Affiliate Disclosure: The owners of this website may be paid to recommend the following companies: Goldco, Augusta Precious Metals, Noble Gold Investments, and Birch Gold. The content on this website, including any positive reviews of the mentioned companies, and other reviews, may not be neutral or independent.
Precious Metals IRA Account. Did you know that you can easily set up an IRA account that holds precious metals? Most people are aware of the tax advantages of Individual Retirement Accounts (IRAs) and 401(k)s, but don’t realize how easy it is to include gold, silver, platinum, or palladium bullion in their accounts. In fact, precious metals provide some additional benefits as well that you may not be aware of.
A precious metals IRA allows you to make contributions with pre-tax dollars
You make contributions to your precious metals IRA account with pre-tax dollars—dollars that would have been paid to the government in taxes if you had not contributed them. (Of course, it’s important to remember that you’ll need to pay taxes on any returns that your investment generates.) When considering a precious metals IRA, here are some of things to consider: A precious metals IRAs incur penalties for early withdrawals: You must be at least 59 1⁄2 years old before you can withdraw from a precious metals IRA without penalty. If you plan on making withdrawals before then, it’s wise to use a Roth rather than traditional account.
A precious metals IRA account must be with a US bank or broker: A precious metals IRA is held at a US bank or broker, which must meet strict guidelines. Some brokerage firms may not offer an IRAs that allow you to hold any type of investment, let alone precious metals—be sure to ask your broker or financial adviser if they offer these accounts. Setting up an account: Getting started with a precious metals IRA is simple. You’ll need to fill out an application form and provide some basic information, such as contact details and investment preferences. While most banks do require that you have money on deposit before opening your account, some don’t have minimum balances; others do require amounts from $5k-$50k depending on your needs.
Your metals can be stored by your custodian: In most cases, you’re able to hold precious metals in a precious metals IRA account with your bank or broker. You have complete flexibility in terms of what you invest in; if gold is soaring, for example, and platinum is low, you can choose to invest more heavily in gold. On top of that, banks often offer other features such as storage or insurance on your metals at an additional cost—it’s important to decide whether or not these are worth it for you before opening an account. Precious metals IRAs may sound like something out of a sci-fi movie, but they really do exist! So if you’ve been wondering what they are and how they work, hopefully we’ve answered all your questions.
Precious Metals IRA Account
You can rollover your 401(k) plan into a precious metals gold or silver IRA
A precious metals (PM) 401(k) is a safe and secure way to invest in physical gold or silver. It gives you a portion of your retirement savings which you can use to buy PM products. Precious metals are important if you want to protect yourself from inflation, market fluctuations, currency devaluation, and political instability as well as to diversify your investments for maximum profit potential. Precious metals have been used throughout history as a store of value and continue to be used today because they offer value in all economic conditions—one of their most attractive features. When people purchase physical gold or silver, they buy it for safety, security, and dependability; therefore buying precious metals through an IRA allows investors peace of mind that their money is protected from sudden market changes.
To open a precious metals gold or silver Individual Retirement Account (IRA), you need to first set up an account with a custodian and then contact your current plan administrator. Many of them now offer precious metals IRAs as well, which are much easier to open. You will then provide paperwork for your custodian that is needed to perform an IRS-approved rollover from your existing plan into a precious metals gold or silver IRA. The last step is securing insurance that protects against theft and accidental loss while on deposit at either a bank or depository in compliance with IRS rules. It is crucial that you have adequate coverage since any gold or silver bullion depreciates if it’s lost, damaged, or stolen.
Precious Metals IRA Account
How are my precious metal investments protected by law?
All precious metal investments are protected under Title II of the Uniform Commercial Code. This means that precious metals investors can feel comfortable knowing that their investments are insured, even in insolvency situations like Lehman Brothers or MF Global. In fact, most broker dealers and custodians will hold your metal in your account as opposed to their own vaults. You won’t even be able to tell where it is if you tried! This way, if they do have any issues with bankruptcy or theft, you still have ownership of your metal at all times.
Do I have to be a certain age to open a precious metals IRA account?: There is no minimum age requirement for opening an IRA, however you must be an adult (18 or older). Children are not allowed to make decisions with their own retirement accounts. If you want your child to invest with you, you will need to do it on their behalf. Do I have to pay taxes when I sell my precious metal investment?: The short answer here is yes. Any time that you take cash out of your account or liquidate one of your assets, they are taxed as income. This means that if selling a gold bar nets $1000, only $850 can go into your bank account and you’ll have to pay taxes on that amount.
