FAQ-Frequently Asked Questions
Here are some of the FAQ-Frequently Asked Questions...
Is gold a good retirement investment?
If you are looking for a way to balance your investment portfolio, the easiest and smartest way is to invest in gold bullion. The sheer mention of its name screams wealth and it has been found time and time again to be a safe way for investors, it increases in value when paper bought stocks and bonds decrease.
In fact, it’s one of the best retirement investments you can make to withstand economic turmoil, inflation, and catastrophic world events. Further, the United States Securities and Exchange Commission advises diversified retirement investments as being a safe way to manage financial risks and attain financial security after retirement. If you are looking to invest in precious metals, your IRA can assist you in securing a comfortable retired life by offering tax benefits, enhancing purchasing power, and diversifying financial and other assets.
Should I transfer or rollover from my existing retirement plan?
If you have an existing precious metals IRA and want to add additional gold to it, you will need to use your custodian to help you purchase gold from the dealer, so the dealer can move it to the depository for you.
TRANSFER: Your first alternative is a "transfer." This is something you can do at any time with your existing retirement plan as long as the assets go “from custodian to custodian.” and transfers may be made as often as you want.
ROLLOVER: The second alternative is a "rollover." A rollover occurs when you receive the distribution from your existing retirement account and then deposit it in another retirement plan custodial account. In this case you would need to re-deposit the funds into the new retirement plan account within 60 days. If the 60 day time period is exceeded, you would be liable for taxes and penalties on the money withdrawn. You may roll over the same money only once every 12 months to preserve the tax-deferred status of your retirement savings.
Elegible precious metals for IRA investing
You cannot just purchase any precious metal to be included in your Metals IRA. The United States government, through the IRS, has laid out some strict rules when it comes to what coins and bars qualify for such accounts. The precious metals eligible for placement within an IRA have proven track records over thousands of years.
These are the metals that transcend government influence they are tangible and cannot be printed like paper money or stored as a number on a computer file.
Gold, silver, platinum and palladium — these precious metals are popular for use in self-directed IRAs because of their long-term investment track record.
Here is a detailed look at each metal’s current eligibility rules on what you can specifically invest in: read our best gold ira company review 2023
What if I already have a self-directed IRA?
Great. So long as it is with one of our supported custodians you can jump right into buying metals. Simply shop for gold and silver (only some products are IRA eligible because of IRS rules, so note that on each product's details as you browse our selection) and select the IRA option at checkout.
What is a self-directed IRA? How is it different from the one I have with my brokerage account?
There's not much difference except your freedom of choice in investment. Self-directed is a marketing term used by custodians who support investing in lots of different asset classes like physical real estate to precious metals to business loans and lots more inside the same Individual Retirement Account (IRA).
Your brokerage IRA uses the same rules and regulations, but is simply limited to the investments available on their platform, usually just public stocks and bonds. This is often referred to as a "walled garden" where the selection is limited by the supplier (think of the old America Online versus the modern worldwide web).
There is nothing inherently wrong with a brokerage IRA so long as you know its limitations. But with a self-directed IRA your choices are much much wider.
Funds can typically be freely transferred between IRAs with no tax consequences by simply filling out a form with your custodian, allowing to make use of both types of IRAs at the same time.
What Is a Precious Metals IRA?
A gold IRA is an Individual Retirement Account (IRA), essentially a self-directed IRA that includes gold or other precious metals like silver in its portfolio. It works exactly the same way as a traditional IRA. To own gold, you will need a self-directed gold IRA that includes physical precious IRS-approved metal bullion coins or bars instead of publicly-traded securities.
Conventional brokerage firms don’t offer gold IRAs, and the IRS will not let you store your gold IRA in your home without early withdrawal taxation penalties. So, you will need to find a precious metals IRA custodian. Using an IRS-approved gold IRA company ensures that you’re meeting IRS storage requirements without accruing penalties for withdrawal.
Regardless of your traditional investment preferences, tangible assets like gold and silver can help make the profitability and safety of your retirement portfolio far more attainable while mitigating risks from uncertain geopolitical landscapes. Including gold within an existing portfolio could improve investment performance by either increasing returns without increasing risk, or by reducing risk without adversely affecting returns.
Can I use my 401(k) instead?
