What Is a Silver IRA?

More and more Americans today are taking advantage of the stability offered by precious metals to protect their hard-won savings. With fear of recession starting to pervade markets, Americans are looking to precious metals like silver to help protect their portfolios against the possibility of major losses.

That’s what a physical silver IRA allows you to do, allowing you to roll over existing retirement assets into physical silver coins and bars tax-free. With a silver IRA rollover, you can lock in gains from your 401(k), 403(b), TSP or similar retirement account, while benefiting from the potential for price growth that silver offers.

With a silver IRA, you can enjoy all the same tax benefits as any other IRA, including being able to use pre-tax dollars, and deferring taxation until distribution time. But you can also gain the peace of mind that comes from owning physical silver, which over the course of time can grow in value more than many other assets.

A silver IRA isn’t a paper asset that’s backed by silver; it’s real silver coins or bars that you own. And when you decide to take a distribution, you can choose to take it either in cash or in physical silver.

With a silver IRA, not only are you keeping your own retirement savings safe and secure, you’re also ensuring a sound financial future for your heirs who may inherit your silver IRA once you pass away. Silver has been playing a role in protecting people’s finances for centuries and will continue to do so in the future.

Key Takeaways

• The silver price has increased over 1,800% since 1971, while the dollar has lost 87% of its value
• Silver demand continues to outstrip silver supply
• Rising silver demand from the photovoltaic industry could push the silver price up

Silver IRAs vs. Conventional IRAs

Most conventional IRA accounts purchase heavily in what are often referred to as paper financial assets: stocks, bonds, mutual funds, exchange-traded funds, certificates of deposit, etc. All of those are heavily dependent on the health of Wall Street for their value.

When the economy starts to perform poorly, many of those assets plummet in value. Contrast that with silver, which like gold maintains and even increases in value in the face of economic instability.

In the aftermath of the 2008 financial crisis, for instance, silver more than quintupled from its 2008 lows to its 2011 highs. Not only did that far outpace the recovery of markets, that was even higher growth than gold.

Silver IRAs, like all other IRAs, can be either Traditional IRAs or Roth IRAs. With a Traditional silver IRA, you would use pre-tax dollars to purchase silver.

With a Roth silver IRA you would use post-tax dollars to purchase silver. Or you could roll over pre-tax dollars from a 401(k) or similar retirement account into a Roth silver IRA, performing a Roth conversion and paying taxes now so that you don’t have to pay taxes when you take your distributions.

Silver Supply and Demand

Silver is in demand not just from individuals but also from industry. And while silver may no longer see the demand from the photographic film industry that it once did, that has been made up by demand from the solar panel industry.

Silver’s continued use in solar cells and electric batteries in the future could make up a large part of increasing silver demand. And with silver demand having outstripped silver supply for the past several years, stronger silver demand could put more upward pressure on silver prices.

Benefits of a Silver IRA

Silver has been an important monetary metal and asset for centuries, right alongside gold. And because it is far less expensive than gold, individuals can buy a lot of it for relatively reasonable sums of money.

People who know that paper assets can all too often become worthless appreciate silver for its ability to act as a safe haven asset and store of value over the long term. A silver IRA allows you to take advantage of silver’s maintenance of value in order to diversify and protect your retirement savings portfolio.

Buying silver with a silver IRA can offer several important benefits. Among them are:

• Portfolio Diversification
• Inflation Hedge
• Asset Appreciation
• Tax Advantages

Portfolio Diversification

For many people, diversification just means mixing up the percentage of stocks vs. bonds that you hold. But really diversifying can mean looking into different geographic regions, different asset classes, and exploring alternative assets such as precious metals like gold and silver.

Buying silver through a silver IRA can be a simple way of diversifying your portfolio while still protecting yourself against massive financial losses. Setting up a silver IRA allows you to branch away from the traditional financial assets owned by most retirement accounts, in order to help protect you against market crashes.

Once you get your feet wet with a silver IRA and feel comfortable with precious metals, you can also begin to buy gold, platinum, and other precious metals.

Inflation Hedge

Silver can also act as a hedge against inflation. While the US dollar continues to become devalued every year through the Federal Reserve’s inflationary monetary policy, silver continues to appreciate in value.

That’s why silver coins long since ceased to circulate as money, because the silver in them became worth more than their face value. A silver dollar now contains over $20 worth of silver, while a paper dollar has lost 97% of its value since 1913.

Since August 1971, the US dollar has lost over 87% of its value. But silver has appreciated in value more than 1,800% since then.

