullion that meet fineness requirements may be held within a Precious Metals IRA – an account type within Self-Directed IRAs where funds from Traditional, Roth or SEP IRAs may be transferred over.
Gold, silver and palladium are among the most widely traded precious metals, but gold stands out as being particularly sought-after by retirement investors due to its history of value preservation and providing protection from currency volatility.
When choosing an IRA dealer, look for one with an established relationship with your IRA custodian and offers competitive prices for products you are interested in. Also look for companies that are members of industry trade groups such as American Numismatic Association or Industry Council for Tangible Investments; Birch Gold Group keeps open lines of communication with clients throughout their investing journey while remaining available to answer questions at all times.
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