Yes and no. Most 401(k) accounts, like a typical brokerage IRA, are walled gardens as well. Some offer just a handful of investments selected by your company, others anything at the holding brokerage.
Either way, in order to allow investment in alternatives like real estate and precious metals, you can "rollover" some or all of your 401(k) balance into a self-directed IRA to use those same pre-tax funds to make your investments.
If the 401(k) account is from a former employer, there are usually no limits on your ability to make a rollover.
If you are still employed, you'll have to consult your 401(k) provider or employer about whether they allow for an "in service rollover".
What is the Difference between a Precious Metals IRA and a Traditional IRA?
Americans are allowed to own a self-directed IRA in addition to their traditional IRA where they can invest in alternative assets, such as precious metals. A gold IRA operates in a similar manner as a traditional retirement account, but it must include a percentage of IRS-approved bars or coins that are stored in a depository.
How do I fund my self-directed gold IRA account?
After opening your gold IRA account, you can only contribute up to the approved IRS limit.
A rollover (or transfer) of some or all of your existing traditional IRA, 401K, 403B or TSP account (for members of the military and government employees). Your IRA consultant will arrange for the transfer with your assigned IRA custodian.
2. Allowed annual contributions can be made into your gold IRA account up to the approved IRS limits. For 2022, total annual contributions to a self-directed IRA cannot be more than $6,000 of income. For 2023 it has been increased to $6,500. or $7,500 if you’re age 50 or older.
Should I open a gold IRA account or gold Roth IRA?
Choosing which type of precious metals account is a question to discuss with your IRA consultant. It can depend on the status of your existing IRAs, your contribution plan, your age, your employment or income status, and your desired goal.
A traditional gold IRA is tax-deferred until you make a withdrawal or take an age-required distribution. A Roth gold IRA is funded with pre-taxed money and is not taxed on withdrawal. Any capital gains or growth is also not taxed.
What Does it Cost to Maintain a Precious Metals Retirement Account?
On average, the cost of a self-directed retirement account is less than most retirement plans. The annual costs typically range between $160 - $250. For example, with a $50,000 investment, the yearly cost is only half of one percent or less.
What are the IRS Tax Rules for Self-Directed Retirement Accounts?
The same tax rules apply for gold IRAs as for traditional IRAs, and Roth IRA rules are the same as for Roth gold IRAs.
First, by following the IRS tax guidelines for IRA rollovers, you may transfer any amount of your current IRAs into a gold IRA with no tax penalty.
When you invest un-taxed money into a traditional gold IRA, taxes will be calculated at the time of each distribution. When you invest already-taxed money into a Roth gold IRA, your distributions and any capital gain on the investment are not taxed.
The same contribution limits and distribution rules for conventional IRAs apply to gold IRAs, except the last one:
The annual contribution limit for funding for 2023 is $6,500 till age 50, and $7,500 over-50
At age 72, the required minimum distributions (RMD) must begin
Early withdrawals (under age 59 ½) incurs a 10% penalty and additional taxes
You may receive your distributions in cash or physical bars and coins
How are Gold Deposits Stored in a Self-Directed Account?
The storage of precious metals held within an IRA is done at IRS-approved depositories. They handle all the reporting to the IRS on your behalf. Depending on which gold IRA company you work with, they may already have one or more gold depositories they work with, or you may need to locate one.
Are the values of the Precious Metals I buy for my IRA guaranteed?
Like all investments, the future value of precious metals is not guaranteed and rises or falls based on various market influences.
How long does it take to rollover a Traditional IRA into a Gold IRA?
IRA rollovers typically take around two weeks to complete. However, each application is different, and processing time varies case by case.
What is the minimum investment for a Gold IRA account?
The minimum investment for a gold IRA account will depend on the custodian you use. The initial investment will vary based on associated fees and gold prices at the time. But you can expect to pay a wide range of a hundred to several thousand dollars to open an account.
What is a Gold IRA Rollover
With a direct rollover, the funds are transferred automatically from the retirement account to the self-directed IRA. You never touch the funds. Once the old retirement account is closed, the manager of that account will send a check directly to the new gold IRA trustee or custodian.
Best Gold IRA Companies
We have chosen our Best Gold IRA Companies and provided a comprehensive review of each of them, follow these links below for a deep dive into Precious metals Investing.