Thinking about opening a precious metals IRA? If so, you might have a few questions that you need answered before making that decision. Here are a few things that you should know about precious metals IRAs in order to help you make your decision.
What is a precious metals IRA?
A precious metals IRA is just like any other IRA in that you make regular contributions to the account which are then used to make investments that are supposed to increase in value over time in order to help you secure an income after you retire. Your money will grow, tax free until you begin taking distributions at age 59 ½, where you will then pay regular income tax on your earnings as they are distributed. The only difference between a regular IRA and a precious metals IRA is the types of investments you are offered. In a precious metals IRA you can invest in gold, silver, platinum and palladium rather than highly volatile stocks.
Why invest in precious metals?
Precious metals are inherently more stable than other types of investments. In addition, they offer protection against stock market downswings because precious metals actually gain value when the economy is weak whether other investments lose value. This is an important distinction because precious metals IRAs are the only type of retirement account that can offer you a hedge against loss and inflation.
Are there any drawbacks to investing in precious metals?
There are no downsides to investing in precious metals over stocks, bonds and mutual funds. Gold and other precious metals gain in value in both good economic times and in bad. However, they don’t rise in value as sharply as more volatile investments. This takes the anxiety out of investing for most every day investors.
How do I open a precious metals IRA?
The good news is that opening a precious metals IRA is an easy process. To open a precious metals IRA, all you have to do is contact a precious metals IRA custodian and complete the paperwork. The custodian will establish the account and then help you fund it through a process known as a precious metals IRA rollover. The rollover allows you to move the money you have saved in a traditional or Roth IRA or even your company sponsored 401k into your new precious metals IRA. This process is 100% IRS approved and will not result in the payment of taxes or in an early withdrawal penalty.
Can I invest in any precious metals product?
No. The IRS has set specific rules surrounding what types of precious metals you can invest in. The main requirement is that the product must meet certain fineness requirements. The fineness of a product refers to its purity. Most products must be at least 99.95% pure to be eligible to be placed into a precious metals IRA. Collector coins and other types of coins are not eligible for placement in a precious metals IRA.
Precious metals IRAs offer a safe haven for those looking for a better way to save for their retirement needs.