Gold IRAs work like traditional IRAs but allow investors to store precious metals instead of stocks or mutual funds – providing both tax deferment and protection from inflation.
However, investing in gold IRAs comes with fees that could eat into your investment return over time, including storage charges, insurance premiums and management charges.
Taxes
Gold differs from stocks or mutual funds in that its purchase and holding in an IRA isn’t subject to tax, while taxes do apply when withdrawing precious metals from it.
Due to IRS regulations, precious metals are considered collectibles and taxed at their individual marginal rates. Therefore, it’s crucial that investors pay attention to deadlines and consult a professional tax advisor in order to comply with all IRS regulations and file paperwork correctly.
Gold IRAs are self-directed individual retirement accounts that allow investors to invest in physical gold and other precious metals as a form of inflation protection and economic uncertainty hedge. Operating similarly to traditional IRAs, a gold IRA offers many benefits; including being an effective tool against inflationary and economic instability.
Investors can choose from various gold investment vehicles, including coins and bullion. All investments are stored safely at a depository with insurance provided for each investment; investors should take note of storage fees as these may vary between companies.
Fees
When considering using a gold IRA for retirement savings, make sure you conduct sufficient research into all fees that apply. These could include an initial setup fee, annual custodian/asset maintenance fees as well as storage costs associated with physical precious metal storage costs.
fees vary across companies and can be scaled or flat-rated; it’s essential that you understand how they affect your account. If you plan on frequently purchasing and selling gold, look for companies offering low transaction fees.
Keep in mind that gold IRA companies do not act as investment advisers, so before making any major decisions it is recommended to consult a financial professional first. Companies offering these accounts do provide plenty of investor information online however. Blueprint suggests avoiding companies which serve both precious metal dealer and custodian roles as this could compromise their fiduciary obligations to you.
Rollovers
Gold IRA companies usually assist you in rolling over funds from another retirement account to your new gold IRA account, such as traditional or Roth IRA, 403(b), SEP IRA, SIMPLE IRA or Thrift Savings Plan.
Rollovers are important, because if you withdraw assets prior to reaching age 59 1/2, they’ll incur income tax and perhaps a 10% early withdrawal penalty. By having a gold IRA company handle your transactions instead, these penalties can be avoided.
Importantly, these companies should not act in an advisory capacity or provide investment recommendations; rather, they serve as dealers who don’t hold fiduciary responsibilities like certified financial planners do. Thus, you should only work with trusted providers who possess all required licenses, registrations, insurance policies, bonds and custodial services that have been approved by the IRS; also ensure they only sell IRA-eligible gold and silver bullion bullion products.
Storage
Gold IRAs may require that physical precious metals are stored at an independent depository rather than your home or safe, but this shouldn’t prevent investors from considering them. When choosing an offshore storage provider, regional diversification could provide additional tax benefits as well.
Storage fees associated with gold IRAs will depend on both their location and type. You should also factor in insurance costs, and possibly custodial management charges from their custodian.
As you shop around for a gold IRA, look for transparent pricing, competitive buyback policies and excellent customer service. Gramercy Gold stands out by providing white-glove service, top-quality precious metals and impartial educational resources – plus no fees to sell back the gold you already purchased back to them for fees! Definitely consider Gramercy Gold when searching.
