Can I Hold Precious Metals in My IRA?
Gold has long been recognized for its ability to ward off inflation and protect wealth over time, yet many investors don’t realize physical precious metals can be added into an IRA under certain conditions.
The IRS permits individual retirement accounts (IRAs) to invest in silver, gold and platinum coins and bars meeting purity standards as long as these comply with their tax code requirements. Privately-minted bullion products also qualify as valid investments under these guidelines.
Taxes
Precious metals have long been seen as a safe haven during times of financial turmoil, yet they remain susceptible to market fluctuations and more expensive than other investment alternatives such as stocks or bonds.
Investors holding precious metals in an IRA should be mindful of any tax implications. According to IRS rules, collectible items like precious metals may be subject to a 28% capital gains tax rate.
In order to avoid incurring these charges, investors should purchase precious metals through a reliable dealer and ensure their IRA custodian and depository are compliant with IRS regulations. Furthermore, investors should also be mindful of potential exemptions that apply; for instance, disabled investors may be exempt from penalty withdrawing funds; early withdrawal penalties can also be avoided by taking distributions before turning 72; finally investors should avoid investing in metals minted by the federal government that meet certain purity requirements.
Investments
Though traditional IRAs are limited to stocks, mutual funds, and bonds, the IRS provides a statutory exception that permits precious metals such as gold, silver, platinum and palladium (gold coins or bullion) to be held within an IRA tax-advantaged account. To take advantage of this offering and hold physical gold coins or bullion in an IRA account you will need to open a Self-Directed IRA through an intermediary which offers this service.
Rosland Capital can assist in opening an account with your selected custodian, before helping to select a reliable dealer who offers various buying/selling/storage solutions for precious metal investments.
Gold and other metals may provide an effective hedge against inflation and the weakening U.S. dollar, while also diversifying their retirement portfolio with non-traditional assets not affected by paper securities’ volatility and risk.
Custodians
Custodians are bank and trust companies that serve as trustees of your self-directed individual retirement account. When it comes to precious metals IRAs, your custodian will buy physical metals from authorized dealers before storing them at an approved depository – either separately from other investors’ assets, or alongside them in an area designated specifically for precious metals IRAs.
Many people are looking at investing their traditional, Roth or Rollover IRA in gold as an attractive solution during these uncertain economic times. When doing so it is wise to consult a financial advisor in order to assess your options and weigh potential risks before allocating part of their portfolio to it. A professional can also guide them through setting up their precious metals IRA with a qualified custodian.
Storage
Gold’s reputation as an asset-holding medium during times of financial uncertainty has led many investors to consider precious metal investments as potential additions to their retirement savings portfolios. Of course, precious metal investing doesn’t come without its risks either.
If you purchase Precious Metals for an IRA, they must be stored with an approved depository to comply with IRS regulations. Depository fees vary by facility; some offer segregated storage (where individual coins or bars can be set aside for each Investor), while others do not.
Investors who violate IRS rules by storing their IRA-purchased metal at home could face distribution penalties as well as being audited by an independent auditor.
Setting up a Precious Metals IRA can be more expensive than opening a traditional IRA due to transaction, custodial and storage fees. Be sure to do your research in selecting an administrator, dealer and depository that meet all of your investment needs at an acceptable price.
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