As a small-business owner seeking to add gold to their SIMPLE IRA, there are various options available to them. They should select a custodian who can safely store physical precious metals while adhering to IRS guidelines.
Gold IRA companies often work with established custodians to make it easier for clients to open and maintain an account. Your custodian should also be capable of safely storing metals for you in their depository facility.
1. You Can’t Buy Coins or Bullion
Gold and other precious metals have long been recognized as an investment diversifier, often seen as rising in value during times of economic instability and stock market instability.
But although these investments are available outside an IRA, you cannot buy them directly through your account; rather, a precious metals IRA is required.
These accounts are typically managed by gold IRA companies that offer various services, such as account set-up, the purchase and storage of desired metals, handling any required IRS paperwork and charging annual fees as well as storage and insurance fees for their physical metals held within an IRA.
As such, it’s advisable to choose an experienced and reputable gold IRA company like Oxford’s services that boast superior levels of customer service and transparency, as well as stellar reviews including 4.8 stars on Trustpilot and Google.
2. You Can’t Buy ETFs
IRAs typically cannot invest in collectibles like gold coins and bullion; however, an exception exists under law for precious metals that meet specific purity and other requirements.
Precious metals make an essential addition to any retirement portfolio due to their ability to protect savings from inflation and hold their value over time, providing a buffer from economic instability.
When selecting a gold IRA provider, look for one with transparent fees and offers an array of services. Most providers usually charge a nominal markup when purchasing and selling precious metals as well as storage and insurance fees.
Oxford Asset Management and Goldco are two top-rated precious metals IRA providers, each offering an array of investment options with stellar customer reviews (Oxford has five stars on Trustpilot while Goldco has 4.7 on Google). Both firms can assist in creating self-directed IRAs or rolling over funds from another retirement account to them, as well as purchasing physical gold for your IRA.
3. You Can’t Buy Physical Gold
Gold and other precious metals do not typically exhibit strong correlations with stocks and bonds, providing additional diversification benefits while potentially providing protection from inflation. Adding them to your IRA portfolio could also serve as a hedge against rising costs in retirement.
However, physical gold IRAs can incur substantial fees and expenses. There may be annual account maintenance and storage fees which eat into your returns. Furthermore, you’ll need a trusted custodian who is capable of safely housing your precious metals.
The IRS mandates that your physical gold IRA be stored at an approved depository, rather than being kept at home where storage would constitute a distribution and be subject to taxes and penalties. You can choose to retrieve them from their custodian and sell them off directly – although you will incur a 10% penalty plus income tax if taking possession before age 59-1/2 – thus many investors prefer keeping their precious metals inside an IRA instead.
4. You Can’t Buy a Trust
An investment in precious metals can provide diversification benefits and protection from inflation, but be wary of purchasing physical gold in an IRA – custodial fees could be high and depository restrictions could limit what gold you’d have access to – so always consult an expert before including this strategy into your retirement plan.
For those who want to add gold to their IRAs, there are various options available. Companies typically assist with account setup, purchase of metal and shipment to an approved depository as well as any necessary IRS paperwork filing. Though more costly than traditional or Roth IRAs, Gold IRAs often allow higher contribution limits. In particular they make them ideal for self-employed professionals and business owners looking to maximize contributions.