Precious metals IRAs offer an effective way to diversify your retirement portfolio, but are less liquid than traditional paper assets. Before investing in one, it is important to carefully consider your retirement goals and risk tolerance before deciding if a gold IRA is right for you.
Gold that meets IRS guidelines must be stored in an approved depository, so here we explore these requirements in more depth.
Purity
When investing in gold for an IRA, it’s essential to remember that the IRS requires precious metal bullion to meet certain purity standards – including an average fineness of 99.5% and ability to be verified by an assayer – in order to ensure its authenticity and that your money remains legitimately invested.
When purchasing precious metals IRA coins or bars from dealers who offer low-grade coins or bars, be wary. This could indicate they either don’t know about IRS standards for precious metal IRA metals, or are trying to defraud you.
When searching for an IRA gold provider, look for companies that provide a range of products and have transparent fees. Birch Gold Group clearly states all fees associated with their IRA services on their website, in addition to offering wealth protection kits with invaluable information on the advantages of an IRA-approved gold portfolio and price notifications to assist investors make informed purchasing decisions.
Approval
As part of its guidelines, the IRS stipulates that gold IRA products adhere to specific purity standards. In general, all precious metals approved for an IRA must contain at least 99.5 pure gold (with the exception of Gold American Eagle coins) while eligible bullion bars must come from an accredited refiner.
Silver intended to be put into an IRA must satisfy both purity and minimum fineness requirements established by the IRS, and be produced at a reliable bullion mint. Investors should avoid purchasing coins with high collectability premiums due to their collectability.
Investment of silver through an IRA requires the assistance of a custodian, or trustee, who will assist in setting up a self-directed individual retirement account (SDIRA) holding physical precious metals and other nontraditional assets. For more information about investing in silver through an IRA, request our complimentary Precious Metals IRA Information Kit today – this invaluable resource will help you decide if investing silver for an IRA is best suited to your portfolio.
Taxes
Gold IRAs provide investors with an effective means to diversify their investment portfolio and combat inflation. Before opening one, however, it’s crucial that you understand its tax requirements as these can differ from traditional retirement accounts.
The IRS allows IRA holders to invest in physical precious metals such as coins and bars through an IRA. Approved gold bullion must meet minimum fineness standards set forth by either a national government mint or an accredited refiner/assayer/manufacturer; silver and platinum products also meet this criterion.
Gold may provide a haven during times of economic distress, yet its value remains highly volatile. When investing in precious metals, investors must expect storage fees and shipping costs; should they want to cash out early from their gold IRA, third-party dealers will purchase back at wholesale rates, draining away funds in their IRA.
Storage
When purchasing gold with your IRA, it must be stored in an IRS-approved depository. When selecting the perfect location to store it in, there are various storage options to consider, from segregated to commingled storage – each providing different security features and costs – some offering 24-hour surveillance or timed locks while others providing safe deposit boxes at banks – but you should always consider your individual access needs and investment goals when making this choice.
A precious metals IRA is a self-directed individual retirement account that allows investors to invest in physical gold bars or coins without incurring tax liabilities, either pretax or post-tax funds. A custodian will purchase and store it safely for you.
Be wary of ads promoting home storage of precious metals within an IRA account as this practice is prohibited by IRS rules. Doing so would constitute a distribution and lead to a 37% tax penalty plus 10% early withdrawal fee for early withdrawal fees.
