If you want to add precious metals to your Roth IRA, an approved custodian and depository are required for rollover. They will assist with filling out necessary paperwork as well as oversee the rollover.
Your custodian will purchase approved gold investments for your IRA – these may take the form of coins or bullion.
Precious Metals IRAs
Precious metals IRAs are an excellent way to diversify your retirement portfolio and help protect savings against inflation while offering tax advantages. But as with any significant decisions concerning your assets, it is advisable to consult a financial advisor first.
An investment in precious metals IRA allows you to invest directly in physical gold or other precious metals. However, you must first locate an IRS-approved custodian, dealer and depository who can hold your metal securely until its distribution in-kind distribution occurs.
Next, decide on the kind of metal that best meets your investment objectives. There is a range of choices available from plain rounds and bars to rare coins valued for their rarity or historical importance; just ensure any metal purchased is eligible for inclusion into an IRA and meets IRS purity guidelines.
Self-Directed IRAs
These IRAs allow precious metal investors to store gold, silver and platinum. This form of investing provides diversification while protecting against inflation and market volatility.
Gold investing can be an excellent way to diversify a portfolio, but it’s essential to select a reputable dealer and custodian. Make sure the organization holds all required licenses, insurance policies and certifications from the IRS.
Alternative investments, like gold IRAs, are illiquid and may be difficult to value accurately. To ensure accuracy of information such as prices and asset valuation provided in self-directed IRA account statements, the Securities and Exchange Commission suggests taking measures to independently verify such details as prices or asset values contained therein.
Some clients use their self-directed IRA funds to invest in real estate or private companies that develop and sell investment property. I worked with one client who used her funds from her self-directed IRA to purchase land, then sold homes built on it at substantial profits.
Tax-Free Withdrawals
Gold IRAs provide an effective means of diversifying retirement savings, protecting against inflation, and building wealth. A gold IRA custodian will assist with selecting physical metals that comply with IRS regulations, buying them on your behalf before safely storing them for you.
Gold is an attractive option as its value moves in the opposite direction to stocks, helping to balance your portfolio and protect against economic instability. Furthermore, it serves as a reliable hedge against inflation because its purchasing power has been relatively stable over time compared to many other investments that have experienced value losses over time.
Gold IRAs provide investors with an opportunity to diversify their portfolio with other precious metals and alternative assets such as private equity or real estate, while still benefitting from tax deferral until reaching the five-year test. You should, however, be wary of potential investment fees that come with having one; such as the setup fee, custodian fees and storage fees incurred as a result of setting up your gold-backed IRA.
Custodians
Custodians are entities approved by the IRS to hold IRA funds and assets safely in custody, such as precious metal investments. Banks, credit unions, federally insured banks, savings and loan associations or any other approved by the IRS may act as trustee or custodian under 26 U.S.C 408.
Precious metals in an Individual Retirement Account can take the form of bullion, coins or bars. Bullion refers to uncut and unrefined gold; coins have both numismatic value as well as precious metal content; while bars may be produced by private mints or refineries.
Your IRA may invest in various gold-related mutual funds, ETFs and mining companies depending on its type of account. When selecting a custodian, look for one with extensive experience working with gold IRAs as well as reasonable fees and charges when making comparisons between options.
