How can I open a silver IRA? Does opening such a precious metal IRA involve a lot of complicated steps or is it a straightforward process with few and easy steps? In today’s article we shall look at how you can go about opening a silver IRA and getting started with investing, so if this his is the information you’ve been looking for, read on till the end to find out more.

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P.S.

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What is a silver IRA?

Most of the IRAs that investors open today allow for them to invest in paper assets. There are, however, some special IRAs known as self-directed IRAs that allow investors to add precious metals to their retirement investment portfolios. Most of the self-directed IRAs are usually named after the dominant asset invested through them.

A silver IRA is, as such, an IRA that allows you to invest in IRS-approved silver, with the intention of earning some money from the appreciation of the value of silver. Like any other type of precious metal IRA, the physical silver bought through a silver IRA is usually stored with an independent IRA custodian, in IRS-approved and insured depository storage.

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How to open a silver IRA in 3 steps?

Opening a silver IRA is not a complex process, but is one that requires the help of experts who understand a few rules that can make all the difference in how easily you set up your account and begin investing. Below are the steps that you can follow to open your account today.

1. Pick your preferred silver IRA company and open a self-directed IRA

You can invest in many non-traditional assets through a self-directed IRA since most of them are not supported by the regular Traditional and Roth IRAs, and 401(k) plans. Most of these other types of IRAs and 401(k) plans only support paper assets such as stocks and bonds which are mostly administered electronically. You can decide to stick to the regular IRAs, or you can switch the self-directed IRAs that offer more freedom in terms of investment choices.

With a self-directed IRA, you can invest in precious metals to protect and grow your wealth by adding physical silver to them. Self-directed IRAs give you the power to decide where and how to invest your IRA funds. All you need to do is visit the website of your preferred company, fill in the account opening forms, and have them contact you.

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The right silver IRA service provider will not only explain to you what to expect in the future as a silver investor but will also direct you on how to choose the best type of silver-based on your financial objectives.

2. Fund your silver IRA

The next step is to fund your account. You will receive the instructions on how to go about this from the company that you’ve chosen as your silver IRA service provider (also known as a silver IRA custodian). Once your silver IRA has been funded, the silver IRA custodian will contact a precious metal dealer of your choice, to purchase the silver that you’d want to be included in your account. Note that you have the freedom to research the recommended precious metal dealer, to ascertain that they are legit and that they have impressive ratings on consumer trust sites.

Simply because a precious metal dealer has been recommended to you does not necessarily mean that you should blindly trust them. As is the case with many other types of investments, opening a silver IRA is a process that will call for you to research the companies that will deal with along the way, to ascertain that they are not only offering legit services but that they are also not overcharging you in any way.

3. Invest in your preferred silver bars or coins

Unlike gold, silver is quite affordable, so you can manage to purchase silver bars and coins, even as a beginner. This does not imply that you pour in all your funds on silver bars and coins. The purpose of opening a silver IRA is to diversify your retirement investment portfolio, so it would beat the purpose of having opened a self-directed IRA only for you to solely invest in silver.

Depending on your retirement investment goals, you can decide to allocate about 5% to 15% of your retirement savings to precious metal investments. If you believe that silver will be the best option for you, then you can purchase the right amount of silver to help you meet your goals.

If you, however, believe that silver alone will not cut it, you can also check out the benefits other precious metals such as gold have to offer, and possibly purchase a few gold coins.

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What happens after your silver has been purchased?

Once your IRA eligible silver has been purchased from a legit precious metal dealer, they are shipped to a safe depository. The depository has to be an IRS-approved depository, so you should do some background research to ascertain that your silver IRA custodian’s depository of choice does not have a history of attempted break-ins.

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Can you roll over the funds in your current IRA/ do a silver IRA rollover?

Yes. If you already have an existing IRA plan, then you can authorize the transfer of those funds to your newly created silver IRA account. To simplify things, you can have the funds transferred from your current IRA to the silver IRA, without you having to handle the funds. Your silver IRA custodian only needs to contact your other custodian for this process to commence, hence eliminating the risk of you having to hold on to your funds, and getting fined by the IRS.

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That’s all for this article in which we have addressed the question, “How can I open a silver IRA.” I hope you got all the answers you needed to get started today. If not, kindly drop your question in the comments section so that I can get back to you ASAP. You can also share your experience as a silver investor, to help those who are still not sure if they will invest in silver see what they can expect.

I wish you well,

Eric, Investor and Team Member at Gold Retired!

