What is a Precious Metals IRA?
Based on your investment goals and objectives, an Individual Retirement Account (IRA) could be an excellent option. Now, based on your preferences, there are different types of investments your IRA can hold. For example, if you’re considering an alternative option, a Precious Metals IRA might fit your goal.
While the common investments for an IRA account include stocks, mutual funds, and bonds, you may not be aware that you have more control over a self-directed IRA. This allows you to choose what you invest in. For example, you can invest in multiple asset classes including precious metals.
Since 1975, individuals have been allowed to invest in gold and silver through self-directed IRAs. Also known as a Precious-Metals IRA, this self-directed IRA account gives you the flexibility to invest in both precious metals and traditional bonds, etc.
There are three major benefits of setting up this type of IRA.
Smart investors avoid taxation and fees by purchasing their gold and silver through a precious metal IRA. Traditional IRAs offer tax deferments until withdrawal. Gold and silver are taxed at the time of purchase, with a precious metal IRA, but avoid any taxes upon withdrawal.
With this type of an investment account, you get to choose the IRA depository, custodian, and your precious metal will be IRS-approved. Your precious metal IRA specialist will help you determine the best investment for your goals, not the other way around.
When economic instability hits, precious metals have a history of increasing in value. Utilizing precious metals for a portion of your retirement investment can serve as a hedge against potential investment risks. Financial experts recommend diversifying your investments, and precious metals provide the protection you might not have expected.
Another benefit of this type of investment account is that you can withdraw bullion and take physical possession thanks to IRA distribution rules.
Put simply, opening, owning, and storing actual precious metals in a self-directed IRA is an excellent way to diversify your investments.
How Do you Open a Self-Directed IRA account?
Precious metals IRAs are relatively easy to set up. The process is straightforward, and here is a brief outline to get you started.
First, keep in mind that whether you are setting up a new IRA account or transferring an existing IRA makes a difference. Your investor might set up a new account for you if you don’t already have one. You can “roll over” an existing IRA, 401k, or retirement account. It’s important to talk to a CPA or tax advisor to figure out what is the best option for your current investments.
Next, you would need to choose an IRA account custodian. Self-directed IRA accounts must be held by an IRA custodian or trust company. These professionals are responsible for opening, setting up, and producing account statements. Orion Metal Exchange can serve as your IRA custodian and help you manage the ins and outs of your IRA.
After choosing your custodian, you can then choose a precious metals dealer. This is one of the greatest benefits of having a self-directed IRA, you can buy precious metals from the dealer of your choice. This allows you to easily shop and compare products and prices.
Once you’ve done that, then it’s time to select bullion products. Keep in mind, there are only specific products eligible for IRA accounts. These bullion products include gold and silver. This can come in the form of coins and gold rounds and bars, but they have to be at least .995 percent minimum fineness. Which metals you choose, however, is yours to make.
Selecting your depository is the next step. Your precious metals must be held in a depository. Your IRA custodian can help you find an approved depository that makes this process easier. Ultimately, however, you can choose which location to store your deposits in.
Finally, once your account is fully set up, you can invest in your precious metals of choice. Your custodian will manage your payments to the dealer, and your precious metals will be safely and securely shipped to the depository.
When you do this through Orion Metal Exchange, you’ll receive periodic account statements that outline your holdings and their wholesale value. You can also liquidate your metals at any time or take a required minimum distribution via bullion.
Get help from our professional team at Orion Metal Exchange to streamline the process and start investing in precious metals.
Common Questions About Precious Metal IRAs
Is there an annual contribution maximum to a Precious Metals IRA?
Yes. If you’re younger than 50 years of age, you can contribute a maximum of $5,000 per year.
Individuals older than 50 can contribute up to $6,000 per year.
What is the determining factor for premiums on gold and silver products?
Premiums fluctuate according to market conditions. Naturally, as demand falls flat, premiums can fall, particularly for secondary market products. Conversely, increased demand leads to an increase in the premiums for precious metals.
How important is purity in precious metal purchases?
Purity is not a top concern for standard precious metal investments. This is because the real value of the product lies in the melted value of the gold and silver purchased. However, for a precious metals IRA, the IRS requires products to be a standard of .995 purity.
Do I have to start withdrawing from my Precious Metals IRA account?
Yes. The government requires you to make a required minimum distribution at the age of 69.5. You can do this through liquidation of your precious metals or in a physical receipt of the metals in your IRA.
If I already have precious metals, can I put them in my Precious Metals IRA account?
The government does not allow you to place your personal precious metals into your IRA. Your metals
must be funded via a bank transfer or put into the account from another IRA.
How is a Precious Metals IRA different from traditional IRAs?
A precious metals IRA allows you to invest in gold, silver, and platinum instead of only stock, bonds, and other investments.
Reach out to Orion Metal Exchange to start investing in precious metals legally, securely, and soundly.