Gold has long been seen as an attractive investment asset by retirement savers. It tends to perform well during times of economic unpredictability and volatility, and offers protection from inflation.
The IRS generally disallows Individual Retirement Accounts from investing in collectible metals like gold, but there are exceptions. Eligible gold forms for an IRA investment include bullion bars, coins and proofs.
Purity
Gold bars are an attractive form of precious metal investment for retirement investing, given their limited supply and proven track record of price appreciation over time. Gold bars make an excellent way to add growth and diversification to a portfolio that seeks both.
Gold bars provide an efficient means of owning gold; unlike coins or bullion, which place value on their design or rarity. Gold bars are priced solely according to weight and purity – which makes them more cost-efficient investment vehicles than either coins or bullion.
When purchasing gold bars, be on the lookout for hallmarks indicating their manufacturer and weight. Furthermore, look out for serial numbers as many come with certificates of authenticity and can even be tested using magnets and the ping test – real gold won’t stick to magnets while fake or impure gold may do so.
If you are considering opening a gold IRA, please consult with a precious metals expert in order to ensure your investment meets IRS regulations and is supported by an outstanding customer support team. Choose a company with excellent credentials.
Legality
Keep in mind that physical gold does not generate income and therefore cannot take advantage of an IRA’s tax-deferred status, so it is vital to partner with an expert who can manage all aspects of account setup and investment on your behalf.
IRS rules allow IRAs to invest in bullion coins and bars as long as they meet certain purity standards, though only depository or storage facilities can hold these items physically – taking possession directly violates IRS rules, potentially incurring taxes and penalties; rolling assets over to another custodian would be recommended as the solution.
Gold must meet certain purity standards set by the London Bullion Market Association in order to be an eligible asset in an IRA account. In addition, investors should select a company known for ethical practices and producing quality products.
Taxes
Gold IRAs can be an excellent way to diversify your retirement portfolio and protect savings against inflation, but it is important to understand all associated taxes before making your decision. One significant tax associated with a gold IRA is its 10% penalty fee for withdrawing before age 60.
Custodian fees, or charges levied by an institution to manage an IRA account, can also be tax-related and vary widely – these costs will depend on which custodian you use and their exact terms and fees will vary accordingly.
To circumvent these fees, many investors choose a self-directed IRA. With such an account, investors can invest in precious metals as well as stocks and bonds; but must ensure they purchase IRS-approved metals that meet specific purity standards; collectible coins are not eligible for use with an IRA account – instead they should contact a precious metals custodian that specializes in Gold IRAs for safekeeping purposes.
Storage
Some precious metals dealers advertise home storage gold IRAs to attract customers, yet this storage method contravenes IRS regulations. When you purchase physical gold with your IRA funds and store it at home or bank safe deposit box, the IRS considers this distribution which triggers tax penalties.
To minimize risk, choose a trusted company offering secure and insured storage. Also be mindful of storage fees before making a decision and compare fees between different providers before making your selection. Finally, go for one with excellent customer support that has a proven track record and outstanding reputation. Self-Directed IRAs managed by reliable custodians are safer and more convenient ways of owning physical gold than home storage; providing more options for diversification, tax benefits and purity restrictions that would otherwise exist; however they still require full responsibility on behalf of account holders for protecting their investments and keeping records accurate.
