Can I Put Physical Gold in My IRA?
An Individual Retirement Account (IRA) can be an invaluable way to save for retirement, yet not all custodians permit physical gold investing within an IRA.
For investing in physical gold coins and bullion bars, a self-directed or precious metals IRA that allows this form of investment will be necessary. While these accounts typically incur higher fees than standard IRAs.
Taxes
IRA accounts offer an effective way to diversify retirement savings through tax-deducted contributions, though investing in certain assets such as collectibles, antiques, rugs and precious metals could trigger unrelated business taxable income (UBTI). Real estate and certain alcoholic beverages also fall under this category.
Self-employed individuals and small business owners may also utilize Simplified Employee Pension Plan (SEP) or SIMPLE IRA plans for retirement savings purposes. These accounts follow similar tax rules to traditional IRAs; contributions come from both employer and employee contributions, with limits set at 25 percent of salary or $69,000 respectively compared to $16,000 maximum contributions available exclusively for workers in traditional IRAs.
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Liquidity
Implementing physical gold into a retirement account requires careful consideration of various factors, including fees, security and storage requirements. You should also assess if a gold IRA or physical gold investment fits with your goals and risk tolerance, while bearing in mind that gold and silver investments usually yield lower returns than equities or mutual funds.
Physical gold investing can be accomplished using any one of three vehicles: traditional, Roth, and SEP IRAs. SEP IRAs are available to business owners and self-employed individuals alike; Roth or SEP IRAs allow investors to save tax-free in retirement through pre-tax income investment.
To begin investing in physical gold, you need to open a self-directed individual retirement account (IRA). A custodian who accepts precious metals and a metals dealer are necessary in order for you to purchase and sell assets – usually only bullion coins that meet IRS fineness standards are permitted; fraudsters may attempt to charge more for “numismatic” coins but these do not bring additional profits and are harder to sell than bullion coins.
Security
Gold bullion in physical form may be subject to theft or loss – this risk comes with all investments; however, precious metals tend to carry lower risks than paper assets like stocks and bonds.
Physical bullion investors must also factor in storage fees at both home and professional storage facilities; these expenses can add up quickly. Furthermore, physical bullion investments do not trade as liquidly as other investments – sales may take days or weeks depending on market conditions.
Investors investing in paper assets such as commodity exchange traded funds (ETFs) or gold pools may face similar concerns, although these products tend to be more regulated and transparent than dealers dealing in physical gold, as well as being less susceptible to fraudulent price manipulation by fraudsters. Still, however, market volatility must still be taken into consideration.
Flexibility
Individual taxpayers may open Roth, traditional and SEP IRAs at various financial institutions that are approved to offer such accounts by the Internal Revenue Service – such as banks, brokerage firms and federally insured credit unions.
Investors can select from an extensive variety of investments to include in their IRA, such as stocks, bonds, exchange-traded funds (ETFs) and mutual funds. A more hands-on option would be a self-directed IRA (SDIRA), where investors have complete control of all investing decisions made and can invest in riskier assets like real estate or commodities.
To determine which IRA type is right for you, consider your retirement goals and current financial status. An NYLIFE Securities financial services professional can assist with setting up and funding an IRA as well as making recommendations as to where best to put your savings. Fees associated with maintaining and funding an IRA should also be factored into this decision-making process – these may include account maintenance fees, transaction fees or expense ratio fees. Discover more by scheduling an appointment online today.
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