When it comes to saving and investing our funds for the future, the Individual Retirement Account or IRA is one of the best options to choose. This is a type of investment vehicle that allows the employed individuals to make contributions while they are still earning a taxable income in the form of salaries, wages, bonuses, commissions, service fees, tips, and the like. There are various kinds of investments which the investors may opt to include with his IRA, such as stocks, mutual funds, bonds, and even previous metals. Thus, with an IRA, it is very easy to create a diversification of funds, which is truly ideal in order to build a better investment portfolio.
Investing in Precious Metals
In 1997, an investor was allowed to add precious metals to his IRA through the Tax Payer Relief Act. This includes silver, platinum, and gold. Generally, this is known as Gold IRA. There are several IRA account holders who prefer to put gold in their IRAs because this is a great and wise way to achieve diversification of funds. We know that the price of gold rises when the stock prices drop. Thus, this can even out an investor’s portfolio value during the weak period of the stock market.
How to Include Precious Metals to an IRA
Before finally deciding to put gold to you current IRA, it is best to ask your custodian first if you can include gold to your current IRA — if not, then you will have to open a new gold-and-silver IRA. If this is the case, you will need to select an IRA plan that is administered by a custodian who has plenty of experience dealing with gold IRA.
Precious metals are accepted to most types of IRA plans, including the traditional IRA, Roth IRA, SIMPLE (simplified incentive match plans for employees) IRA, and SEP (simplified employee pension) IRA. Of course, opening an IRA with the best brokerage firms is more recommended, so we could make better investments and increase our profitability through their best and reliable investment advice.
The next thing that we must do is to submit the necessary documents to the new IRA custodian to open your gold-silver IRA account. The account holders need to pay storage fees, as the gold must be stored at an approved depository that is in a separate location from from the IRA custodian – this is in accordance to the rules of gold IRA which are set by the Internal revenue Services or IRS. Once the account ids opened, an investor may now transfer money from his existing IRA to fund the gold account.
Decide which type of gold coins to buy, such as gold coins or gold mining stock. The IRS does not allow collectible coins and metals as IRA investments, except for the U.S. minted coins. Collectible coins are historic collections, while the minted coins, even they are also considered collectibles, have less subjective investment value standards. One ounce silver coins are acceptable if they were minted by the U.S. Treasury Department. Some bullion is accepted according to the IRS, which are made from either gold, silver, platinum or palladium.
Filed Under: Buying Gold