Asset Appreciation

Silver’s strongest price growth often comes when stock markets aren’t performing well, which makes silver a potential countercyclical asset that many buy when they think stock markets may crash.

Silver also performed well during the 1970s stagflation, when markets struggled to grow. Silver’s annualized rate of growth was over 30% per year over the course of the 1970s.

Many silver owners today are hoping that silver repeats that kind of performance in the coming years. With inflation remaining persistent and the threat of recession growing, silver’s price could grow significantly if people begin to flock to it as a safe haven asset.

Tax Advantages

A silver IRA offers all the same tax advantages as any other IRA. If your silver IRA is a Traditional IRA, you purchase with pre-tax dollars and only pay taxes when you take a distribution.

If your silver IRA is a Roth IRA, you use post-tax dollars and your qualified distributions are tax-free. Both types of silver IRAs can benefit from rollovers, which allow you to fund your silver IRA with existing retirement assets.

Silver IRA Rules

While a silver IRA offers the same benefits as any other IRA, it is also subject to the same rules as any other IRA. That means that any distributions you take before age 59½ may be subject to a 10% penalty, and if your silver IRA is a Traditional IRA you will have to take required minimum distributions (RMDs) after age 73.

Annual contributions to IRA accounts are limited to $7,000 per year ($8,000 if you’re older than age 50) across all your IRAs. But rollover amounts remain unlimited and in most cases are tax-free.

Silver IRAs, like any other IRA, are not allowed to acquire collectibles. Most metals and coins are considered collectibles, and thus are not IRA-eligible.

But certain coins and silver bullion are IRA-eligible, specifically Silver American Eagle coins and any silver coin or bar with a minimum fineness of .999 (99.9% pure silver. This means that classic silver coins such as the Morgan Silver Dollar, Maria Theresa Thaler, and US junk silver are not IRA-eligible.

But you can still buy a number of IRA-approved silver coins such as the Silver American Eagle, Canadian Silver Maple Leaf, or any of the other IRA-eligible silver coins Goldco offers. Goldco works with mints around the world to bring you IRA-eligible silver coins directly from the source.

Silver coins and silver bars owned by your silver IRA must be administered by an IRS-approved custodian, so silver you already own isn’t eligible to be placed into a silver IRA. Nor can you keep the silver you purchase for your silver IRA at home, as it must be stored with a bullion depository.

You may have heard of something called a home storage IRA, which purports to allow you to keep precious metals IRA assets at home. That is a violation of federal tax laws, and people who have tried to store IRA assets at home have paid the price for it.

If you want to touch the silver in your silver IRA, some depositories allow you to visit and see your silver. Or, if you decide to take a distribution of your silver IRA assets, you can take that distribution in silver rather than cash if you choose.

Starting a silver IRA doesn’t have to be difficult. While the rollover process to fund your silver IRA may take a few more steps than opening up a Traditional IRA with a brokerage, the result is a vehicle that lets you acquire what you want, when you want it.

With a silver IRA you are fully in control of your assets, what you want to buy, and when you decide to sell. If you want the peace of mind that comes from owning tangible physical silver, then maybe you should start thinking about buying silver.

How to Start a Silver IRA

Starting a silver IRA can be done in just a few simple steps. First you’ll sign a customer agreement with Goldco to agree to our terms and conditions of doing business.

Then you’ll select the funding source for your silver IRA. In most cases this will be a rollover of funds from a 401(k), 403(b), TSP, IRA, or similar retirement account.

If you’ve decided on a rollover, you then contact your plan administrator to start the rollover process. With the paperwork and signatures you’ll need, expect it to take 1-2 weeks for funds to move from your existing retirement account into your silver IRA.

Once funds have reached your silver IRA, you can then choose which silver coins or silver bars you want to buy. Goldco’s representatives can tell you all about the various types of silver coins and bars we offer.

After you have purchased your silver coins or silver bars, they will then be shipped to the bullion depository of your choice. Your IRA custodian will provide you with periodic updates on your silver holdings. Here’s how to read your silver IRA account statement.

Whenever you make the decision to take a distribution, you can then choose whether to take it in cash or to take your distribution in silver. And of course you’ll be responsible for paying any taxes that are due.

But the process of starting a silver IRA isn’t complicated. And Goldco’s experts have helped thousands of people just like you navigate that process and buy silver to add to their IRAs.

If you’re worried about the future, worried about your retirement savings, and are looking to protect your financial well-being, maybe it’s time to start thinking about how silver can play a role in your financial planning.

Contact the experts at Goldco to find out more about how you can purchase silver IRA to protect your dreams of a long and enjoyable retirement.

This article was originally published in July 2019 and was updated in August 2024.