Top Gold IRA tips:
- There are studies that show in order to maximize your investment, you are likely better off purchasing gold bullion instead of collectible coins
- Make sure you buy IRS-approved coins
- Hold investments to maturity to avoid tax penalties
- Be aware of tax penalties for home storage options
Tips for Gold IRA buyer
“Invest in gold.” It’s a common message being broadcast to investors these days with some appeal. As a precious metal, gold seems timelessly valuable. Recent dramatic fluctuations in the market may have you thinking it’s an appealing option for you, too. But is buying gold wise in the modern era? As it turns out, there are IRS-approved methods for investing in gold. Gold Individual Retirement Accounts (Gold IRAs) tie the relative stability of gold bullion with the convenience and benefits of a modern IRA. But which gold or precious metals IRA is right for your current situation?
There are very strict regulations that IRAs must follow with regard to how they store and transfer precious metals. Most retirement experts have recommended that 5-15% of your total portfolio be in precious metals, with some even suggesting up to 20%. Whether you choose to put that allocation into gold alone — or mix it up with silver, platinum or palladium – investment firms must follow the rules to protect your wealth. Following these guidelines will help you make wise purchases.
Buy IRS-Approved Coins for your Gold IRA
While IRAs may hold your gold in physical bars, these are not as easy to liquidate as precious metal coins. Therefore, many investors seek plans that can hold their investment in coins, which are easier to transfer and not as easily counterfeited. Not all gold and silver coins are acceptable for IRA investment. Be certain that your assets are categorized by the IRS to fund your account.
Approved Gold coins for a Gold IRA include:
- American Eagle gold coin
- American Eagle silver coin
- American Eagle platinum coin
- Maple Leaf palladium coin
There are eleven other IRS-approved 1 oz. options. Know exactly what you are buying before you invest to be sure you make a wise buying choice. U.S. Code Title 26 § 408 spells out the restrictions for buying approved coins.
Hold your Gold IRA to Maturity
If you need access to your IRA funds, you can take distributions from your IRA in the same manner you would a traditional IRA. In most instances, you can opt to receive the actual bullion – or the cash value of your precious metals. But be aware, you will be taxed accordingly and will be responsible for any liability to the IRS for early withdrawals.
Be Advised of Gold IRA Storage Choices
It’s important to know if your metals will be stored with the metals of other investors. While many IRAs do offer you the ability to keep your gold in a separate storage, beware of any IRA that offers investors the option to store it in their own home. This is not an IRS-approved method of IRA investment, and will result in potential tax penalties. Avoid companies that offer “checkbook IRAs,” “collectibles” or the possibility of “home storage” in a safe or bank deposit box.
There are dozens of gold IRAs available today, with many of them focusing specifically on retirees. Moreover, not all IRA needs are the same. Do you homework and shop around before making a decision.
Another Way to Own Gold
Tax issues aside, some financial experts say there is a much more cost-effective way to add gold to your retirement portfolio: invest in an Exchange-Traded Fund (ETF) that tracks the price of the metal. These funds — like SPDR Gold Shares, IShares Gold Trust, ETFS Physical Swiss Gold Shares and others — are essentially trusts that own vast quantities of gold bullion. SPDR Gold, for example, has nearly $34 billion in gold bars tucked in a giant underground vault in London where workers in titanium-toed shoes drive the stuff around on forklifts. advantage of gold ETFs is that you can buy and sell shares like a stock and hold them in a conventional IRA or 401(k); no special account is needed.