Gold investment opportunities provide retirement-minded investors with an attractive investment option, but IRAs must go through an authorized custodian for funding, distributions and compliance purposes; furthermore, gold IRAs need an approved depository for storage purposes.
IRS-approved depositories have a reputation for safe vaults and secure storage solutions, with both shared and individual vault options typically offered.
Self-Directed IRAs
Self-directed IRAs give you more control over the selection and deployment of investments than stock market accounts do, including real estate, private equity investments and precious metals.
Alternative investments can provide your clients with much-needed diversification in their portfolios and help them sleep easier when the equity markets become volatile, but it’s important to note they may present certain risks.
First of all, they may be subject to more complex IRS tax rules that differ from traditional IRAs, leading to unintended tax and financial penalty consequences if these investments don’t follow these regulations correctly. Furthermore, these investments typically incur high fees related to both their holding assets as well as custodian fees.
Custodians
A precious metals IRA (commonly referred to as an SDIRA) can be an excellent way to diversify your portfolio, but you should be mindful of certain limitations and tax considerations before investing.
These accounts can be set up as traditional or Roth IRAs, which are funded with pretax dollars, respectively. Furthermore, they may also be transferred over from existing retirement or savings accounts.
An individual retirement account (IRA) can be housed with any of several custodians; however, to maximize returns you should select one offering an array of investment choices including physical precious metal coins and bars as investments. You should compare fees, storage options, educational resources, reputation as well as fees. A good custodian should help you locate a precious metal dealer that meets IRS requirements.
Storage
Gold IRAs (precious metals IRAs) are self-directed retirement accounts that allow you to invest in physical gold, silver and platinum assets instead of paper-based investments. While following traditional IRA rules regarding contribution limits and withdrawals, investing in precious metals IRAs allows you to purchase physical assets instead of paper ones.
Many gold IRA companies charge fees to store and insure your physical gold assets within your account, with costs depending on storage facility type and coverage amount. You may also incur shipping and in-kind transfer charges when taking required minimum distributions (RMDs).
Gold has historically performed well during times of inflation, prompting many investors to view it as a hedge against future inflation. Before investing in a gold IRA – whether traditional, Roth or SEP – one must carefully assess all risks. There are three main types of these accounts.
Insurance
Gold IRA investments offer retirement account holders numerous advantages, including value preservation and inflation protection. Before investing in precious metals eligible for an IRA, investors should consult a financial professional.
Gold and other precious metals tend to move independently of the dollar and economy as a whole, helping you diversify your retirement savings portfolio in times of economic or geopolitical unpredictability.
Traditional Gold IRAs are funded with pretax dollars, meaning any gains accrue tax-free until withdrawal in retirement. Roth Gold IRAs on the other hand, are funded using after-tax dollars so withdrawals are also tax-free.
An IRS-compliant depository must be used for physical gold IRA storage purposes. Many gold investment companies recommend specific custodians or depositories to their clients as the safest solution.
Taxes
Gold and precious metals investments offer many distinct benefits as an investment, including diversification benefits. But they come with special rules – such as needing to hire a custodian and incurring potential fees – making this type of asset management costly for some investors.
Like with other investments held within an IRA, when withdrawing gold you’ll owe taxes. The rate you owe depends on its age and whether or not it qualifies as “old.”
Some gold IRA companies charge additional fees, such as account setup, seller fees and maintenance. It is wise to review these costs prior to selecting your provider. Furthermore, be mindful that these companies typically operate solely as sales outlets without offering investment advice that a fiduciary retirement advisor would offer; this could create potential conflicts of interest.
