How Do I Buy Gold Coins With an IRA?
Gold investing is one of the best ways to diversify your retirement portfolio, but before making any decisions it’s essential that you consult a tax specialist for specific IRS rules and IRA investment advice.
Physical bullion coins or bars typically fulfill IRS standards; these must come from an NYMEX or COMEX-approved refinery or national government mint.
Self-directed IRAs allow for investments in precious metals while traditional and Roth IRAs limit them, however you should be aware that the IRS has strict rules regarding what purchases can be made through an IRA; tax code prohibits investments such as life insurance policies, collectibles and certain kinds of metals.
To purchase gold coins with your self-directed IRA, first open a custodian account and find an eligible metals dealer (Augusta Precious Metals charges low fees while providing transparency in pricing). After you have everything set up, begin buying.
Some experts advise setting up a self-directed IRA in the form of an LLC to reduce custodian fees; however, this structure has yet to be approved by the IRS and could cause you to lose money should it fail or close down unexpectedly. Furthermore, once your account has been closed off you will owe dealer charges at wholesale rates to purchase back your coins back from them.
People interested in gold ownership often enjoy owning physical coins or bullion in an IRA; however, storage and insurance costs for precious metals can be prohibitively costly. Instead, investing in an ETF that trades publicly might provide better exposure. When purchasing physical gold coins or bullion though, an IRS-approved custodian must be used – who typically charges fees both to establish the account as well as store the assets safely.
These custodians typically include banks, credit unions, brokerage firms and savings and loan associations approved by both federal and state governments to provide asset custody services to clients. Some established custodians will have relationships with several hundred dealers around the country. Investors should shop around to find an attractive deal and choose a custodian with transparent fees as these costs can add up quickly. In addition, investors should find one offering an assortment of investment products so they can find one that matches their investment goals best.
Self-directed IRAs make investing in physical precious metals possible, providing access to investments not allowed under conventional retirement accounts by the IRS. All that’s necessary to invest is finding a reputable precious metals dealer offering coins, bars, and bullions eligible for your IRA account at rates suitable to your investment goals.
Once you’ve established both your custodian and depository accounts, the next step should be selecting which bullion or coin to buy. Most IRAs purchase gold American Eagles due to their liquidity; however there are other options available too. Once chosen, an IRA company will purchase and deliver your chosen metals directly into your designated depository; you will incur transaction costs as well as annual maintenance and storage fees which should be stated clearly on their website.
IRAs impose stringent requirements regarding which assets can be stored within them, according to IRS regulations. Jewelry and certain coins aren’t eligible, while gold bullion marked as “IRA-compatible” or “IRS-approved” may also be suitable investments for an IRA investment portfolio. Investors should keep costs associated with closing out an IRA in mind as well, including storage and insurance costs.
Dependent upon how you fund your retirement account, taxes on gold investments might need to be paid when withdrawing them. Traditional IRAs are funded with pre-tax dollars and will incur taxes at retirement; Roth and SEP IRAs use after-tax dollars that will only incur taxes when making withdrawals. Furthermore, transaction fees associated with purchasing precious metals for an IRA might incur extra charges and it is always wise to shop around to find the lowest prices before making this investment decision.
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