How Precious Metals IRAs Work
How do Precious Metals IRAs Work?
Preparing for retirement is a highly individual decision. The IRA, or individual retirement account, is a tool people use to set aside their money for retirement and gain certain tax advantages. There are a variety of IRAs available, but if you want full control it’s best to get a self-directed IRA. That opens up the possibility of investing in unique things like real estate, precious metals, and tax liens.
- Self-Directed IRAs give investors the ability to invest in alternative asset classes such as precious metals.
- Investing in gold as part of an IRA is useful to safeguard other investments, as it often goes up as other investments go down.
- OneGold offers safe, easy, and convenient storage options for those who wish to create a self-directed IRA. Start today by checking out onegold.com/ira and reaching out to one of our trusted partners.
Listen to our podcast with CEO Ken Lewis discussing Precious Metals IRA
How a Self-Directed Precious Metals IRA Works
You may be familiar with a traditional Individual Retirement Account (IRA). IRAs allow you to save for retirement with tax advantages. However, because there are tax savings there are specific rules one must follow. One of these is a withdrawal penalty of 10% for withdrawing funds before age 59 1/2. For diversified investors, the biggest disadvantage is the limited investment options for your portfolio. Regular IRAs usually include stocks, bonds, and other similar investment vehicles like ETFs and mutual funds.
A self-directed IRA, on the other hand, lets you set your own investment vehicles. Self-directed IRAs gives you more freedom to diversify your portfolio. Usually, all gold IRAs, also known as precious metals IRAs, are self-directed, though there may be a few exceptions.
Self-directed IRAs have their advantages and disadvantages, and you should do your research to see if they are right for you.
Can Your IRA Invest In Gold?
The IRS accepts four major investment metals as IRA investments: gold, silver, platinum, and palladium. The IRS does not allow for investment in “collectibles”, though. There are some semi-numismatic products like gold American Eagle proof coins that can be exempt, but the primary emphasis is on bullion value.
Any precious metals have to be either in a coin form accepted by the IRS or produced by a NYMEX or COMEX-approved refinery or national government mint. They also need to meet a certain standard of fineness.
IRAs have to be in the care of a trustee or custodian. Banks, savings and loans, credit unions that have federal insurance and other IRS-approved organizations are all approved trustees. Precious metals owned by someone privately and stored at home or in a safe deposit box are not recognized as part of an IRA.
Reasons to Invest in Gold
Precious metals, and in particular gold, have been traditional hedges against inflation and economic hardship. Gold is used as protection against losses in other asset classes. Investing in gold as part of an IRA is useful as a way to safeguard other investments, as it often goes up as other investments go down.
Learn more: Why is Gold a Safe Haven?
Former U.S. Mint director Edmund C. Moy touched on some of the benefits in an Investopedia interview. “Gold has a 5,000-year history of being a store of value,” he says. “Stocks can go to zero…bonds can default like in Argentina or get big haircuts like in Greece. The value of the dollar has steadily gone down [at certain periods]. But gold will never be worth zero.”
Moy goes on to explain that gold is a useful balancer for an IRA portfolio. Because of the way that gold works as a hedge asset, losses in gold should balance out gains in mutual, stocks, and bonds. The opposite also applies. The portfolio might not grow as quickly as one that invests more in paper assets, but it’s better hedged.
Different investors recommend different amounts of gold or precious metals in an IRA, and most do not recommend placing the majority of IRA assets in precious metals. It’s part of the mix but not the main asset.
Self-directed IRAs allow investment in things like precious metals for a reason: a more diverse group of assets. Being able to tap into precious metals, liens and real estate gives you options and flexibility that a traditional IRA just doesn’t have.
Hear from our CEO, Ken Lewis, at Stansberry Research Conference describes the why, how, and where to purchase precious metals.
OneGold’s market advantage for IRAs as a custodian revolves around pricing and safety. Our premiums and storage fees are low and transparent. You don’t have to wonder about hidden fees or possible outlays that you weren’t expecting.
We also have highly secure facilities for storage, and you get your choice of country and product for your precious metal holdings. We store our precious metals products in secure facilities with stringent access requirements, keeping your assets safe and secure.
OneGold’s convenient web interface allows you easy access to all your holdings as well as new purchase options. Take in the whole picture with our simple and clear dashboard and see how the markets are affecting your precious metals.
Choosing a Custodian
An IRA requires a custodian, and for a self-directed IRA, the precious metals have to be in the care of a trustee as well. Self-directed IRAs may be more flexible, but they are bound by the same rules about custodianship as regular IRAs.
OneGold is qualified as a custodian of precious metal assets for IRA use, and we partner with a range of IRA providers that are qualified custodians as well. We choose the best companies we can because we have to trust them just as much as you do. They are managing assets in our care for you.
Our list of IRA partners gives people more options for precious metals investments. With secure facilities around the world and trusted partners, we offer safe, easy, and convenient storage options for those who wish to create a self-directed IRA.
Start today by checking out our IRA page and reaching out to one of our trusted partners.
- Go to the IRA page and click on one of our partners.
- Sign up for an account with them.
- Follow the instructions on their site to buy precious metals and link your OneGold and IRA accounts.
A guide to investing in gold.
A guide to investing in silver.