Today we shall look at how to invest in a silver IRA. After having made such a dramatic entry into the new decade it is becoming quite apparent to most investors who were not affected by the 2008 financial crisis that, indeed, unforeseen events can wreak havoc on the economy not only on a global but on a personal level. If you are reading this post, then you may have been thinking about how viable a silver IRA would be in the mitigation of the effects of unpredictable economic trends. Hang in there because I will very soon elaborate on how you can open your silver IRA.
What is a silver IRA?
When the stock market is experiencing unbearable upheavals, some investors seek out investments such as precious metals, which are believed to be excellent long-term choices for the retention of wealth. One of the IRS-approved precious metals that qualify for use for investment purposes through an Individual Retirement Account (IRA) is silver. An IRA that supports the use of silver for retirement investing is referred to as a Silver IRA.
With a Silver IRA, which is a type of self-directed IRA, you can also invest in other assets including real estate, cryptocurrencies, and precious metals (e.g. gold, platinum, and palladium). You may, however, need to confirm with the IRA service provider that the assets you are interested in are supported/allowed.
If you are planning on investing in precious metals as part of, say, your diversification strategy, it may be a good idea to open your IRA with a company that also allows for the investment in other precious metal assets such as gold, so that you can also do within asset class diversification in the future, if need be.
What is a silver IRA rollover?
Before we take a look at how you can start your silver IRA, let me introduce a concept that you may love to hear about if you already have an existing retirement plan ( a 401(k) or regular IRA) – silver IRA rollover. What this simply means is that if you can transfer some or all the funds in your other retirement accounts, into a newly-created silver IRA. You will, as such, not have to worry about having to turn to the savings in your bank account, to fund your silver IRA.
It is possible to do a silver IRA rollover by having your retirement plan custodian transfer your funds directly to the custodian of your newly-opened silver IRA. You can also collect the funds from your retirement plan custodian and ensure that you deposit them into the silver IRA within 60 days, through a process referred to as an indirect rollover.
How to Start a Silver IRA
Opening a silver IRA, which is a self-directed IRA, may be more complicated than opening a regular IRA. If you choose the right IRA service providers, however, you may have an easier time opening the silver IRA altogether. Here is what you’re required to do:
1. Select a reliable self-directed IRA Custodian
Your silver IRA is held by a custodian. Custodians are institutions such as banks, trusts, or other IRS-approved entities that you can turn to if you need to open an IRA. self-directed IRA custodians are, in most cases, unique firms, that are specially structured to oversee alternative asset investments.
2. Choose a precious metal dealer
The next thing you should do is select a reliable precious metal dealer. You will direct your silver IRA custodian to send the funds to the precious metal dealer to buy the silver on your behalf. You might want to check that the precious metal dealer in question belongs to industry-related institutions such as:
- The American Numismatic Association
- Industry Council for Tangible Assets
- Professional Numismatists Guild (PNG)
Your silver IRA custodian may have relationships with certain dealers, so you can simply request them to share with you a list of companies that they perceive as reliable. It is advisable that you also do your own research to ascertain that you are not blindly being led to choose a dealer whose product quality is questionable.
3. Decide on the assets that you will purchase
Depending on your budget and financial needs, you will purchase specific silver products. Note that not all items are allowed for investment purposes in a silver IRA. The IRS requires that all silver products have a minimum fineness of 0.999, for them to be approved for use in this type of IRA.
4. Choose a precious metal depository
The precious metal products that you purchase must, according to the laws stipulated by the IRS, be stored in an approved depository. You can request your custodian to recommend a reliable depository, but you should be sure to select the one that meets the IRS requirements. I’d highly recommend that you choose a depository that has segregated storage and one for which the investors’ assets are covered by a well-recognized insurance firm.
5. Complete the transaction
With a custodian, precious metal dealer, and depository, you can now proceed to complete the purchase. Note that your silver IRA custodian will handle the payment transactions on your behalf. The precious metal dealer will then have the precious metals shipped to the depository of your choice. All that is left of you is to simply track the price of silver in the market to see if you are making any gains. You may also take the time to rebalance your portfolio from time to time so that you can ensure that you are on the right track to achieving your financial objectives.
Frequently Asked Questions on How to Start a Silver IRA
1. Can I open a silver IRA and still hold on to my other retirement plan?
Yes! Individuals are allowed to have more than one retirement plan. You must, however, stick to your total annual contribution requirements as stipulated by the IRS. It would be a good idea to consult with a financial advisor to establish whether it is a good idea to hold more than one retirement plan, based on your retirement financial goals.
2. If I invest in silver through a silver IRA, can I expect to receive the physical precious metals at my residence?
No. As part of the rules set by the IRS, the precious metal dealer must ship your assets to an approved depository. The silver should be held in there until the time comes for you to legally make your IRA withdrawals. Note that if the silver products are sent to your residence before you hit 59 ½ years, then the IRS will view that as a withdrawal and will be coming after you!
3. Can I know that my silver is held in the depository?
Most depositories allow investors to pay them a visit so that they can see and touch their precious metal assets. As an investor, you will also receive accounting and reporting services from your IRA company, and the depository, to show you that the assets are accounted for.
4. How long does it take to roll over an existing retirement plan into a silver IRA?
The length will vary depending on the custodian you choose to work with. It can take anywhere between a few days to a few weeks, depending on the effectiveness of the custodians. It is advisable to do a direct rollover, to ensure that there are no delays because the funds from your former retirement plan are not held up in your account.
That will be all for this article on how to start a silver IRA. I hope that you found it helpful and that it will guide you to safely open a legit silver IRA as soon as you are ready to get started. If you have any questions pertaining to today’s post, then you should not hesitate to drop them in the comments section so that I can get back to you ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!