Can You Use Your IRA to Buy Gold?
People who believe gold will protect their purchasing power against inflation or increase their wealth over the long-term can invest in physical precious metals through an Individual Retirement Account (IRA). Unfortunately, setting up and managing such an account can be expensive due to one-time fees for account setup, annual custodian fees, storage and insurance costs.
What is an IRA?
IRAs are retirement accounts used for investing various assets. There are three different kinds of IRAs – traditional IRAs, Roth IRAs and SEP IRAs – with traditional being funded with pre-tax dollars while earnings grow tax-deferred until withdrawal at retirement time; Roth IRAs however use after-tax funds so distributions must be declared as income and taxed accordingly.
SEP IRAs are tailored specifically for self-employed individuals and small-business owners. They enable tax-deferred contributions, similar to regular IRAs, without being subject to contribution limits like regular IRAs.
Physical precious metals can provide a safe haven investment and may appreciate during times of economic instability. Unfortunately, owning physical gold in an IRA comes with additional expenses and restrictions such as storage and insurance costs as well as markup fees from precious metals dealers that make owning physical gold less appealing for certain investors.
How do I open an IRA?
To invest in physical gold, it is necessary to open a self-directed individual retirement account (IRA). Established IRA custodians typically accept precious metals from banks, credit unions, brokerage firms and savings and loan associations as custodians for these accounts; some even maintain relationships with multiple precious-metal dealers across the country and can recommend trustworthy ones that they work with directly.
Once your new account is set up, there may be one-time and annual fees to consider, which vary by institution. Furthermore, if you invest in physical bullion there will also be storage and insurance charges that should be considered.
As with all IRAs, it’s crucial that you choose your investments wisely. A gold-only IRA might lack diversification and incur unnecessary expenses. Furthermore, once you reach age 70 1/2 your IRA may require a required minimum distribution (RMD), which might involve selling some precious metals unless direct institution-to-institution rollovers can be organized through some IRA companies in order to avoid penalties associated with RMDs.
What are the fees associated with an IRA?
Finding a reliable self-directed IRA custodian is the key to purchasing physical gold with your IRA account. A self-directed IRA enables you to oversee and direct the management of your account directly, giving you greater flexibility than traditional or Roth IRAs to select more varied investment products for your account.
An investment in precious metals provides diversification, economic protection and inflation protection while still protecting tax benefits of retirement savings. Gold doesn’t suffer bankruptcy in an economic collapse or experience devaluation by inflation like stocks or mutual funds can.
Although an IRA with physical gold provides many advantages, its operation can be more costly than other types of IRAs due to transaction and storage fees. These fees include one-time account setup charges, annual maintenance fees and seller markup; in addition, other charges such as storage or cash-out fees may also apply when taking your required minimum distribution (RMD). All of these factors should be taken into consideration when considering whether or not precious metals IRA is appropriate for you.
How do I buy gold in an IRA?
Gold IRAs provide you with an opportunity to diversify your retirement savings portfolio through physical precious metal investments. Funds can be added through either an IRA rollover or directly contributing from cash in another account, and then purchased through U.S. Money Reserve as the custodian who purchases from an approved distributor and arranges delivery to a secure third-party depository specializing in physical precious metal storage.
Some companies advertise no account maintenance fees for storage and insurance of gold IRAs; however, such costs typically arise through custodianship or depository agreements. It is wise to be fully informed before making any definitive decisions regarding a gold IRA.
Use your IRA funds to purchase physical precious metals through Monex by opening an account with one of our recommended Trustee/Custodians, then designating your Monex account as the IRA owner. Get started now – contact a Monex account representative now!