When investing in physical gold within an IRA, the IRS requires that your precious metals be held by an independent custodian. Anytime before retirement or upon taking distributions is considered a taxable event and subject to a 10% penalty.
Self-directed IRAs (SD IRAs) allow investors to invest in gold bullion, bars and coins eligible for investment by opening one with a custodian who specializes in precious metals. For more information, request your complimentary information kit now.
Taxes
Before making decisions regarding the gold allocation in your IRA, it’s essential that you understand its tax rules. According to IRS requirements, physical metals purchased for investment purposes in an IRA must meet certain purity standards and be stored securely at an approved depository to prevent unauthorised access or theft. You can only buy physical gold and silver investments if your trustee/custodian allows such purchases and has the means for secure storage solutions.
Gold investment is most often undertaken to diversify one’s portfolio and protect against stock market overexposure, economic downturns and inflation. To minimize human error when making this move, it’s advisable to work with a reliable Gold IRA company who offer institution-to-institution rollovers so as not to run afoul of IRS regulations and incur penalties when moving funds between accounts.
Fees
When investing in physical gold, look for a company with competitive pricing on precious metal purchases without charging excessive ancillary fees. Furthermore, look for one with excellent customer service and allows you to track the status of your holdings online.
Gold offers diversification and inflation protection as a smart financial move, while also being used as a tax deferral strategy.
Those looking to add gold to their retirement portfolio should first verify if their IRA custodian allows for such investments. If not, self-directed SIMPLE IRAs provide services which enable investors to purchase physical gold and other precious metals; or paper gold investments like mutual funds and ETFs could be more suitable alternatives.
Purity
People purchase health, life and car insurance policies to protect against financial risk associated with illness, death or disasters. IRAs provide another form of financial security against negative events which might otherwise erode retirement savings and leave retirees struggling in old age.
As the first step of investing in gold, make sure your IRA custodian allows physical investments of precious metals. To do this, find an IRA custodian who accepts self-directed IRAs and gives access to physical markets through their platform. In addition, make sure you understand all types of gold IRA investments available.
Investors should seek out companies offering unallocated gold, in which an account owner owns only a percentage of an unallocated bar in a vault rather than individual bars. This will save on storage fees which could run $100-150 annually depending on your custodian; and provides investors with protection from inflation and currency debasement while simultaneously minimising stock market exposure. This type of gold IRA may also reduce stock market exposure while protecting them from stock market risks such as currency debasement.
Storage
Gold IRAs differ from traditional IRA accounts in that they require special custodians who can manage documentation and report for tax purposes. American Bullion has expertise in this area and offers various metals stored at IRS-approved depository locations, along with an account manager who can assist investors with their investments needs.
This company’s IRA service fees may be on the higher side, but their pricing and educational resources make them highly competitive. Furthermore, new customers receive special perks like waived first-year fees and free shipping.
Keep in mind that keeping physical gold in an IRA at home would constitute a distribution and be subject to taxes and penalties; however, keeping IRA-owned gold stored safely could be beneficial provided there’s an adequate storage facility that ensures its safety.