Gold IRA Investments – What an interesting topic? First of all, what’s a self-directed gold IRA, and how do you benefit from this non-traditional investment plan? Well, a self-managed gold IRA (Individual Retirement Account) is simple enough: use the money in your bank account to invest in gold, but direct the investment so it isn’t taxed until retirement. Therefore, tax advantage is the most important part of a self-managed gold IRA. For example, if your retirement money is in a deferred tax retirement account, such as a 401 (k), then you can lawfully transfer that money to your self-directed IRA account tax-free. In simple words, this investment plan enables your retirement savings to grow tax-free. You’ll only be taxed when the money invested is withdrawn.
The Employee Retirement Income Securities Act allows you to direct your contributions into non-traditional investments. However, there are some requirements that need to be met. Firstly, your self-directed IRA should be strictly separated from your personal funds. Again, depending on your account, you might need to appoint a custodian to manage all transactions in your IRA.
The investment market has been very complex and volatile during the past decades. This has forced potential investors to shy away from investing. However, gold IRA accounts have provided the much needed light at the end of the tunnel. Every seasoned investor knows that timing and pricing is everything when it comes to investing. Depending on your gold IRA company, you’ll be able to buy or sell your precious metal instantly. Nowadays, investing in gold is considered by many people as a reliable way to make additional income especially with the uncertainty of the economy. In fact, records from the Securities and Exchange Commission, shows that more than 2% of all IRAs in 2015 were self-directed, and that amounts to about 100 billion US dollars.
Value for Your Money
Moreover, opening a self-managed gold IRA gives you the benefit of maintaining the value for your money. History shows that when the economy starts to fluctuate with uncertainty, gold always tends to rise in price. Unlike other forms of investment like the stock market, gold will never take a nosedive even if the global economy goes down.
What Types of Self-Directed IRAs Exist
1. Financial Institutions
Self-directed gold IRAs are usually offered by large financial institutions (typically those with extensive marketing budget), brokerage firms or companies that sell annuities. However, there’s minimal flexibility. Investors are limited to only financial products offered by that financial institution. This is because financial institutions make profit from selling their financial products, not by allowing you to withdraw money from your IRA account in order to invest in something else such as real estate.
2. Custodian Controlled Self-Directed IRA
This type of self-directed IRA gives investors a wide bandwidth of options than what’s normally provided at a financial institution. With custodian controlled accounts, an administrator insured by FDIC (Federal Deposit Insurance Corporation) will generate their fees with the opening and maintenance of client IRA accounts. Most of these accounts are generally held by the custodian. This allows the investor to invest their funds accordingly.
3. Self-Directed Checkbook IRA
Checkbook Control IRA gives the investor the power to control their funds. Investing funds is as simple as writing a check directly from your “Checkbook Control” self-directed gold IRA bank account. You don’t require prior custodian approval for each investment.
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