Gold or precious metal investments provide investors with a way to diversify their savings. But there are some key points they should keep in mind before taking this path.
Before purchasing metals for investment purposes, ensure they meet IRS regulations and store them with an approved third-party depository. Furthermore, do not store them at home or purchase back at wholesale prices from dealers.
Buying Physical Gold with Your IRA
Gold or precious metals IRAs can make an excellent addition to any retirement portfolio. These accounts follow all of the same regulations as traditional pretax and Roth IRAs, except investors purchase physical gold (coins or bars) directly from dealers and store it with an approved custodian.
Gold IRAs provide many tax benefits over conventional IRAs due to the fact that physical asset growth remains tax-free indefinitely – an advantage which can bring significant tax savings over the long run.
Gold’s history as a store of wealth and safe-haven asset makes investing in it especially attractive, making Gold IRAs ideal for investors seeking tangible investments that have proven value during economic uncertainty. When making any major financial decision, it is wise to carefully research each potential provider; look for transparent pricing structures, competitive purchase and sell back prices, no ancillary fees and excellent customer education programs as an optimal way to open an IRA.
IRA Custodians
Custodians are authorized by the IRS to hold assets for Individual Retirement Accounts (IRA). Most often banks or trust companies serve as custodians; however, private individuals who have been approved can also act as IRA custodians. Custodians do not typically provide investment advice or recommendations; however some fraudsters pretending to be custodians to sell investments on behalf of others or themselves.
Custodians that take client accounts seriously prioritize keeping client accounts compliant with IRS rules and regulations, making sure investors do not invest in prohibited investments such as collectibles or precious metals that could trigger significant penalties and taxes.
When researching custodians, be sure to carefully compare their fees, such as asset holding and set-up charges. When searching for an ideal custodian, find one offering competitive fees without compromising customer service – for this reason STRATA recommends calling the prospective custodian directly so you can speak directly with someone about your decision.
IRA Rollovers
Rollover IRAs not only serve as an inflation hedge but can provide significant tax advantages as well. Gains made through gold investments held within an IRA account are exempt from taxes.
Physical precious metals can be an attractive, less risky alternative investment than stocks and bonds, yet it is wise to weigh the potential risks involved with owning gold such as theft or inability to easily sell at current market prices.
Gold IRA companies typically charge annual fees to cover account maintenance, insurance, and storage of physical precious metals. Furthermore, their account minimums might differ significantly than traditional IRAs.
When selecting an IRA provider, seek one with comprehensive IRA services and can meet your investment goals and financial circumstances. Also ensure they offer eligible precious metals like American Gold Eagle coins minted by the U.S. government and Canadian Palladium Maple Leaf coins made of palladium; otherwise you risk spending your savings on non-qualifying assets that don’t count toward qualifying assets.
Taxes
If you own an IRA, the IRS won’t tax the appreciation of precious metals held within it – which could save thousands in capital gains taxes over time.
Self-directed retirement accounts allow investors to purchase physical gold coins and bullion bars that meet IRS purity standards, along with certain gold-focused mutual funds, exchange-traded funds (ETFs), or shares of gold mining companies. You’ll need a reliable precious metals dealer and custodian that accepts self-directed accounts to buy your investments.
Physical gold will require secure storage. Since IRAs typically don’t cover these valuables, you’ll either need to purchase a fireproof home safe or work with an off-site depository that offers off-site vault services; the costs can quickly add up as your portfolio expands.
