Many investors often ask if it is possible to purchase physical gold in their Individual Retirement Account (IRA). Although the IRS does not recognize this specific form of IRA, self-directed IRAs do provide opportunities to invest in precious metals.
Precious metals offer an effective protection against inflation, which erodes purchasing power of traditional currencies. Like other IRAs, gold IRAs require fees associated with setup and annual maintenance as well as storage and insurance costs.
Taxes
Gold IRAs are individual retirement accounts that enable investors to diversify their portfolio with physical precious metals, providing protection from inflation while at the same time diversifying your retirement savings portfolio. Before investing, however, it’s essential that investors consider all fees associated with gold IRAs including annual custodial fees, storage costs and insurance premiums that may arise before making their decision.
Alongside fees, it is equally essential to evaluate a gold IRA company’s reputation. Reputable businesses provide clear fee disclosure information as well as outstanding customer support services.
Tax implications of a gold IRA should also be understood clearly. Like all investments held within an IRA, gains on precious metals held within it are tax deferred until distributed – at which time income taxes are assessed at your marginal tax rate. Furthermore, the IRS requires all gold or precious metals eligible for storage within an IRA be stored at an IRS-approved facility.
Liquidity
Liquidity issues may present themselves when investing in gold IRAs, since storing and insuring precious metals are costly. Furthermore, selling before reaching 70.5 or 72 (when required minimum distributions must be taken) will bring both capital gains taxes as well as ordinary income tax implications.
However, the best gold IRA companies provide competitive pricing and will purchase back your gold when needed. Furthermore, they don’t charge additional fees and provide impartial customer education services. Furthermore, they should boast strong customer service credentials with proven proof.
Investors looking to diversify their retirement portfolio may wish to consider opening a Gold IRA; it’s essential, though, that prior research be completed before investing. Be wary of high-pressure sales tactics or offers that seem too good to be true before selecting an organization which meets IRS guidelines for purchasing, storing and holding precious metals within an IRA account.
Fees
Investing in precious metals isn’t cheap, and gold IRAs tend to incur higher fees than other types of IRA accounts. These fees cover services like storage and insurance of physical gold as well as account maintenance.
Investors seeking to reduce costs associated with holding gold can still gain exposure by investing in stocks of mining companies or an exchange-traded fund (ETF), though such options do not give investors the same sense of security that comes from having physical gold in their possession – something which may help mitigate inflationary pressures or facilitate wealth accumulation.
Augusta Precious Metals has provided thousands of clients with a customer-oriented direct investment experience since 2012. Their focus on transparent pricing and fees ensures customers know exactly how much their transactions cost them, while an Education team and a video library from Harvard-trained economist Delvyn Steele give clients access to insights and guidance.
Security
Consider that when purchasing and owning physical gold, additional fees may apply, such as setting up a new account with your financial institution, annual custodian fees and storage charges – these costs will differ depending on which financial institution is being used to store the asset.
As well as paying fees and paying taxes on metal investments, there is also the risk that they will be stolen or lost – therefore it is wise to protect them with appropriate measures like purchasing insurance and selecting an IRA provider who is reliable.
To purchase physical gold in an IRA, it’s necessary to locate a precious-metals dealer offering an IRA program and working with approved depository partners. Furthermore, you will require a custodian who allows self-directed IRAs, since many standard IRA custodians won’t accept precious metals as assets.