Inflation. It seems to be everywhere these days, and it can be a scary thing—as you plan for retirement, especially. With grocery prices going up and even used car prices starting to rival the high costs of new cars, it’s clear that no one wants the value of their dollar to diminish relative to the markets. With interest rates potentially ratcheting up and recession looming on the horizon, many people turn to a safe haven asset: precious metals. Gold IRAs may be in the works for many investors out there.
But what are Gold IRAs, and how exactly does it work to keep precious metals within a retirement account? Here’s what you’ll need to know.
Gold IRAs: the Basics
First, the basics. A Gold IRA is really just a Self-Directed IRA that you purchase gold with. To make sure you have a Gold IRA, you’ll have to work with a custodian that offers buying and selling precious metals with their custodian/administrative services—a Self-Directed IRA administration firm like American IRA, for example.
Once you open and fund an IRA, you can then direct the custodian to make purchases and sales in the IRA’s name, which in turn allows for the buying and selling of precious metals. Voila—you now hold a retirement asset that is thousands of years old.
Frequently Asked Questions (FAQs) About Gold IRAs
Is a Gold IRA a Specific Account Type?
No. Gold IRAs are simply IRAs you hold with a Self-Directed IRA administration firm or custodian who offers the ability to buy and sell precious metals within the IRA. This is as opposed to a Roth IRA, which is indeed a specific retirement account type with distinct features from other types of retirement accounts.
Can I Buy and Sell Other Precious Metals in a Gold IRA?
Typically, yes! However, keep in mind that there are some regulations that may hamper your ability to buy any type of precious metals. You’ll want to generally buy metals like gold and silver with high purities—this makes it easier to track their value, which is important for reporting to the IRS. You also can’t keep precious metals at home, such as in a private safe, unless those precious metals are counted as personal property, the selling of which is taxable.
Why Do I Have to Keep My Precious Metals Off-Site?
Simple: to keep these metals separate from your personal holdings. The retirement account is more than just a name; it’s the practice of keeping retirement holdings separate from the rest of your personal property. The IRS wants to make sure that your retirement holdings are legitimately for retirement, and that means maintaining a strict line of separation between what you use personally and what you hold for retirement. In precious metals, that means using an insured approved depository for the storage of your precious metals. This is also more secure, and often relatively inexpensive to the value of the precious metals they hold.
Should I Open a Self-Directed Gold IRA Today?
We don’t offer specific investment advice, but many investors flock to Gold IRAs because they’re concerned about the economy and want a way to diversify their assets. There are few ways to do this, as the most common asset classes are typically land, stocks, and precious metals. That means that if you want a well-diversified portfolio of different asset classes, gold and other precious metals might be a vital part of that diverse portfolio.