Precious metals can provide your retirement savings with protection from devaluation, inflation, geopolitical uncertainty, and currency depreciation – something not available through conventional paper investments.
If you want to add precious metals such as Gold or Silver to your IRA, here are four steps you should follow:
1. Decide on a Custodian
Selecting a self-directed custodian who specializes in precious metals IRAs is of utmost importance, along with choosing one with an excellent Better Business Bureau score and customer service ratings, who has knowledgeable specialists available online or via telephone to answer all of your queries.
Precious metal IRAs tend to cost more than other IRAs because of the setup fees, transaction fees and storage costs that typically accompany these accounts. Before investing in one, it is crucial that you understand these fees before making your decision.
As soon as you decide which dealers you will work with to purchase precious metals for your IRA, the next step should be deciding who you’ll work with to buy precious metals. Many dealers carry an assortment of products; however, not all are approved as an IRA account holder. It is essential that you choose one with experience selling precious metals to IRAs that is familiar with IRS guidelines as well as having great customer service and an efficient ordering process.
2. Select a Dealer
Owners of Individual Retirement Accounts (IRA) must decide what precious metals to purchase for storage in their IRA. Due to IRS restrictions on what products can be stored within an IRA, it’s essential that owners work with dealers who specialize in precious metals and can offer guidance.
Investors looking to diversify their retirement portfolio with precious metals have several options, from individual coins, bars or bullion purchases to ETFs (exchange traded funds). By diversifying with precious metals ETFs (exchange traded funds), investors can counteract any negative correlation between gold and stocks while strengthening defenses against declining dollar values and inflationary pressures.
Once an investment has been completed, the dealer will send the metal directly to a depository for storage. Individual Retirement Account (IRA) holders may opt to take physical possession of their metals before age 72 in order to avoid taxes and penalties; alternatively, working with U.S. Money Reserve could help investors bypass early withdrawal penalties by providing insured, discrete delivery directly to their depository of choice.
3. Set Up an Account
A precious metals IRA is a type of self-directed individual retirement account (IRA) that allows investors to invest in physical precious metals alongside traditional assets like stocks and bonds. By choosing this form of IRA investment, all its advantages can be enjoyed without being constrained by conventional IRA restrictions.
To establish your gold IRA, it’s necessary to open an account with a reliable precious metals dealer. Some dealers also have relationships with custodians and depositories which makes setting everything up easier.
Once you’ve located a dealer, you can choose your products and have them sent directly to your IRA storage location. Some providers offer dedicated storage while others use commingled storage which puts all assets from different IRA holders together in one account. Before choosing one option over the others, be sure to research thoroughly the options available before making your selection.
4. Complete the Transaction
If you are concerned about the dollar’s declining purchasing power, political and financial instability or inflation, a precious metals IRA could be an attractive solution – just be wary of scams and potential traps!
First step to setting up an IRA is finding a dealer who provides IRS-compliant products and meets IRS guidelines. Your IRA custodian may suggest one, or you can select your own. Remember that physical metals must be stored in an approved depository – home storage will not suffice!
Once you’ve selected your dealer, your IRA custodian will manage the purchase and transfer processes, while your dealer will ship precious metals directly to your depository account.
Avoid companies offering “self-storage” IRAs, more commonly referred to as LLC IRAs or home storage IRAs, as this structure is prohibited by the IRS and can pose significant tax risks. Furthermore, tracking investments becomes difficult with such accounts, creating potential avenues for fraudsters.