Little-Known Pros and Cons of a Silver IRA Rollover

Posted By Ziga Breznik, Last updated: April 17, 2020

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A silver IRA is a type of retirement account that allows investors to invest in IRS approved silver bars and coins. There are a set of set of rules in place and are pretty much the same as for any other IRA. The only exception is that you can add silver and other approved precious metals to your IRA. Regular IRAs usually focus only on paper assets or stocks. A silver IRA or gold IRA or a combination of both, is a great way to diversify your portfolio and hedge your wealth against inflation.

Most working people, in the United States and beyond, believe that it is incredibly important to save for the future and invest in a retirement fund – ideally one that is future-proof and resilient against any potential future economic crises. Once you have worked hard for decades, you will most likely want to benefit from a retirement fund that is safe, secure and profitable, without putting so much work into monitoring stock market trends that you are unable to relax and enjoy your retirement! There are various options of retirement plans that are used, and it can be daunting to know how to invest your assets for the future in a way that keeps you and your family comfortable in your later years.

Traditionally, IRAs are a popular method of retirement plan, although other people choose to invest in assets such as silver or other precious metals. However, many people are increasingly opting to do both, or to transfer funds withdrawn from a traditional IRA to an investment in silver. This is called an IRA rollover, and in this article, we will explore Silver IRAs specifically.

What is a Silver IRA?

An silver IRA (or Individual Retirement Account) is an account that allows the account holder to transfer assets from an older account, such as an employer-sponsored retirement account, to a more traditional IRA.

A traditional IRA is an account that allows the user to contribute pre-tax income to a retirement fund. One of the most popular examples of a traditional IRA is the 401(k) plan, which is in use by around half of Americans! The advantage of a traditional IRA is that investments are not taxed until they are withdrawn, yet still appreciate in value. When the account holder retires and withdraws their contributions, these withdrawals are taxed at the owner’s current rate of income tax, and capital gains are not assessed. With these traditional IRAs, there is a contribution limit of $6000, or $7000 for those aged fifty or older. At age seventy-two, required minimum distributions (or RMDs), must begin.

IRA accounts are often reliant upon stocks, bonds, and/or mutual funds. Because stocks, bonds, and funds are linked so closely to the performance of the wider economy and a variety of other economic factors, the value of the assets in these accounts can steeply decline quickly during periods of economic crisis. Because of this, many investors choose to “rollover” their assets from traditional retirement plans to investments in non-currency assets (such as silver), where industrial demand can drive value, rather than governments and banks. 

You may have heard talk in financial and investment circles about IRA rollovers, or rollover IRAs. IRA rollovers are a method of maintaining the tax-deferred status of the assets in a traditional IRA. IRA rollovers typically hold 401(k), 403(b), or profit sharing plan contributions that have been transferred from an account such as a retirement account or plan that has been sponsored by a previous employer. The advantage of an IRA rollover is that IRA rollovers have no cap on the amount of assets that the account holder can transfer, and they also allow account holders to invest in other assets – from stocks and bonds to mutual funds and ETFs.

IRA rollovers can be used to invest in various different things, but investing in precious metals is a popular option, for various reasons. Investing in gold has always been popular, and metals such as platinum and palladium have also grown in popularity. Another option is to invest in silver, and there are various advantages to this option.

Advantages Of Silver IRAs: Hedge Against Inflation

Silver is highly versatile, and used for more purposes than any of the other precious metals. It is used not only for coins and jewelry, but for more practical applications such as the manufacturing of tableware, batteries, automotive components, mirrors, and various types of industrial equipment and machinery. In fact, silver has the longest trading history of any of the precious metals!

Silver is frequently in demand across many industries, and this is why it is a valuable and lucrative asset to invest in, and as this is unlikely to change any time soon, it is perhaps one of the most future-proof investment choices that you could make. After all, investment is all about the future!

As well as being highly useful and sought-after, silver is also far more affordable than other precious metals such as gold, platinum or palladium. A lot of smart investors are choosing to invest in silver rather than the other common options, due to its affordability combined with its high long-term value.

Investing in silver or other precious metals has the advantage of tax benefits, as mentioned before, but also has other advantages over keeping your investments in currency. The stock market is famously volatile, and this is unlikely to change any time soon! Investing in non-currency assets is a popular and tried-and-tested method of protecting your capital against stock market disruptions, inflation, and other fluctuations that may lower the value of the dollar (or whichever currency you are using). Precious metals in general have outperformed the DOW by over 300% in the last ten years – an impressive statistic that makes investing in them extremely appealing to a lot of people. Silver, specifically, is actually predicted by economists to increase in value, whether or not the wider economy goes through a boom or a bust! It is often considered a safe haven in time of economic turmoil and a hedge against inflation.

A Silver IRA rollover gives you a great deal of freedom over your potential future investments as your choices of investments are even broader than with other IRA rollovers. With plans such as a 401(k) plan, your choices are significantly more limited. With an IRA rollover, you can roll your funds over directly from your old retirement account to your new IRA. A greater level of freedom over their investments because the investment choices are broader, whereas the investment options are somewhat limited with a 401(k) plan. You can roll over the funds directly from your old account to the new one. A silver IRA rollover allows you to transfer either all or part of your existing retirement account into investments in silver assets.

How to do a Silver IRA Rollover?

Sounds a little complicated and daunting? Thankfully, the process of carrying out a silver IRA rollover is not at all difficult! You do not need to worry if you already have an existing savings plan in place – the process is simple.

Don’t worry if you already have a savings plan (such as a 401(k)) put into place, because the process of performing a silver IRA rollover will be easy when you educate yourself on the subject. We have detailed the following steps to help you carry out this process:

  • Secure an IRA Custodian: You will need to secure an IRA custodian before you can begin to roll the funds from your 401(k) into investments in silver. An IRA custodian is a financial institution that acts essentially as an accountant, making and/or helping you to make investment decisions, keeping your account safe, and ensuring that you are following governmental and IRS regulations at all times. 
  • Contact a Wholesaler of Precious Metals: There are many companies in the United States (two of the most popular and well-known are Goldco and Lear Capital) and around the world that provide precious metals such as silver wholesale to help investors start a precious metals IRA. It is worth researching these companies by checking out their websites and customer reviews before deciding which company to go with! Once you have done your research, contact your chosen company (most companies will have a contact form that is easily accessible for you to fill out).
  • Wait For the Company to Contact You With The Required Forms: Once your information has been received, companies such as Goldco will then direct an expert in precious metals to contact you and provide you with the required forms and to answer any questions you may have about any point of the process. 
  • Choose Your Investment Options: The expert should help you to fill out the forms needed to open an account, provide you with detailed information on the best investment options, and help you choose the best precious metals (for the purpose of this article, silver) to invest in and then transfer your chosen percentage of your retirement funds into the desired assets without any IRS penalty. Most companies offer a selection of different investment options and packages, from fixed plans to self directed (customizable) IRA plans!

Once you have chosen the precious metals that you want to invest in, the metals are sent to a secure storage facility to protect your retirement assets. This should give you peace of mind that regardless of any economic fluctuations, your retirement fund is safe and untouchable, and you can enjoy the fruits of your working life without any worry or hassle!

Adding Other Precious Metals into your Silver IRA

One of the best things about a silver IRA is that, in most cases, it is not even limited to just silver assets! If you want to diversify your investment portfolio, most companies will allow you to also include gold, platinum, and palladium assets, or any combination of these precious metals! A diverse investment portfolio can be even more future-proof – and although we agree with this received wisdom, we also believe that silver is still the most beneficial of the precious metals to invest in.


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