How Do I Add Gold to My IRA?
There are easier ways to gain exposure to precious metals, including investing in exchange-traded funds or mutual funds that track gold and silver prices or indexes. These investments typically offer lower costs and risks while simultaneously diversifying your retirement portfolio without the hassle of setting up an individual Retirement Account (IRA).
IRA Eligibility
Even though you can open a dedicated gold IRA, precious metals can also be added to retirement accounts like traditional and Roth IRAs, as well as SEP IRAs for self-employed individuals. To achieve success with your precious metals IRA investments, make sure your custodian meets IRS regulations when purchasing products for storage within their account.
Most gold IRA providers charge annual fees that cover account maintenance, storage, and insurance; in addition, some have an additional markup fee when purchasing products like bullion bars or coins approved for an IRA account.
Though precious metals may seem attractive, they should only constitute a portion of your overall retirement portfolio – most experts advise no more than 5 to 10% in an IRA. To gain exposure without opening another account directly, invest in mutual funds or ETFs dedicated to gold investing; alternatively you could even directly purchase shares of gold mining companies. Discover more of how gold can play an influential role in retirement by requesting U.S. Money Reserve’s free Gold IRA Information Kit today!
IRA Custodians
People looking for exposure to precious metals for diversification and security purposes may consider opening a self-directed gold IRA. There are a handful of companies that provide this service; however, to ensure you make informed decisions you should speak to an investment specialist about IRS rules as well as any minimum investment requirements set by each provider.
Your self-directed IRA requires selecting an IRA custodian who is capable of purchasing and storing eligible coins and bullion on your behalf. Be wary of custodians offering investment advice or pushing their own gold products as these could be scams.
Your IRA custodian will purchase and deliver gold you choose directly to an IRS-approved depository, giving you full control of your precious metal investments. However, keep in mind that the IRS prohibits you from keeping eligible gold stored at home or in a safe deposit box as this could constitute distribution and incur taxes and penalties; additionally storing metals at home exposes them to theft and potential damage risks.
IRA Storage Options
As the economy has faltered, investors are taking stock of their financial priorities and reconsidering precious metals as an insurance against economic uncertainty or inflation.
Your IRA custodian can purchase gold from an approved dealer on your behalf and store it safely with them in an institutional depository that specializes in physical precious metal storage.
Reputable gold IRA providers work with depository facilities that provide maximum security and insurance. Many also act as custodians, meaning you don’t pay two sets of annual fees: brokerage/asset transaction/storage costs versus insurance costs (these costs vary based on which precious metal you invest in and who acts as custodian).
IRA Taxes
Precious metals in an IRA are seen as safe haven investments during times of economic instability. Their price often increases when stocks decline and are used as diversifiers to hedge portfolio risks; however, precious metal investments do not come without their own set of risks.
The IRS has laid out specific guidelines regarding which gold pieces and bullion bars may be stored in a precious metals IRA, including pieces with half, quarter or one-tenth ounce weight and bullion bars. Reputable precious metals IRA companies sell such products and adhere to IRS standards when selling them to clients.
Traditional, ROTH, SEP or SIMPLE IRAs are suitable for holding approved precious metals; self-directed IRAs also permit alternative assets like gold. When considering your gold investments options, always remember that gold-focused mutual funds or ETFs may offer greater liquidity and cost less to manage than physical gold IRAs. Furthermore, please remember that required minimum distributions begin at age 72 for your entire IRA portfolio; that includes gold investments.
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