Precious metals offer an effective way to diversify your retirement account. But before investing, it is crucial that you understand what the IRS allows and disallows before pursuing this avenue of investing.
Gold IRA companies often provide various advantages, including price matching guarantees, free shipping and secure storage facilities with insurance protection. But be wary of hidden fees or potential considerations.
1. Select a Custodian
If you want to diversify your retirement portfolio with precious metals, the first step should be finding a custodian who specializes in this area. Most financial institutions that provide self-directed IRA services possess substantial expertise managing self-directed IRAs as well as knowing the risks and potential returns associated with various investment options.
Your potential IRA custodian should also have a firm grasp on IRS regulations, so it’s advisable to verify their credentials through state regulatory bodies and industry associations.
The best gold IRA custodians are those that provide a diverse range of alternative investments and partner with reliable companies that can assist with purchasing gold at fair prices. Some offer price match guarantees or online account management while some even provide storage/insurance in IRS-approved depository facilities for your assets. Furthermore, they should have lower fees than other custodians such as trading commissions or load-based mutual fund fees so as to help keep more of your hard-earned funds within your account longer.
2. Open an IRA
Gold IRAs offer an effective way to diversify your retirement portfolio through physical metal purchases. Gold IRAs have long been touted as a potential hedge against inflation and stock market volatility; but they also come equipped with all of the tax benefits associated with traditional IRAs – tax-deferred growth with penalty-free withdrawals at age 59.5.
While gold IRA fees vary between providers, they’re generally higher than traditional IRA fees. This may include one-time account setup and annual custodian fees as well as storage and insurance costs. Some companies even charge markup fees when you buy metals for your account, which could add up significantly over time.
Make sure your chosen company provides clear fees and an easy path for opening an account. Compare educational resources, customer service levels and minimum investment requirements before making your choice – Madison Trust for example provides an easy six-step process and works directly with FideliTrade and Delaware Depository to secure the best prices for IRA metals purchases.
3. Select a Depository
Gold has long been seen as an attractive investment option due to its relative stability during economic downturns and has also long served as a hedge against inflation and an alternative form of currency.
To buy gold in an IRA, it will require opening a self-directed account with a custodian that supports self-directed investments and selecting a depository whose fees vary accordingly. When searching for storage solutions it is wise to do some research first before making your choice.
Be wary of any depository that claims not to charge annual, storage and insurance fees as these will likely be passed onto your IRA account. Also be mindful that it’s against IRS rules to store precious metals at home; speak to the custodian you work with regarding what types of IRA-approved metals they offer and their fineness levels that meet these guidelines.
4. Buy Gold
Gold can be an excellent investment choice to protect yourself from inflation or diversify retirement savings, but be wary of any fees that might be involved with purchasing precious metals.
These fees may include an initial account setup fee, custodian maintenance fees and storage costs. Furthermore, dealers may impose an additional markup when selling gold to buyers.
Self-directed IRAs (individual Retirement Accounts, or IRAs) allow investors to invest in alternative assets such as precious metals without incurring fees from custodians that don’t offer this feature. In order to establish one for yourself, however, you will first need to select an institution offering this feature and select your custodian accordingly.
Once approved by your custodian, it’s important to locate an approved precious metals dealer. When doing so, ensure they possess all of the appropriate licenses, registrations and insurance in order to protect your investment. After finding such a dealer, your custodian will send funds directly to the dealer in order for him or her to purchase gold or other precious metals on your behalf and store it at an approved depository that charges storage fees.