Gold IRA – What Is A Gold IRA
A gold IRA is a retirement plan option based on the purchase of gold bars, coins or jewelry. One of these accounts can also include other precious metals if you prefer to diversify the account; favorite examples are silver, palladium or platinum. The purpose of a gold backed IRA is to hedge the regular fluctuations of the market against the long term stability of precious metals’ value.
Metals Allowed in a Gold IRA
Only certain types of gold and other metals are permitted as part of this retirement plan option. These restrictions are in place to ensure authenticity of bars and coins. When you’re getting started with a gold backed IRA, you want to make sure you purchase the metal from reputable sources. Three of the most popular types of coins purchased for this kind of plan include:
– American Eagle coins
– Canadian Maple coins
– US Buffalo Gold uncirculated coins
Some of the most recommended types of gold bars include Credit Suisse bars. All of these valuable metal manufacturers also have silver and platinum coins or bars available. Recommended sources for palladium include fabricators accredited by NYMEX/COMEX. At a minimum, physical gold needs to be tested as 0.995+ pure. All of these metal types to include in a retirement plan are determined by the 1997 Tax Payer Relief Act.
Other Gold Options for an IRA
Along with physical gold, your portfolio can also include gold ETFs, stocks or shares in major publicly traded gold mining companies. You can also have more than one gold individual retirement plan if you find it suits your needs. In this case, a broker can be helpful in managing these multiple accounts.
Gold IRA – How Does a Gold IRA Rollover Work?
You can easily roll over any other type of existing retirement plan into a physical gold individual plan. In any case, you have the options to either transfer or roll over your existing assets, and the process is a bit different for each one. Transferring your current retirement plan involves moving your assets directly from one custodian to the next. When making out the initial distribution check, the certified check needs to be transferred directly from the former custodian account to the new IRA.
Rolling over a retirement set of funds involves receiving the funds from your current account and depositing them into your new physical gold account. Doing a rollover requires the deposit to be completed within 60 days, and penalties apply if this deadline is not met. Rolling over to a gold retirement plan can be completed once a year, and these retirement savings have a tax-deferred status.
A gold IRA is a flexible one because you are not required to transfer or roll over all of your current retirement funds into a gold account. Partial transfers can be completed quickly and are a great way to diversify your retirement portfolio. One of these transfers or rollovers also carries relatively low upfront costs to get started.
Gold IRA – Taxes and Fees
One of these plans does not have taxes applied when you roll over or transfer funds to a gold retirement account. The process does have an initial set-up fee that totals about $250 to $300 on average. Many accounts also have a maintenance fee of 1% of the total in the account, and this fee is automatically withdrawn once a year. Some retirement brokers who specialize in gold accounts will waive the set-up fee for new clients. This fee waiver normally applies if you have at least $10,000 in your current retirement accounts.
Physical Gold vs. Gold Holdings
This kind of IRA does not allow you to keep your gold or other metals in your possession. Instead, the bars or coins are held for you at a secure facility. Each of these depositories need to be approved by the Internal Revenue Service, and the metals are required to be kept in this secure vault until you reach the age of 59 and a half. Once you pass this milestone, you can opt to take physical possession of your gold, silver or other metals if you so desire. Doing so once you are beyond this age will not incur any penalties for this option.
The Process of Setting Up a Metals IRA
Setting up one of these retirement account options require a few simple forms for you to fill out, and most brokers allow you to complete them online. Processing all of your information takes about three to five weeks on average, depending on the complexity of your retirement portfolio. Depending on the number of partial transfers or rollovers you want, your retirement broker can answer any specific questions about this time frame.
This type of IRA is considered an advantage in the face of a market subject to fluctuations and a growing national debt. The growing debt is especially troublesome for some types of retirement accounts, and physical precious metals are more secure because they retain good value. The value of the US dollar is also in decline, and gold is considered stable compared to that currency fluctuation. Gold IRA Investing protects your assets.
A gold backed retirement account banks on the increases of gold value per ounce, which continues to increase as the value of the dollar decreases. Gold and other metals also historically increase per ounce during times of economic instability. Compared to gold access in past decades, buying valuable metals is much easier thanks to the ready availability of online gold brokers. If you don’t have excess funds available to build up your existing retirement account, this kind of IRA allows you to invest in gold and increase your retirement funds over time.
An option for getting started with a gold IRA is an all-in-one starter kit available from a reputable broker, and it contains all of the forms and information needed. Before deciding on a specific approach, it’s a good idea to research various brokers who specialize in physical metals as parts of retirement accounts. An online broker will also get you set up with your online account and log in details for managing your new IRA option.
Physical Gold in an IRA
Precious Metals IRA