How Do You Hold Precious Metals in an IRA?
Are You Searching For Precious Metals As Part Of Your Retirement Portfolio? Consider Opening A Self-Directed IRA
The IRS mandates that precious metals eligible for storage in an Individual Retirement Account (IRA) be stored with an approved third-party depository; however, not all depository options satisfy their standards.
Segregated storage (formerly commingled storage) is an approach to storage that separates precious metals from other forms of metal in one facility, using weight, purity level or other methods such as identification marks to keep assets separate from each other in their vault or storage facility.
When selling metals, your custodian will deposit the proceeds back into your IRA account for you to choose whether to keep or transfer to another IRA or non-IRA account.
People using their Self-Directed IRA to invest in precious metals find this to be an excellent way to diversify their portfolio and protect themselves against market volatility. Unfortunately, storing precious metals eligible for storage within an IRA at home could result in severe IRS penalties if possession is taken prior to reaching age 5912. For this reason, we advise working with an established metals dealer who can assist in finding an approved depository where you can safely store your precious metals.
Precious metals such as gold provide a safe and tangible form of wealth that has long been shown to reduce risks. Many investors also hold physical gold to hedge against inflation – something to keep in mind when planning your retirement portfolio.
The Internal Revenue Service may impose certain restrictions, but you can work around them by working with a reliable precious metals dealer who can assist in selecting eligible coins and bars made by private mints which have been independently audited to meet IRS fineness standards. Some unscrupulous firms that promote “home storage IRAs” or LLC IRAs which run counter to IRS rules must also be avoided by investors looking for precious metals for their IRA account.
Your IRA custodian will then purchase metals on your behalf and have them stored at an IRS-approved depository – this practice is known as allocated storage and can help ensure you never lose track of your precious metals!
Self-directed precious metals IRAs (or Gold IRAs) allow investors to make their own investing decisions, enabling them to invest in various assets – precious metals included – without running afoul of IRS guidelines. There are, however, certain rules which must be observed so as to avoid running into any trouble with them.
Precious metals offer a great way to diversify your retirement portfolio with traditional, Roth, SEP, SIMPLE or rollover IRAs. Their durability, tangibility and intrinsic worth provide protection from inflation, currency devaluation and geopolitical unpredictability.
For your protection and peace of mind, when investing in precious metals IRAs the IRS requires that the bullion you own be stored with an approved trustee (bank, FCU, savings & loan association or similar entity). Many IRA holders use what they perceive to be a loophole in the tax code to store IRA-owned precious metals at home; we at Midas do not advise this option.
Precious metals have long been an attractive retirement account investment option, offering tangible protection from inflation, currency fluctuations and geopolitical turmoil. Furthermore, precious metals offer an alternative investment option that is safe and secure when compared with stocks, bonds and mutual funds.
However, it’s important to keep in mind that an IRA holding only precious metals does not constitute a well-diversified portfolio and should make up no more than 5 to 10% of your overall investments. Furthermore, investing solely in gold and silver won’t yield dividends or earnings so compound interest won’t help your investments expand further.
Additionally, physical precious metals cannot be kept at home or in a safe deposit box – the IRS mandates that IRA-eligible gold and silver must be held in an IRS-approved depository. While some custodians work with multiple depositories, others only recommend one based on track record and reputation – both storage methods offer different advantages that will protect your IRA assets for the long run.
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