What does ira approved silver mean? In today’s post, I shall take you through this interesting topic, with the hope that you will be better placed to figure out your way in the investment industry, with the information presented herein. Without further ado, let’s get right into it.
What is IRS Approved Silver?
The IRS has made it possible for those who are headed into their retirement years to use Individual Retirement Accounts to invest in precious metals such as silver. This, however, does not imply that any type of silver can be placed in an IRA. There are set requirements on the type of silver that you should include in your IRA. It is expected that you will meet these requirements, failure to which, you risk being at loggerheads with the IRS, which as we know is not a good thing. Let’s first take a look at what a silver IRA is so that we can further explore what type of silver can be referred to as IRA-approved.
What is a Silver IRA?
A silver IRA is essentially a special type of individual retirement account that allows investors to invest in a wide variety of their preferred eligible silver products ( coins and bars). The rules governing the Silver IRAs are similar to those of regular IRAs, with the only difference being that while with a silver IRA you are allowed to add silver, gold, and other precious metals to your account, regular IRAs only allow you to invest in paper assets.
Silver IRAs are a great option for those who are out to diversify their retirement investment portfolio, though there are several upsides and downsides that one must understand before whipping out their checkbook to purchase IRA-approved silver.
A silver IRA is a self-directed IRA
A silver IRA is a type of self-directed IRA. Most people only know about traditional IRAs & Roth IRAs that can be opened through brokerage firms, and that allows investors to invest in assets such as stocks, bonds, and mutual funds (referred to as paper assets).
There is a less familiar IRA option referred to as a self-directed IRA, which offers similar tax benefits to the Traditional and Roth IRAs, with the difference being that self-directed IRAs are managed differently – the owner of the account gets to manage their investments. This essentially means that you are not restricted to the type of investments that you can add to your account and that you can choose what makes its way into the account. With a self-directed IRA, the options are very broad, and they include assets that are tangible. The most common ones include:
- Real estate
- Businesses /startups
- Precious metals e.g. gold, silver, platinum, and palladium.
A silver IRA is therefore a self-directed IRA that has some type of silver investment held in it.
What are the IRS requirements for Silver?
As you may already know, the IRS is quite strict when it comes to the setting and enforcing of requirements from investors. Failing to abide by the rules set by the IRS, regardless of the perception you hold about taxes, may destabilize you financially, and limit your capability to thrive.
In the case of a silver IRA, the IRS allows the account owner to hold silver as a retirement investment asset within their account while achieving the tax benefits that come with such accounts. This presents the investors with an opportunity to create and accumulate retirement wealth on either a tax-free or tax-deferred basis.
Below are some of the top requirements laid out by the IRS with regards to silver held in an IRA:
- The silver held in a silver IRA should meet set purity standards, which highlight that all silver products held within the retirement account must meet the 0.999 (or more) purity grade. This simply means that the silver should be 0.999% pure.
- The account owner is required to store the silver they purchase in IRS-approved depositories. A depository is a safe storage facility in which precious metals are held. In most cases, the silver IRA custodians usually partner with silver bullion dealers and precious metal depositories, to make the process of opening silver IRAs more seamless.
- You must appoint a qualified custodian to be the trustee of your account. The custodian is charged with overseeing your silver IRA, to ensure that you meet the rules and requirements set for self-directed IRAs.
As already highlighted, you cannot purchase any type of silver in place in your silver IRA. Let’s take a look at the IRA-approved silver coins and bars that are worth considering as soon as you open a silver IRA.
IRA-Approved Silver Coins
- American Silver Eagle
- Canadian Silver Maple Leaf
- Silver Peace Dollar
- Mexican Silver Libertad
- Austrian Silver Vienna Philharmonic
- Australian Silver Koala
- Australian Silver Lunar
In addition to the above-listed coins, there are many other silver coins that all meet the purity requirements, and that are all manufactured by government mints, hence are IRA-eligible. The one thing I can caution you about, however, is that if you are looking for silver coins to purchase for your IRA, then you should be sure to purchase the right products. Stay away from numismatics, commemoratives, as well as collector coins, as they’re ineligible for use in IRA investments.
IRA-approved silver bars
If you come across any bar that does not fall short of the minimum purity requirements and is either manufactured in a widely-recognized refinery or assayer ( COMEX or NYMEX), then you can purchase it for use in your silver IRA.
Some of the common IRA-approved silver bullion include:
- Walking Liberty Silver Bar
- Johnson Matthey Silver Bar
- OPM Silver Bars
- 10 oz Sunshine Silver Bar
- PAMP Suisse Silver Bars
- A-Mark Silver Bars
Note that you can get yourself a free silver IRA guide from my #1 recommendation (the link below) to help you get the full picture of what is restricted or allowed for use in a silver IRA.
Frequently Asked Questions on “ IRA Approved Silver”
1. What types of silver should I not include in my silver IRA?
Although many people already have access to silver and a wide variety of silver products, not all of them can be added to a silver IRA. Some exclusions of the silver products to stay away from include:
- Pre-owned silver – you cannot take the silver coins or bars that you already own and hold outside of your silver IRA, and put them in a newly-opened silver IRA.
- Certified silver that is sourced from third-party grading services.
Generally, most of the silver that’s manufactured in many parts of the world does not meet the purity requirements. Investors are, as such, required to confirm that their silver is sourced from approved refiners or mints if they intend to use it in a silver IRA.
2. What are the benefits of owning IRA-approved silver?
As an investor who wants to get into investing in silver, you stand to gain these main benefits:
- You can hedge against the record-breaking inflation and economic volatility.
- Diversifying your portfolio
3. Are there any downsides to owning IRA-approved silver?
Yes. The two main ones include:
- Your returns may be restricted to capital gains
- You must hold your silver through an IRS-approved custodian.
4. How can I know that the silver I purchased for my silver IRA is IRA-approved?
For starters, you need to get a silver IRA guide (check the recommended solutions within the article or reach out to me for help) to help you understand what to expect from the get-go, as a silver investor. The guide will offer the knowledge required to select the right silver products for your IRA, based on your financial goals. Beyond that, if you work with a reliable custodian, they will point you to a reliable bullion dealer, who will sell the right silver products for use in a silver IRA.
Also check out some of our other related posts on subjects like self-directed IRAs, rollovers, etc:
Also read: What is a 401(k) to gold IRA rollover?
That will be all for this article in which I have addressed the question: “what does IRA-approved silver mean?” I hope you found it helpful, and that it will help you get the right starting point as a silver investor. Let me know if you have any questions concerning today’s topic, or any experiences to share as a silver IRA owner.
I wish you much success!
Eric, Investor and Team Member at Gold Retired!