Investing in precious metals can provide your retirement portfolio with a diversified asset base and Augusta Precious Metals is here to assist in making this transition as smooth and safe as possible.
However, one must bear in mind several key rules when using an IRA to store precious metals – one being that the IRS doesn’t permit physical ownership of assets that qualify for an IRA account such as gold and other precious metals.
Many investors opt to add precious metals to their IRA because they believe in the old saying that you shouldn’t put all your eggs in one basket. Placing all your savings in stocks or paper assets puts your financial future in the hands of volatile market forces that could determine whether you can retire comfortably or not.
IRA investments in coins and bullion must typically be treated as in-kind distributions as physical possession is prohibited; however, the IRS permits owners to invest in exchange traded funds that track precious metal prices instead.
These investments are taxed at 28 percent instead of the standard withdrawal rates for IRA withdrawals, although profits from precious metal sales remain taxable upon distribution at retirement age. Therefore, it’s essential that any IRA company you work with carries a strong reputation within their industry and offers products you need for maximum return.
No matter the economic environment, precious metals offer an effective means of diversifying your portfolio or protecting against an economic downturn. But investing in physical gold, silver and platinum requires extra care because of special IRS regulations.
IRS rules state that IRA gold must be stored at an approved depository. Most custodians offering this service usually work with third-party depository facilities that specialize in protecting precious metals; taking direct physical possession would constitute a taxable distribution and be prohibited.
Augusta Precious Metals takes great care in protecting their customers’ assets by only buying approved bullion for IRAs and working with depository storage facilities that have proven they can protect customers’ assets effectively – this helps prevent penalties associated with taking physical possession of your IRA assets and taking physical control.
Gold IRAs are an effective way to preserve purchasing power and hedge against inflation, performing exceptionally during the 1970s stagflation with annualized gains exceeding 30% per annum.
Gold IRAs may hold American Eagle gold coins, Canadian Maple Leaf gold coins and South African Krugerrands; however, these types of precious metals must meet certain size and purity criteria set by the IRS; similarly silver must meet minimum purity thresholds of at least 99.99% while platinum and palladium must reach 99.5% purity to qualify as eligible investments in an IRA.
An IRA requires its gold purchases be stored in an IRS-approved depository, with your precious metals either allocated storage or commingled storage available as options. Commingled storage offers several advantages over allocated storage, including being stored with other metals owned by other account holders in an insured depository; however, this storage method may be less suitable if you require quick access before retirement age arrives.
Investors increasingly look to precious metals as an investment diversifier for their retirement portfolios. Gold was renowned for its performance during the 1970s stagflation period and can serve as a valuable hedge against more volatile paper assets like stocks.
Prior to making any substantial investments in gold bars and coins eligible for an IRA, it is vital that investors understand its rules. IRS regulations stipulate that precious metal investments held within an IRA must be held in physical custody of a trustee or custodian – they cannot be stored at home.
Buyers who purchase and store gold eligible for their IRA in their homes run the risk of having it classified by the IRS as a distribution and subject to taxes and penalties.
Midas Gold Group does not advise any investors who try to bypass IRS regulations by creating an IRA-owned LLC or home storage company as this violates IRS regulations and can cause serious tax complications.