What is depository storage? Do you need it to store your precious metals? Are there any rules surrounding the storage of precious metals in depository storage? These are some of the interesting questions that you may be asking yourself about depository storage, and the good news is that you’re in luck because we shall talk about it in today’s article. If you’d like to find out more, then read on till the end.

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P.S.

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What is a depository?

A depository is a facility in which items are deposited for storage, or for the purposes of storage. It can also be an institution such as a savings association or a bank, in which customers can store currency deposits. There are some depositories that exist as institutions that also hold securities and enable customers to trade in securities.

In most cases, depositories offer security to the customers and provide liquidity to the market. The customers who place their items under the care of the institution that is acting as a depository expect that they will get those items back in the same condition upon request.

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More on depositories

As highlighted above, depositories are buildings that allow different consumers and businesses to deposit their funds, securities, or other valuable assets, for them to be kept safely. In most countries, depositories include:

• Banks
• Safehouses
• Vaults
• Financial institutions

Depositories serve different purposes to the public. For starters, they help eliminate the huge risk of an asset owner having to hold the assets by themselves. Banks and other institutions, for instance, allow consumers to deposit funds into well-structured time and demand deposit accounts.

Time deposit accounts are interest-bearing accounts that have specific maturity dates, while demand deposit accounts are designed to hold funds until there is a need to withdraw them, such as what happens with checking or savings accounts.

Customers can also make deposits in the form of securities. Bonds and stocks are two of the most popular securities that you can deposit in a depository. The institutions you deposit your securities in hold them in electronic or book-entry form, or in the form of physical certificates.

Such organizations help to create liquidity in the market. When you, as the customer, give your money to a financial institution such as a bank, you expect that it will hold it for you, and give it to you whenever you need it. The bank may even pay you some interest on the amount that you deposited with them. This is, however, only possible because while holding your money, the bank also lends it to other institutions and individuals in the form of loans or mortgages, and generates more interest.

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Some special functions of depositories

One of the special functions of a depository is in the transference of the ownership of shares from one account to another during the execution of a trade. This function helps with the reduction of paperwork that would otherwise be needed to execute a trade and speeds up the entire process.

A depository also helps investors eliminate the risk of holding their securities in physical form since this would open the possibility of loss through theft, damage, fraud, or delay in delivery.

Investors who also want to buy precious metals can do so by acquiring physical bullion, or paper-based precious metal assets. Once purchased, the precious metal assets can be held in a third-party depository. Note that when you purchase gold futures contracts, that you do not own the gold. The gold is owed to you, and can only be accessed at a specific time in the future, based on the terms and conditions of the contract.

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The different types of depositories

The 3 main types of depositories you can get served by today are:

• Credit unions – these are non-profit firms that are highly focused on the provision of customer services.
• Savings institutions – these are for-profit firms that mainly focus on offering mortgages, but also offer commercial and credit card loans to their customers.
• Commercial banks – these are the largest type of depositories. They accept deposits from customers and use them to offer different types of loans, including mortgages, commercial and real estate loans.

These institutions get their funds from the deposits that their customers make. If the safety of the assets held in a depository is your main concern, worry not, because they are all insured by the Federal Deposit Insurance Corporation (FDIC). The assets are, however, insured up to certain limits. It is advisable for an investor to check the insurance limits of the depository they want to entrust their assets with, just for their own peace of mind.

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Are depositories the same as repositories?

No! depositories are not the same as repositories, as much as the two are often confused for each other. A repository is a place where items are kept for general safekeeping. Unlike a depository, however, the items held in repositories are mostly abstract. You may, for instance, find that data can be kept in a software repository, or a well-structured central location in which are the files are housed. There are different categories of repositories, including those that are used to hold information about:

• Financial services
• Plants and animals
• Human health
• Cars
• Aircraft, etc.

As you can see, depositories are quite important in the lives of investors, who would most likely be struggling to keep off thieves and other potential risks to their valuable assets.

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That will be all for today’s article in which we have looked at what depository storage is all about, and what you stand to gain from such institutions. Let me know if you have any questions about today’s article. Also, let me know whether you have thought about investing in precious metals and whether you’d need help getting started.

I wish you well,

Eric, Investor and Team Member at Gold Retired!

What’s the difference between a 401(k) and an IRA? This is one of the questions that you are bound to ask yourself when you start thinking about your retirement years. Saving for your retirement years is without a doubt one of the best financial strategies, albeit being one that exposes an investor to several risks. Those who take on the challenge to save for the future end up doing so in a 401(k) or an IRA. Today’s article is all about helping you understand the difference between these two articles, and what you can expect when investing through either of them.

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P.S.

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What is a 401(k)?

