Can You Hold Gold and Silver in an IRA?
Precious metals provide security and inflation hedging benefits, but aren’t considered the optimal way to build your retirement portfolio. Most experts advise investing no more than 5%-10% of an IRA in precious metals.
Add gold to your IRA is easy, but selecting a reliable custodian is essential to protecting your retirement savings and maximizing its value. Fees can cut into your retirement funds and alter its worth over time.
With the stock market near record heights and interest rates at their all-time lows, some IRA holders are turning away from traditional equities such as Treasuries and money-market funds and opting for precious metal investments instead. Before taking this path however, it’s crucial that they understand any tax implications which apply.
The Internal Revenue Service considers precious metals to be collectibles. Therefore, if you purchase physical gold or silver coins using funds from your IRA account, this transaction will be treated as the acquisition of a collectible and treated as a taxable distribution from your account.
Avoid this issue by investing in precious metals ETFs and mutual funds instead of buying physical metals directly from dealers. But be aware that even these investment vehicles come with fees, such as setup, transaction, custodial and physical asset storage charges that could eat away at your returns – which is why most experts suggest keeping precious metals investments limited to a percentage of your overall retirement portfolio.
Gold and silver IRAs can be an appealing retirement savings vehicle, but it’s essential that investors fully comprehend all of the associated fees when owning precious metals in such accounts. Furthermore, unlike stocks or mutual funds, which offer dividends as dividends on investments; precious metals IRAs don’t provide this potential income stream.
Owning precious metals comes with several expenses, such as annual storage and insurance fees that could make an impactful statement about how serious an investor you are about investing. These fees could have an influence on whether or not to open such an account.
Before purchasing precious metals from any dealer, be sure to conduct extensive research. It’s advisable to look for those belonging to industry trade groups like the American Numismatic Association or Industry Council for Tangible Assets; segregated or commingled storage options could impact how much fees you owe; for optimal protection, seek a dealer that offers segregated storage so your metals are safer from natural disaster or theft.
As a rule, holding physical gold and silver in an IRA is prohibited as the IRS considers this distribution and levies tax penalties accordingly. Instead, invest in gold-related securities (mining stocks and ETFs) or bullion coins to meet tax compliance.
Your IRA custodian should store your metals at an IRS-approved depository, typically Delaware Depository or Brinks Global Services; or in a private vault offering equivalent security at reduced cost.
IRA custodians charge storage fees to ensure your security and comply with IRS-compliance. Typically, this ranges from $100 to $300 annually; to ensure maximum value is gained, however, you should aim to avoid companies charging hidden one-time or annual fees, which could add up over time and negatively affect your precious metals investment. Furthermore, storage companies often add higher premiums onto products to offset this fee burden.
To open a precious metals IRA, it’s necessary to select a custodian who provides safe storage of physical gold and silver purchases, and determine what types of metals to invest in. Well-established companies offer several services aimed at making sure you make an informed decision – including consultation services to help guide you towards making the ideal choices based on your investment goals and ratings from Consumer Affairs.
Lear Capital stands out with an outstanding Better Business Bureau rating and 4.9 stars out of five on Trustpilot, offering multiple advantages such as price match guarantee and portfolio tracking services. They sell popular American Eagle coins such as PAMP Suisse bars which comply with IRS standards; additionally they have excellent customer ratings making them great one-stop shops to purchase and store precious metals safely. Rosland Capital and Oxford Gold Group also have strong credentials as one-stop solutions that allow for buying and safely storing precious metals.