Can I Buy Physical Gold in a Self-Directed IRA?
Traditional IRA custodians restrict investors to paper assets; but you can circumvent this compulsion with a self-directed IRA that permits you to buy physical precious metals like coins and bullion.
This article will show you how to do just that. Furthermore, it will explain the benefits associated with owning physical gold within an IRA.
What is a Self-Directed IRA?
Self-Directed IRAs enable investors to purchase precious metals like gold, silver and platinum directly. This investment differs from traditional IRAs in that the physical bullion remains in your possession rather than being kept by an IRA custodian.
This type of IRA requires finding and selecting a licensed precious metals dealer, along with an appropriate custodian to store and manage your investment securely in an external facility – as this would violate IRS rules if stored in your own home.
Many investors mistakenly believe gold is an investment with guaranteed returns, but it’s important to remember that unlike stocks, its prices fluctuate just like stocks – making it hard to achieve meaningful returns from your gold investment. Furthermore, once you reach age 70 1/2 your IRA account may become subject to required minimum distributions (RMDs) which require you to pay taxes before being able to enjoy it in retirement.
How can I buy physical gold in my IRA?
Have you heard of an Individual Retirement Account (IRA) investment in gold or silver, only to discover that according to IRS rules it isn’t permitted? Most custodians won’t allow an IRA’s money be invested in precious metals as the assets must remain under their supervision at all times.
There are ways around this limitation, however. One option is a self-directed IRA which permits investing in other things besides registered securities – like physical gold and other precious metals, real estate investments, private businesses and so forth.
An alternative method for setting up an IRA is creating a true self-directed IRA, which permits you to establish an LLC through which it will invest its assets. However, this structure could incur additional fees from its custodian and is therefore not recommended.
How can I store my physical gold in my IRA?
First step to secure physical precious metals is finding a custodian who accepts physical precious metals. Traditional custodians such as Fidelity or Schwab do not specialize in self-directed gold IRAs, so make sure your chosen company specializes in these solutions and has all necessary licenses, registrations, insurance, and bonds to manage your investment properly.
Most of these companies work with established depository storage providers such as Delaware Depository or Brinks to store your gold securely and legally, taking care to comply with IRS rules in all paperwork transactions and paperwork transactions.
Most experts advise allocating 5-10% of your retirement assets to precious metals to diversify and lower counter-party risk, but for optimal results consult a financial advisor based on your unique financial circumstances and store precious metals with an insured depository.
How can I sell my physical gold in my IRA?
Most IRA custodians do not permit you to invest in physical gold via your IRA; their focus lies on offering investments such as stocks, mutual funds and ETFs instead.
IRS regulations regarding an Individual Retirement Account (IRA) stipulate that coins and precious metal bullion cannot be held within an IRA without first requiring custody from an independent custodian, due to being considered collectibles which violate tax code regulations pertaining to IRAs.
But there are exceptions when it comes to IRA-eligible precious metals, specifically. To qualify, the metal must meet certain purity guidelines (at least 999.5 fineness), be produced by an authorized mint and segregated and stored with an approved depository – typically including fees such as one-time account setup fees, annual maintenance costs and insurance premiums. South African Krugerrands don’t make the cut but American Eagle bullion and proof coins do; South African Krugerrands don’t either; only American Eagle bullion and proof coins make the cut – South African Krugerrands don’t qualify while American Eagle bullion doesn’t meet this criteria – instead; only American Eagle bullion and proof coins do; South African Krugerrands don’t qualify. Furthermore, you must store coins separately in an approved depository where fees such as one Time Account Setup Fees Annual Maintenance fees Storage fees Storage fees plus Insurance fees might apply; to fully qualify under this service all other fees might apply as well.