Investing in precious metals is a great way to diversify your retirement portfolio and protect your savings from inflation. But before you jump into a Precious Metal IRA, it's important to understand the rules and regulations that govern these investments. Gold, silver, platinum, and palladium must meet certain fineness requirements in order to be held in an IRA. These metals must have a purity of 99.5% for gold, 99.9% for silver, 99 or 95% for platinum and palladium respectively.
The ingots, cartridges and coins must be produced by a refinery. Certain coins, such as the South African Krugerrand and pre-1965 US silver coins, are not fine enough to be held in an IRA. Precious metals are believed to offer some type of insurance against damage caused by inflation, since commodity prices generally rise during inflationary periods. Gold is also a negotiable medium of exchange, even if paper money loses its value due to some catastrophic event. You can buy gold coins and ingots made of gold, silver, palladium and other precious metals that meet certain fineness requirements with your IRA. When you choose to invest in precious metals with your IRA, your depositary will buy the metals on your behalf and organize delivery to a third-party depositary that specializes in the protection of precious metals.
It's important to note that those who want to continue increasing their retirement funds could lose money if they own too many precious metals. If you accept in-kind distributions, you'll have to sell your metals quickly or have cash to pay the taxes you owe on the precious metals sent to you. There may also be costs associated with storing precious metals, as well as settlement fees and transfer costs. The depositary will give you a quote and, with your permission, will deduct the money from the IRA to pay for the purchase of the metal. Unlike withdrawing funds from a traditional retirement account, withdrawing them from a precious metals IRA allows you to keep a powerful physical asset, gold (or other precious metals), which you can keep, sell at a later time, use as a currency in times of crisis, or pass on to future generations.
You can receive distributions from your IRA in the form of physical gold, silver, platinum, or palladium. Precious-metal IRAs generally only make sense if you have a strong portfolio and want to diversify your investments by reserving a small portion for physical gold, silver, platinum, or palladium. Maximize your retirement strategy, better avoid tax penalties, and take advantage of everything else a gold-backed IRA can offer with these easy-to-understand guidelines for gold IRAs. As with any early distribution of an IRA, taking physical possession with a full or partial distribution of your precious metals can result in taxes and penalties, unless they are transferred to another qualified custodian. Holding precious metals in a self-directed IRA is a credible way to diversify your investments and, at the same time, receive significant tax exemptions - a win-win proposition. While IRAs were once limited to holding American Eagle gold and silver coins, today IRAs can invest in gold, silver, palladium and platinum ingots and coins allowed by the IRS.
Many people know about IRAs but fewer realize that an IRA can buy precious metals such as gold, silver, platinum and palladium ingots in the form of coins and palladium ingots. Precious metals invested in a self-directed IRA must be stored in an approved repository such as the Delaware Depository. Opening a self-directed IRA and investing in precious metals is a little more complicated than opening a traditional IRA or Roth IRA.
