If there’s anything this year’s economic headlines have proved, it’s that you never know what’s coming. For many investors, the way to handle turbulent stock markets and economic headlines isn’t to buy more stocks—but to expand the possibilities of assets they can hold within a retirement portfolio. That means turning to a Self-Directed IRA, which opens up these possibilities by making it so retirement investors can access different assets with the tax protections that come with an IRA. This means investors can use retirement accounts to hold real estate, tax liens, private company stock, and yes—precious metals.
The only question is: how does an investor buy Gold in a Self-Directed IRA? The process is about as straightforward as you can get, but it will require some explanation to demystify and clarify some things along the way.
Buying Gold in a Self-Directed IRA
The first step is to open a Self-Directed IRA with a qualified IRA custodian who can offer Self-Directed IRAs. For example, American IRA is a Self-Directed IRA administration firm. By using a Self-Directed IRA with us, we make it simple to open the account, fund it, and begin issuing buy and sell orders within the account. But we’re getting ahead of ourselves.
The key to understanding a Self-Directed IRA is this: you will work through a Self-Directed IRA custodian who handles administrative duties on the account. You will make the decisions—such as funding, buying, and selling. You will then issue these decisions as orders to the custodian on the account. From there, you can fill in the rest of the blanks: if you want to buy and sell precious metals within an account, you would issue these orders with the Self-Directed IRA custodian with whom you’re working.
The Issues and Constraints When Investing in Gold in a Self-Directed IRA
Although it’s exciting to have a Self-Directed IRA and all of the freedom that comes with it, it’s also helpful to know what you can accomplish within the retirement account rules. You can’t simply add any old piece of Gold to a Self-Directed IRA. For instance, a piece of personal property like a Gold necklace would not be an applicable Gold asset for a retirement account, as it’s more of a collectible than an investment.
Instead, when investing in precious metals through a Self-Directed IRA, there are some tried-and-true investments to stick to. For starters, you’ll want to know the available precious metals, including:
And what types of products can you buy? Let’s take the example of Gold. You will be limited to investing in certain types of Gold, standardized for purity. You can purchase Gold “hallmarked by a NYMEX- or COMEX-approved” refiner or assayer. This requires purity of .995+ fineness, or purity of 24 karats. In other words, you will buy Gold of maximum purity.
You can purchase coins and bars, typically, within a Self-Directed IRA. These standardized units help make it easier to understand the total value of the Gold and precious metals within an IRA, which is an integral part of maintaining a retirement account in good standing. If the government were to allow collectibles like Gold jewelry within an account, it would be nearly impossible to keep an accurate record of the value of the retirement account.
Finally, to answer the question at the beginning of this post: to buy Gold in a Self-Directed IRA, you would issue a written buy order to your Self-Directed IRA custodian.