How to Get Gold in an IRA
An Individual Retirement Account, or IRA, is an invaluable investment vehicle for retirement savings as it offers substantial tax breaks. Unfortunately, however, certain precious metals cannot be held within an IRA according to regulations set by the Internal Revenue Service (IRS).
Some investors want to invest in gold coins, bars, or bullion but are unsure how. Here are two strategies for adding physical gold to an IRA account.
How to Get Physical Gold in Your IRA
Gold has become an increasingly popular way for investors to diversify their retirement portfolios. Many investors view gold as a safe haven asset during uncertain times; additionally, investing in physical gold bullion or coins requires finding an IRA custodian who permits such transactions; the IRS generally prohibits investing in collectibles such as gold within retirement accounts – however there may be ways around this rule.
There are IRA custodians who specialize in handling precious metals such as gold IRAs. These accounts allow you to buy any IRS-approved precious metal, such as bars or coins of gold bullion. Plus, these accounts offer all the same tax-advantages of standard IRAs like capital gains taxes avoided upon selling gold, yet typically charge higher custodial fees; so it is crucial that research these custodians before making your choice.
Investors looking to use their self-directed IRA to purchase precious metals must abide by certain rules when investing. For instance, the IRS stipulates that coins and bars eligible for inclusion into an IRA must meet stringent purity standards – for instance South African Krugerrands don’t qualify since their fineness falls below what’s necessary for eligibility.
These rules also place restrictions on what physical assets can be purchased. For instance, gold purchased for an IRA cannot be stored either in your own home or through third-party storage services like banks; rather it must come from an approved custodian approved by the IRS.
Custodians charge fees, but can provide greater transparency and liquidity than traditional brokerage accounts that deal with stocks and mutual funds. Furthermore, these custodians can help you purchase, store, insure large quantities of precious metals – though these accounts are more vulnerable to fraud as they lack full-service brokerage protections.
If you already have funds in a traditional or Roth IRA, moving them to a Gold IRA requires no extra fees or paperwork. Simply contact your account administrator to initiate the transfer, then your new Gold IRA custodian will take over to purchase precious metals on your behalf.
IRS rules stipulate that your IRA-purchased precious metals never be in your physical possession; so the Gold IRA custodian will purchase and store them at a depository of your choosing. When selecting a custodian, make sure they offer both segregated and allocated storage options, which provide enhanced protection of assets within an IRA account.
Gold investments offer many advantages for retirement savers, such as diversifying their portfolio. Before making any decisions or investments on your own, however, always consult a reliable investment professional – they will help maximize the effectiveness of your retirement savings while preventing common errors that many investors make.
Addition of gold to your retirement account can be an effective way to secure and potentially expand your wealth, but it is essential that you first understand its rules and fees prior to making a purchase decision.
First, establish a self-directed IRA. Next, choose which precious metal coins or bullion you would like to invest in; only certain types of gold meet IRS standards and qualify as investments eligible for an IRA.
Once you’ve made your purchase, have the IRA custodian store your metals in an IRS-approved depository. Either directly or with a partner who specializes in physical precious metals for IRAs can store these metals safely for you.
Selecting allocated storage (as opposed to commingled storage) means your precious metals will be secured, marked and kept under lock in a private locker under your name – giving more security but leaving less control over the physical gold assets you own.
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