A 401(k) is essentially a tax-deferred retirement savings account that is offered by employers to their employees. The employees are then expected to contribute funds to this account through an elective salary deferral. This means that a certain percentage of their salary is usually withheld and directed to their 401(k) account.

The money is then deposited in several investments, which are often a collection of mutual funds, that are selected by the sponsor of the account. The funds are selected in such a way that they meet specific risk tolerance, to see to it that the employees on face risk levels that they can stomach. The investments income usually accrues and compounds risk-free.

In recent times, there have been some employers who have started offering Roth 401(k)s. Unlike traditional 401(k)s, the Roth 401(k)s are usually funded with after-tax money, hence are not tax-deductible. The qualified withdrawals are, however, tax-free.

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Employee contributions

The contributions that employees make to their 401(k) accounts are all pre-tax, meaning that the total contributions that one makes annually usually reduce their total taxable by the contribution amount. For instance, if you earn $35,000 and contribute $5000 to your 401(k), then your taxable income will be $30,000.

The total amount of money that one can contribute to their 401(k) differs from one year to the next one, based on IRS policies. For 2020 and 2021, 401(k) account holders can contribute a maximum of $19,500 to their traditional or Roth accounts. Those aged 50 and above also have to make an additional $6,500 which is viewed as a catch-up contribution.

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Individual Retirement Accounts (IRAs)

IRAs are retirement savings that are established by an individual. They can be held by various financial institutions including:

• Brokerage firms
• Investment firms
• Banks

An IRA can be as simple as a savings account or a regular certificate of deposit account that an individual can hold at a local bank. IRAs that are held by brokerage and investment companies provide their owners with more investment options than 401(k)s. Some of these IRAs can hold:

• Stocks
• Bonds
• CDs
• Real Estate

Note that some assets, however valuable, such as art are not permitted for use in IRAs by the IRS. Also, unlike 401(k)s, most IRAs do not permit loans.

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Traditional and Roth IRAs

As is the case with 401(k)s, the contributions made to traditional IRAs are in most cases not usually tax-deductible. The earnings and the returns usually grow tax-free, hence one has to remit their taxes on the withdrawals made during their retirement years.

The contributions made to Roth IRAs are usually made using after-tax dollars. The qualified distributions from Roth IRAs are usually tax-free.

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What are the IRA contribution limits?

The annual contribution limits for IRAs also differ from year to year, depending on the rules set by the IRS. For 2020 and 2021, the traditional and Roth IRA contribution limits are $6,000. People aged 50 and older are also required to make a $1,000 catch-up contribution.

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Is it better to open a 401(k) or an IRA?

The question as to whether you should open a 401(k) or an IRA can best be answered by having an individual specify which features are the most desirable ones to them. Generally, a 401(k) allows individuals to contribute much more money each year, than they can with an IRA. Also, a 401(k) is to a great extent easier to manage for investors who do not want to make the investment decisions, since the investments plan may most likely include mutual funds.

Unfortunately, a 401(k) might have a limited variety of investment choices, depending on the financial provider who is charged with the management of the plan. IRAs, on the other hand, come with many more investment choices, if they are opened with investment firms such as brokers. In addition to that, IRAs allow their owners to hold their money in the IRA savings accounts, which is something that you’re not likely to find with most 401(k)s.

If you want to expand the number of investment opportunities for yourself, you can open a unique IRA known as a Self-Directed IRA. With such an account, you can hold a wider variety of assets, including those that the IRS may not allow in the regular IRAs including:

• Precious metals
• Cryptocurrencies
• Promissory notes

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Is it possible to roll a 401(k) into an IRA without penalty?

Yes. If you have any funds in your 401(k) that you would like to move to your IRA for different reasons such as the opportunity to enjoy a wider variety of investment assets, then this is possible. You will, however, have to stick to the guidelines that are specified by the IRS. If you follow the guidelines, then you can make the contributions without getting penalized. Those who do not follow the set guidelines often huge penalties.

Rolling your 401(k) into an IRA can at times be viewed as being a complex process, but there are service providers who can help simplify the process for you.

Have a look at the recommended companies, below, which can for instance help you roll over your 401(k) into a self-directed IRA that can hold gold and silver, and the others that can hold cryptocurrencies.

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That will be only for this article in which we have discussed the difference between a 401(k) and an IRA is. I hope you found it helpful, and that with the information presented here, you will be in a better position to make a more informed decision about which option you will rely on as you plan for your retirement years. Let me know if you have any questions about this topic, and whether you need any help to decide whether a self-directed IRA is the best option for you.

I wish you well,

Eric, Investor and Team Member at Gold Retired!