Putting your eggs in a golden basket may sound like a scene right out of a fairytale. This seemingly glittery sight is now a reality. Precious metals IRA is a relatively new and refreshing way to invest your hard earned money. With good old-fashioned paper investments such as stocks, bonds, or mutual funds, Precious metals IRA usually go against the tide when it comes to inflation- thus creating a sort of insurance policy for your investment portfolio.
As an example of a self-directed IRA, Precious Metals IRA exempts you from having to pay capital gains taxes. Another bonus. In a nutshell, a Precious Metal IRA enables individuals to secure financial assets as a retirement investment. You can choose from gold, silver, palladium or platinum coins or bullion as your assets. Moreover, it offers more flexibility since you have the option of cashing it out or simply get these actual gold bars or bullion, for instance, that you can easily sell when the need arises, during the distribution of your golden bonus.
Now, your next question is how do you do it? It’s simple. You can either move your existing IRA to precious metals or roll it over to any qualified retirement plan such as the 401(k) with the help of a recognized custodian. Just comply with the necessary paperwork and you’re all set. Opening the account and facilitating the transfer are all done with your custodian’s assistance. And one of the most important thing you need to bear in mind when talking about Precious Metals IRA is that your precious metal of choice must be made by an authorized national mint.
What types of precious metals are we talking about here?
The four precious metals that are allowed on an individual retirement account are gold, silver, platinum and palladium, provided they are in the form of IRS-approved coin or bar products. Since gold is the most commonly purchased of the four, the predominant term “gold IRA” is used most often as industry slang to mean a retirement account containing any combination of precious metals. Other terms such as, “precious metals IRA”, “silver IRA”, “platinum IRA”, or “palladium IRA” are also frequently used.
The most common Precious Metal IRAs are a Gold IRA and a Silver IRA. You can set-up a Gold IRA with the help of a custodian. It is available in 1 oz., ½ oz., ¼ oz., and 1/10 oz. U.S. coins. Meanwhile, a Silver IRA is priced a little lower than gold but is easier to set-up than the former. You can have the 1 oz. Silver U.S. Coins, as well as some Royal Canadian, minted ones. In short, all you need to do is to open a custodian account, fund that account, and buy approved products, in this case, precious metals, and you’re all good.
The Taxpayer Relief Act of 1997 broadened the permissible types of investments allowed in IRAs, stating: "Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. Beginning in 1998, your IRA can invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion."
So how does one invest in precious metals?
Know that to roll over Traditional or Roth IRAs into precious metals IRAs does not require a complicated process or set of procedures. Roll over assets in your 401(k) plan to a gold-backed or other metals IRA after leaving a current employer. Realize it's difficult to transform an employer's 401(k) plan while you're still employed by them; although it's possible.
Transfer existing credit union, bank, stock brokerage and other IRAs directly and more easily. Reassign cash or securities to open a precious metals IRA. Consult with a financial adviser specializing in precious metals IRAs who can negotiate this process with your current firm for you to transfer your account and open a precious metals IRA.
Note that only 24 karat gold bars are permitted in a precious metals IRA, and each must have a NYMEX/COMEX-approved refiner/assayer hallmark. Find similar parameters with gold coins, which must also be 24 karat gold; however, one exception is the 22 karat US Gold Eagle coin.
Add silver coins or bars (0.999+ fineness only) to open a precious metals IRA. Include platinum or palladium bars or coins (90.9995+ fineness only). Get more out of your investment though with gold and silver.
Choose a trustee with the advice of your precious metals IRA adviser and store the precious metals with a custodian. Expect to be charged storage and custodial rates.
With an ever-changing global economy still in beginning stages and driven by unpredictable societal/political factors, regime transformations and overall unpredictable mayhems, what better way to save than to invest in an IRA based purely on gold, silver and other precious metals. This releases an investor from having to rely on stocks, bonds, and other paper-based investments valued according to the success or failure of other people’s decisions. Whether you stick with your Traditional or Roth IRA or ultimately decide to open a precious metals IRA, ample research and knowledge gained from reliable online sources and other investors will help you make the right decisions, surpass other forms of unsure investments and ultimately build a solid retirement/ investment portfolio.