Can I Buy Gold Coins With My IRA?
Gold can serve as both an inflation hedge and wealth builder. You can purchase IRA-eligible gold coins and bars from various companies that will ensure they comply with IRS requirements for investment purposes.
Successful investing of physical precious metals requires using a self-directed IRA account. These accounts enable investors to invest in alternative assets including physical precious metals.
Legal Tender Coins
Legal tender coins are those which may be used as a currency to pay for goods and services. The IRS has designated some gold coins that qualify for inclusion in an Individual Retirement Account (IRA).
Coins eligible for inclusion in an IRA meet certain minimum fineness requirements and must be legally issued from a government entity. Furthermore, they must be manufactured by an accredited refiner/assayer/manufacturer such as COMEX/NYMEX, LME, LBMA, or ISO 9000 refiner, assayer or manufacturer.
IRA-eligible coins are generally bullion coins with a face value equal to their precious metal content, providing investors with an intrinsic value that can easily be cashed in or exchanged for other goods and services. However, physical possession of an IRA-eligible coin or precious metals will trigger taxes and penalties; to comply with IRS rules they should be kept under custody in a depository storage facility under control and custody of a custodian.
Bullion Bars and Rounds
Physical bullion investment options within an IRA may include coins, rounds or bars. When making this choice, however, it’s essential to think through what you hope to accomplish by owning bullion – coins may be ideal as a safe haven against financial collapse; or you could diversify your retirement portfolio with gold-focused mutual funds, futures contracts or even ownership in gold mining companies.
Be mindful that if you purchase physical bullion with your IRA, it must be stored with an IRS-approved depository – this means paying annual custodian fees as well as storage and insurance costs associated with its holding facility – these additional expenses come on top of brokerage costs associated with setting up any IRA account.
Collectibles
Collectibles offer diversification to an IRA portfolio but come with greater risk than legal tender coins and bullion bars due to an unpredictable and less-regulated market for collectibles. When investing in collectibles, investors should research each item extensively as well as locate trustworthy dealers or collectors’ groups before making purchases.
An Individual Retirement Account, or IRA, cannot typically invest in physical precious metals directly; however, due to a statutory exemption defined as Section 408(m) of the Internal Revenue Service Code. an exception does exist which allows people to purchase gold American Eagle coins using their retirement accounts as these coins enjoy tax code exemption.
Individuals looking to diversify their IRA portfolio with precious metals may wish to consider investing in either a gold-backed ETF or directly in mining companies that mine these commodities. As with all investments, precious metals IRAs do not come cheap; investors can expect annual account maintenance and storage charges, along with markup on sales costs. When shopping around for an appropriate company to buy and store metals from, pay particular attention to how transparent its website is regarding fees.
Self-Directed IRAs
Self-directed IRAs allow investors to select their assets and investments themselves. Some companies provide self-directed IRAs designed specifically to hold gold and other precious metals. Unfortunately, however, these accounts generally carry higher fees than traditional IRAs due to setup charges, annual custodian fees, and storage costs assessed by depository facilities.
Fees associated with opening an IRA often outweigh its total purchase cost, leading Sentell to advise investors to thoroughly research all available providers before opening one.
IRS rules allow Individual Retirement Arrangements (IRAs) to invest in “certain coins and precious metals bullion.” This includes gold American Eagle coins but does not apply to other collectibles like silver and platinum coins unless they meet specific purity standards. IRA custodians must hold onto them until emergencies arise – however an owner of an IRA could take physical possession in case of disaster or other emergencies.
Comments are closed here.