The IRS has outlined specific rules regarding how physical gold may be held within an IRA account, so you’ll need to locate an independent custodian with experience managing precious metals for storage purposes.
There are various providers offering storage services with various degrees of experience and fees associated with storage solutions; finding the ideal provider depends on your personal goals and needs.
What is an IRA?
An Individual Retirement Account, or IRA, is a type of retirement savings vehicle. Gold IRAs are self-directed accounts specialized in precious metal investments that require investors to open through an entity such as American Bullion or APMEX that specializes in self-directed IRAs (these companies specialize in gold investments).
These custodians charge all the same annual fees associated with traditional IRA custodians, in addition to any specialized fees related to managing and storing physical gold assets. Such fees could include seller markup fees that vary based on dealer; one-time setup fees to establish your IRA with them; as well as storage fees.
As opposed to stocks or bonds, investments held within an IRA do not incur capital gains taxes until you withdraw funds; this can save investors significant capital gains taxes over time. Gold investments provide diversification as well as protection from inflation – its price being uncorrelated with other markets making it an appealing way of diversifying portfolios and protecting against inflation.
What is a Self-Directed IRA?
Self-directed IRAs offer more investment choices and flexibility than the traditional brokerage firm-held IRA. You have greater freedom in selecting assets such as real estate and precious metals to invest in with these accounts.
These assets typically incur higher fees than traditional stocks and ETFs. Furthermore, their valuation may be difficult, making it essential to verify information in your account statements.
As with any tax matter, understanding the rules pertaining to self-directed IRAs is vitally important. Failing to comply with IRS guidelines could incur heavy fines and taxes – something many investors forget when setting up an IRA account for themselves.
Example purchases that cannot be included in an IRA include collectibles or life insurance contracts; real estate that you live in cannot be purchased (other than through an approved IRA trust) nor can any rental property. When selecting your custodian be sure to conduct extensive research first – an excellent resource is this list from IRS of approved IRA custodians.
What is a Self-Directed Custodian?
Self-directed gold IRA custodians will handle the paperwork and reports required by the IRS, but won’t give financial advice or select your metal broker on your behalf. That task must be handled independently by you – although your custodian may have relationships with various Gold IRA providers who could share a list with you.
Precious metals purchased for an Individual Retirement Account must adhere to certain IRS regulations, such as being recognized as legal tender and being available in coin or bar form. They should also not contain other precious metals like silver and should be stored with an IRS-approved depository.
Some gold IRA companies suggest creating an LLC and investing with it as part of an IRA, in order to reduce fees and save costs. Unfortunately, such an arrangement violates IRS rules; should your IRA be found breaching them, penalties could result in severe financial consequences for both yourself and any associated LLC’s. Moreover, its limited tax status renders this route unlikely as an investment vehicle for retirement plans.
What is a Self-Directed Gold Custodian?
Gold custodians are reliable financial institutions that enable you to invest in physical gold and other precious metals. A custodian will hold onto your investment while controlling shipment to and from your depository, maintaining insurance policies and offering customer service. When choosing your custodian it is essential that it demonstrates an extensive track record of compliance with IRS rules and regulations.
Search around to locate a company with low fees, great customer service levels and an outstanding track record – or ask around among friends and family members.
Opening a Precious Metals IRA with a reliable firm shouldn’t be too difficult; many work closely with trusted custodians to ensure an effortless process. Gold can provide an excellent way to diversify your retirement portfolio as the dollar loses purchasing power; it provides a safer alternative than stocks, bonds or mutual funds.
