Can You Have Gold in an IRA?
Investing in precious metals can provide your retirement portfolio with added diversification during times of economic unease, making IRAs a suitable vehicle. But special consideration must be taken.
One major drawback of investing in gold through an IRA is that the IRS considers it to be a collectible. There are ways around this rule.
What is an IRA?
An individual retirement account (IRA) is a tax-deferred investment vehicle for saving for retirement. The IRS allows various forms of IRAs – traditional, Roth and SEP accounts are all allowed – while self-directed IRAs give investors access to precious metals and other asset classes not typically covered by traditional or Roth accounts.
Precious metals such as gold have long been seen as safe haven investments; however, they don’t provide any dividend or yield like stocks and high-grade bonds do. Their prices may increase during stock market dips but then fall again once stocks recover their values.
If you invest in a precious metals IRA, your custodian will purchase and store the metals on your behalf from a dealer and depositories that specialize in protecting these types of assets. Depending on which IRA type you own, they could either be stored unallocated among all of their other precious metals clients or dedicated exclusively for you IRA.
How do I open a gold IRA?
Gold IRAs are similar to traditional retirement accounts, except they’re backed by physical gold and other precious metals. When investing in a gold IRA, investors work with an approved dealer to purchase these precious metals with retirement funds and then store them at a depository facility.
These investments may appreciate in value without incurring taxes; however, when withdrawn they’ll still be subject to penalties depending on how old the investor is.
As when opening any IRA, opening a gold IRA involves additional fees that should be considered when opening one. These include a one-time account setup fee that varies by financial institution and annual custodian and asset or transaction fees similar to other IRAs. You might even encounter storage fees which differ between companies; some offer dedicated storage while others use commingled storage (where your precious metals are kept alongside those belonging to other investors), both options offering advantages and disadvantages.
How do I invest in a gold IRA?
If you’re thinking of adding gold to your retirement portfolio, there are a few key points you should know. First, open a self-directed individual retirement account (SDIRA) that permits investing in physical precious metals; also find an experienced custodian that understands IRS rules regarding physical assets like gold.
Storage and insurance costs associated with gold stored in your IRA must also be factored in, while seller markup can also add extra expenses.
Before making any decisions regarding gold IRA companies, it’s essential to conduct extensive research. Be wary of providers using high-pressure tactics or offering excessive amounts of free silver; seek professional advice if needed from both financial advisors and tax specialists in order to make an informed decision that suits your personal situation best.
How do I access my gold IRA?
Many investors choose to include gold in their retirement portfolios because precious metals offer an insurance policy against inflation and other uncertainties. Some investors may prefer an ETF instead, which offers greater flexibility.
Interested in starting a precious metals IRA? You have several options for opening one: from funds already held in another retirement account such as a Roth or traditional IRA, through rollover from a previous employer’s 401(k), or directly with U.S. Money Reserve as your custodian (they buy gold from dealers before having it sent to an IRS-approved depository).
Be mindful that precious metals IRAs tend to come with higher fees than more traditional IRAs, including setup, annual, and storage costs. Also make sure your custodian offers a buyback program so if your mind changes you can sell back to them.
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