Do I have to pay a setup fee?: There are zero fees for setting up a precious metals IRA account, however there may be some associated costs. These could include commissions and storage fees on your investments. You will want to ask your broker or custodian about what their policies are on these charges, and you should also familiarize yourself with any contract you sign so that you don’t have any surprises come tax time. Can my precious metal investment still be protected if I switch companies?: Yes, your precious metal investments can still be protected regardless of whether or not you choose to move companies. If you own an asset and it is properly stored at an accredited facility, then it is protected by law until such time as it is sold back into circulation.
Precious Metals IRA Account
Are there fees involved in opening a precious metal investment account?
In general, most precious metal investment accounts do not charge you an additional fee for setting up an account or adding to it. However, that is not to say that there are no fees involved. In fact, there are definitely some fees associated with certain types of precious metal investments and most companies will be very clear about what those fees are and whether or not they apply. Most companies will typically list these costs on their websites so that you know exactly what you’re getting into when it comes to investing in precious metals as part of your self-directed IRAs.
If you’re looking to invest in precious metals and start a self-directed IRA with a gold, silver or platinum investment account, it is important that you understand all of your investing options and be aware of any fees that apply. To help walk you through all of these details and answer any questions you may have about investing in precious metals as part of your retirement savings, consider consulting with a tax professional before proceeding. It’s also important to note that while many companies do not charge additional fees for setting up an account or adding to it, some companies do. In addition, there are fees associated with both rolling over an existing traditional IRAs into a precious metal investment account as well as closing out certain types of accounts early.
Is there an IRS reporting requirement for precious metal IRAs?
No, precious metal IRAs are exempt from IRS reporting. This means that an account holder does not have to report precious metal investment activity on their tax return. Similar to stocks, bonds and other cash investments, precious metals are classified as collectibles by the IRS and there is no requirement for dealers/brokers to report transactions in these assets or make them publicly available. This exemption also means that most custodians do not allow you to have joint ownership over precious metal IRAs.
Aside from precious metal coins, certain types of bullion such as silver and gold bars can also be held in IRAs. Again, they are not reportable on your tax return when they are held within a retirement account. There are a few exceptions to non-reporting for precious metals: if you plan to store your gold or silver in a safe deposit box at a bank or other storage facility, you will need to report ownership and access through an IRS Form 5754 along with instructions for completing it. Additionally, any fees associated with opening or maintaining an account may have tax implications depending on how much money is being stored and at what kind of interest rate.
The tax code treats precious metal IRAs differently than other IRAs
with a precious metals IRA, you’ll generally invest in coins and bars stored outside of your retirement account—this type of investment is known as physical possession. The Internal Revenue Service (IRS) considers certain investments to be collectibles, which means that they’re subject to special taxes. With a precious metals IRA, these taxes are paid by you (as opposed to being charged to your traditional IRA). That said, precious metal IRAs can still provide tax advantages over traditional retirement accounts if you’re willing to take on some extra responsibility. This added responsibility comes in two parts: recordkeeping and storage. You must keep records detailing when you made an investment in your account and how much it was worth at that time.
Storage is another issue. You’ll need to decide where to store your precious metals, as many financial institutions don’t allow their storage on-site. If you choose to store your gold or silver elsewhere, you must remember that it will need protection from theft and other security risks. Many investors choose to keep their gold at home for convenience. The storage process is similar to a standard safe, with items placed in airtight bags or containers designed specifically for precious metals investing. Keeping these containers safe and away from moisture can also help preserve their value over time. If a lockbox isn’t right for you but you still want maximum protection, find a safety deposit box that offers 24/7 video surveillance as well as temperature and humidity controls.
Where can I open my precious metal IRA account?
There are a handful of companies that offer precious metal IRAs. You can check a full list at places to open an IRA. However, most major precious metal dealers also offer IRAs, so you will likely be able to open your account with them. If your favorite dealer doesn’t have an option for you, they should be able to recommend a company they work with. I personally use two established metals dealers: Augusta and Goldco. Both of these companies are excellent options if you want to get started right away and don’t feel like doing any additional research. Be sure to read reviews online before making any decisions though!