How can I invest in a precious metals IRA? Can I do it legally and safely? Investing in a Precious Metals IRA is a great way to diversify your portfolio while taking advantage of the potential profits that precious metals offer. In today’s uncertain economic climate, it seems prudent for individuals to add gold and other precious metals to their portfolios because they do not correlate with other assets classes. Silver and Gold have been good investments over the long term. But how can one go about investing in a Precious Metals IRA?
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The first step is to find out what your current assets are and how much you have saved already. Shttps://goldretired.com/augusta-precious-metals-review-on-a-no-nonsense-ira-dealerome individuals may wish to roll over their 401K plan into an IRA, while others may simply want to open up an account themselves. If you have a 401K, you will be able to check with the Human Resources department of your place of work and see if they offer an IRA option. You may also open up a new account on your own, which is done through a brokerage house such as Fidelity or Vanguard.
Once you’ve decided whether you want to roll over an existing 401k or open up a new account, you will need to choose between an IRA and/or Roth IRA account.
Individual retirement account
An Individual Retirement Account (IRA) is just what it sounds like: “A Retirement Account for Individuals.” It’s basically a savings account that allows your money to grow tax-deferred until you are ready to take distributions.
A Roth IRA is a special type of Individual Retirement Account (IRA) that earns tax-free investment income and capital gains. The contributions you make can be withdrawn without penalty or taxation at any time for any reason – however, the earnings inside the account may only be removed after five years, and if certain conditions such as retirement are not met.
Now that you have decided on the type of account to open, you will need to contact a precious metals dealer or broker in order to buy physical gold and silver. The investment options for this type of transaction can be split into bullion products (such as bars), coins, and numismatics (collectible items such as rare coins).
Physical Gold and Silver Bullion products such as individual gold and silver bars or rounds, investment-grade gold and silver coins, and World/Ancient types of money, are the most common way to invest in precious metals. They can range from 1 gram all the way up to 1000 ounces. The price is determined by the market price of the metal plus a mark-up called the premium.
Coins are typically graded on their condition, age, size, and content. These attributes determine what type of numismatic coin it is. Also known as collectible coins, these items can vary widely in value due to supply and demand.
Common types of investable coins
Silver Eagles – one-ounce silver bullion coins minted by the US government. These coins feature Adolph A. Weinman’s Walking Liberty design on the obverse and John Mercanti’s heraldic eagle on the reverse side.
U.S. Gold Coins – such as $1 (quarter eagle), $2.5 (half eagle), $3 (three-dollar piece) and $10, $20, and $50 coins minted from 1795 to 1934.
Silver Coins – the most popular being the Morgan Silver Dollar coined from 1878 – 1904. These one-ounce silver bullion coins have a face value of approximately one dollar.
Gold Coins – such as the $20 Saint-Gaudens Gold Double Eagle and the currently minted American Buffalo (Buffalo Nickel) and Canadian Maple Leaf. These one-ounce silver bullion coins have a face value of approximately 10 or 25 U.S. dollars, respectively.
U.S. Paper Money – Early paper money was issued by private companies. Today, they are issued by the US Federal Government under authority granted to it in the Coinage Act of 1965. Commonly known as Federal Reserve Notes, these come in denominations ranging from $1 to $100.
Purchasing a metals IRA is a very straightforward process requiring only 4 steps:
- Choose a Precious Metals Dealer or Broker
- Open an IRA Account with that company
- Have the dealer or broker buy gold and silver for you, either in bulk or individual coins
- Donate your IRA proceeds to the charity of your choice (optional)
It’s important to remember that there are many considerations when choosing a precious metals IRA dealer or broker. You will want to look for one that is reputable, has good customer service, easy shipping terms, and conditions, has fast order processing times, competitive prices with no hidden fees. For example, you can expect charges such as storage, shipping, insurance, and transaction fees. You will also want to ensure that your investment account references your physical assets held by the company in a separate section from its customers’ cash accounts.
The account should further not be included in general company assets, but rather as a blind trust. It’s also crucial that the IRA account is under your name and social security number. You will receive a tax ID or EIN from the dealer or broker, which will be used to open the IRA account. Once this step has been taken you are approved for the IRA, and able to begin making purchases.
Next are additional questions to be answered before deciding which precious metals dealer or broker is best for you:
Does the company have a strong presence in your area? If shipping costs will be involved, it can get expensive very quickly. Having a local dealer that offers in-person services for account opening and maintenance can be extremely beneficial.
See these top-5 Gold & Silver IRA smart solutions for all aspiring gold investors
Can you buy online?
Some companies only offer local and toll-free phone number support with no convenient way to open an IRA with them, like purchasing your metals directly through their website.
What kinds of precious metals do they offer?
Make sure the tax-free trading of physical gold, silver, and platinum is available. Rare coins such as American Gold Eagles, Canadian Maple Leaves, and Austrian Philharmonics are great options to add diversification to your portfolio beyond just straight bullion. Additionally, they may offer metals in form of bars and rounds, but bullion coins will hold their value.
Ready to invest in precious metals through an IRA? Check out the recommended firms below:
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I hope that you now have the answer to the question “How can I invest in a precious metals IRA?”, and that you can make a more informed decision as you open one. Do you still feel that you need some questions related to today’s article answered? Drop them in the comments section, and I will respond to them ASAP. Do not forget to check the recommended precious metal IRA service providers as well.
I wish you well,
Eric, Investor and Team Member at Gold Retired!
Hi Eric. I’m a retired myself and I’m trying to grasp the idea of an IRA account. I understand that previous metals include gold, diver, coins etc , but can the fund also be set up with rare mineral investment . These types of precious metals are starting to boom in the current climate. Many rare metals are needed in the development of batteries, computers and other high tech goods. I thought that these would be a fantastic area to invest in but I’m not sure how to go about it.
You have certainly opened my eyes to the possibility of investing in precious metals, even if the ones I mentioned aren’t viable, Gold and Silver certainly are.
Thank you for your interesting article. Jim
First of all, thank you for your comment!
Agree, if you are interested in rare metals that are needed to invest in battery and such then check out my “stocks menu” on this site. I think you might like the info to be found there.
Thank you again!
Thanking you for a most informative article. I like the idea of investing in precious metals without physically keeping or owning any. To have it on you is simply making you a target, and if it gets stolen there is not much you can do about it, but investing in the metals is to me a safer way to grow your money, and as they say, you can’t go wrong if you invest long term with gold can you?
First of all, thank you for your comment!
Agree completely that it might be smart to invest in gold and silver, especially in these times!