Gold can be an advantageous addition to a retirement account during times of high inflation. But before investing in physical gold or a precious metals mutual fund, several key considerations need to be met first.
An Individual Retirement Account (IRA) can give you more investment choices and tax benefits when saving for retirement, but how do you put money in an IRA?
How to do it
Gold investment into an IRA should be a straightforward and effortless experience. First, locate an IRS-approved precious metals dealer who sells coins and bullion. Next, identify a custodian who works closely with that dealer who can facilitate your transfer funds into your new account.
Most precious metal dealers work with premier custodians and offer this service as part of their package. Additionally, some provide an investment dashboard so that investors can monitor their gold investments more closely.
Once your physical assets have been placed into an IRA-approved depository, you’re ready to claim tax benefits. When considering either a traditional or Roth gold IRA as an investment option, make sure you consult with an accountant or fee-based financial planner who can help determine if this is indeed the best choice for your budget and goals.
Taxes
Gold IRAs may be an attractive investment choice for some investors, though it should be discussed with legal, tax and financial advisors beforehand to assess their suitability as part of an overall investment plan and portfolio strategy.
Like with any retirement account, withdrawals from an IRA require tax payments when taken out – including a 10% penalty if distributed before age 59 1/2.
Storage fees are another cost associated with investing in a gold IRA, typically charged by the depository that houses your precious metals or by your insurance provider. Furthermore, should you opt to take your required minimum distributions in physical form (coins and bars), you will incur shipping costs. Furthermore, some gold IRA companies charge buyback fees. Ensure you inquire beforehand.
Borrowing from your IRA
A gold IRA is an investment account that allows you to buy and store physical precious metals like coins or bullion. If you’re concerned about currency collapse, this might be a suitable way of diversifying your investments; however, keep in mind that this type of account doesn’t offer the same opportunities.
If you want to invest in gold via an IRA, a custodian that allows this and provides storage services is required. These companies typically charge fees, although these tend to be significantly less costly than brokerage firms dealing with securities markets. Furthermore, your precious metals will be insured and stored safely until retirement age and easily transferred onto beneficiaries upon reaching retirement age.
Insurance
Individual Retirement Accounts (IRAs) provide tax breaks for retirement savings. Although IRAs aren’t the only way to save, they’re incredibly popular because employers don’t need to match your contributions as with workplace 401(k) plans like a 401(k). You can open either traditional or Roth IRAs.
If you own or run a small business or are self-employed, SEP or SIMPLE IRAs are easy to set up as workplace retirement plans for yourself and any employees you employ.
Once you open an IRA, your money can be invested in stocks, bonds, mutual funds and other assets to reduce risk and make the most of their investments dollars. You have two ways of investing your IRA funds: you can do it yourself or work with an online broker/robo-advisor who selects low-cost and risk-appropriate investments; otherwise if you withdraw before age 59 1/2 you must pay both taxes and penalties.
