What is Gold IRA – a retirement investment?
First of, what exactly is a gold IRA? In short, it is a individual retirement account where gold or other precious metals are held in custody for the owner of the account. The difference is, that instead of holding paper assets, it holds real physical gold bullion coins or gold bars. The custodian has a more diverse portfolio and options in the account itself. These precious metals IRAs are usually self directed and can include different types of accounts:
- SIMPLE IRA
- SEP IRA
- Thrift Savings Plan (TSP)
- Pension Plans
- Traditional IRA
- Roth IRA
Other may be eligible as well – please get in touch with one of the Regal Assets representative for more information.
What are the IRS approved and allowed precious metals to be held?
All of these have to be in the form of IRS approved bars or coins. Because gold is the most popular choice, we often hear the term “gold IRA” in the industry. But in reality it means a self directed retirement account containing more or less all of these four IRS-approved precious metals.
Investing in gold is a good and strong strategy for long-term security against inflation and diversify a portfolio. The Internal Revenue Code state that the assets are stored in a very specific way. This changes from company to company – some have in-house facilities to hold the physical precious metals and some use outside partners to store it for them.
What is an self directed Gold IRA?
The way that you can setup a gold IRA account is to establish it through a account called an self-directed IRA. That way, one has a lot more control over their investments on behalf of their retirement account than with a normal IRA. Mutual funds, bonds, stock, real estate and precious metals can all be held legally under a self-directed IRA account. The only thing the IRS requires is that the IRA assets are held by a custodian or a qualified trustee on behalf of the IRA account owner.
In its essence it is very similar to your exsiting IRA or 401k, the difference being it allows you to hold gold or other precious metals in your retirement account for diversification. Holding different assets as part of your retirement plan has a lot of benefits for your retirement account.
Gold, silver, palladium or platinum are usually stored in depositories like Brink or Delaware for maximum safety of your assets. It is completely up to you to decide the percentage of your retirement that should go into the account and you can add more at any later point. There are minimum amounts required for the initial deposit.
Rolling over your IRA is a great investment opportunity that allows normal people to participate in the same investing strategies that those of the wealthy.
Read more about the 401k rollover process in our gold IRA rollover review.
We also written a comprehensive Regal Assets Review.
Gold IRA Rollover
If you are serious about rolling over your IRA account, we recommend Regal Assets, as they have been in business the longest and have a 5 star rating with no complaints from the very beginning, maintaining their flawless rating on BBB and Trustlink. You can read our comprehensive review here.
Whether you have a 401(k), 403b, 457b, pension plan or annuity you qualify for a tax free IRA rollover. This is a great, since you won’t be losing any money to taxes. You can hop over to Regal Assets website dial the free number and consult with the IRA specialist. Another option is to fill out the form with your phone number, email and your name. A representative will get in touch with you (takes 24-48 hours). They will answer any questions you have about the process.
IRS Approved Precious Metals
IRS has a set of approved and allowed bars and bullion that are allowed to be held in a IRA account. For the full list click here.
The most popular approved gold bars and coins:
- American Eagle Gold Coins
- American Buffalo Bullion Gold Coins
- Proof American Eagle Coins
- Chinese Gold Panda Coins
- Canadian Maple Leaf Gold Coins
- Austrian Philharmonic Coins
- Australian Nugget/Kangaroo Coins
- Different Gold Bars and rounds .995/ Credit Suisse / PAMP Suisse Gold Bars
What To look for in Gold IRA Companies
It goes without saying that it is very important to research the business practices and background of any company that you are thinking about for a Gold IRA, for two reasons:
- You need to make sure that the retirement savings you have are being taken care of by certified processionals that you can trust, instead of falling victim to a scammer.
- The IRS will only allow one tax-free rollover of your IRA funds per year. This rollover for the full amount of your funds has to occur within a 60 day period from the time that you remove the funds from the care of your current IRA custodian so that you avoid any penalties. If you happen to choose a custodian that you will want to change later, you need to be able to wait in total of 12 months, or you could face some tax penalties on the funds that you are moving.
The custodian that you choose for your Gold IRA needs to be ready and willing to provide you with any of the necessary contact information and paperwork that you need to successfully arrange the rollover of your IRA. This paperwork should be handled prior to the date of the rollover so that you can bank on the money being transferred within the required 60 day period to the Gold IRA account. There are some instances where the IRA custodian may decide to issue a check to you for the full dollar amount of your IRA. Then, you will need arrange the deposit for the full amount of funds to the new Gold IRA custodian. Keep in mind, there could be fees associated with rolling over your current IRA. These should always be discussed with your custodian before you make any major decisions.
Plan Your Investment Strategy
While you are planning on investing your money in such a rollover, you need to understand exactly how you would like ti invest funds, as well as how this strategy will impact your planning needs. The question you should ask is what your main reasoning will be for investing in physical bullion.
Diversification/Protection – If you ever feel that your portfolio happens to be biased towards bonds, stocks and/or mutual funds, it can be helpful to allocate between 5 to 10% of the portfolio to precious metals to successfully diversify and protect it.
Loss Of Trust For The US Dollar – When the Weimar catastrophe is in the air and you have lost confidence in the dollar, as well as other paper currencies, putting 10 to 20% in in a common strategy.
Future Profit – Just as a high net worth investor, if you believe strongly that the pricing of gold will hit at around $5,000 or more per ounce over the next few years, you will see that putting in more than 20% of your portfolio may bring about substantial profits. However, this is not a Gold IRA Guide recommendation, simply because there is such high risk involved. Both beginner and intermediate investors should be playing it safe while going for a lower allocation, then adjusting accordingly with comfort and confidence in their investment after a while.
It is also best to keep in mind that when you are investing through an IRA that bullion coins or bars that are IRS are necessary.
A number of IRA and 401k custodians will also allow investors to take advantage of Gold ETF’s, mutual funds or gold mining stocks. Even though this kind of investment will not require the same storage needed as physical bullion, you should understand that Gold ETF is an investment for “paper gold” and not legitimate physical gold.
Locating A Reputable Gold Dealership
As a final and very important step for the rollover of your IRA into a Gold IRA will be locating a Gold dealership that is reputable, offers competitive pricing and uses IRA approved products. While you could visit your local gold retailer, shopping online would give you even more diversity and a higher potential for saving. Many Gold IRA custodians will make it possible for you to choose a precious metal dealer to purchase the coins/bars from. A good tip is to look for any company that offers a buy-back program, along with facilities for offshore storage facilities. Singapore and Hong Kong are stable Asian countries that we recommend. Note: There are restrictions on gold bullion bars and coins.
There are strict rules from the IRS on the types of gold bullion bars and coins that you are able to invest in for part of your IRA. The coins have to be minted at a 99.9% or more purity level, which will include the Canadian Gold Maple Leaf, American gold and silver eagle, American gold and silver buffalo, Austrian Philharmonic and other coins that are similar. It will also include some gold bars, for example the Credit Suisse gold bars and bullion.