What is a Precious Metals IRA?
In 1974, the US Government passed a law called the Employment Retirement Income Security Act (ERISA). This new law allowed individuals to establish individual retirement accounts or IRAs. Prior to ERISA, it was tough to have a tax-advantaged retirement account outside of an employer-run retirement plan. ERISA allowed individuals to create Individual Retirement Accounts and was further expanded to the formation of Self-Directed Individual Retirement Accounts, which allows individuals to direct retirement funds to invest in non-traditional investments such as real estate, bonds, private companies, and precious metals. These accounts allow not only investing in gold and silver, but also investing in non-traditional investments such as real estate, bonds, private companies, and other precious metals. A precious metals IRA is a Self-Directed IRA that allows individuals to contribute to a new account or rollover a portion of their current retirement accounts to invest in certain types of physical gold, silver, platinum, and palladium.
If you’re the owner of an individual retirement account (IRA) and are worried about economic inflation affecting the value of your assets, investing in precious metals may be a good choice. Precious metal IRAs are time tested and proven to be a solid investment in a volatile market because the price of precious metals tends to rise when the stock market is down. Including precious metals products in your account will ensure diversification so when the next recession hits, your retirement portfolio is safe.
Using a precious metals IRA to buy gold, silver, platinum, or palladium when the stock market is up is another popular strategy. Recessions are cyclical, which is why there is never a bad time to invest in precious metals. A precious metals IRA also protects against a weakening US dollar and financial meltdowns.
Why Use A Precious Metals IRA?
If you’re anywhere near retirement, you will remember the most recent 2008 Great Recession. Many experienced devastating losses and are still recovering from this event. If you are close to retirement and invested in only paper backed assets like stocks and mutual funds, another economic meltdown could permanently delay or prevent your retirement. To protect your portfolio against cyclical recessions, it is crucial to diversify by investing in precious metals. Physical gold and other precious metals. Physical precious metals offer a unique stability in volatile economic times in comparison to paper backed assets like stocks and mutual funds. Thus, some people choose to open gold and silver IRAs to take advantage of this stability.
Because paper backed assets are based on the value of money, factors like inflation and interest rates can affect their value. While the US Government continues to print more and more money every day, physical precious metals can’t be printed. There is a finite amount of physical precious metals on Earth so their store of wealth will remain stable, even rising with inflation.
Besides investing in gold and silver, among other metals, each type of precious metal has many uses that drive their demand:
Gold – The most popular precious metal. Gold doesn’t corrode and is malleable and conductive, which makes it highly desirable for many uses. Other than a store of wealth, over 50% of gold’s demand is from jewelry. Another common use is in electronics due to its conductivity. The exploding demand for smart electronics will continue to drive the daily gold price higher and higher in the information era. Learn more about starting a ￼gold IRA.
Silver – The number one use of silver is in electronics. Its thermal and electronic conductivity make it an ideal metal for industrial applications that can’t be substituted with cheaper metals. Silver is used in computers, tablets, cell phones, televisions, automotive parts, solar panels, and more. Learn more about starting a ￼silver IRA.
Platinum – Platinum is an industrial metal that is primarily used in automotive applications for catalytic converters to help reduce harmful emissions. It’s also used in jewelry and other refining catalysts along with some computer applications. Platinum is rarer than gold or silver, and has historically been as expensive as gold.
Palladium – Palladium is 15 times rarer than platinum and 30 times rarer than gold. It’s used in automobile manufacturing, electronics, dentistry, and fuel cell production. Like platinum, palladium is primarily used in automotive catalytic converters.
Because physical precious metals all have industrial and commercial uses, their value is not only based on exchange rate, but also supply and demand. With a finite supply and an increasing demand, their value will continue to rise.
Because physical precious metals all have industrial and commercial uses, their value is not only based on investment demand, but also on industrial supply and demand. With a finite supply and an increasing demand, their value will continue to rise. Therefore, precious metals IRA investing is a great opportunity for diversifying your investment portfolio.
Getting Started with a Precious Metals IRA
Need additional help? Call us at 855–465-3472 or fill out the form on the right-hand side of the page to have one of our representatives provide you with a free consultation. From there:
- Once you are ready, together, we will complete the documents to set up your account and the transfer or rollover of funds from your existing IRA, 401(k), or other retirement plan to open the account. Alternatively, you can contribute funds per annual IRA limits and open a new IRA that way.
- The next step is to send back your completed paperwork and let Goldco go to work for you.
- We will open your self-directed IRA and process the necessary documents to transfer the funds from your existing account without you having to worry about paying taxes or early withdrawal penalties. Once your account is open, your representative will then be able to help you make informed decisions regarding your precious metals IRA investment choices. The entire process usually takes about 2-3 weeks.
- Once you select your metals, they will be ordered and sent to the Delaware Depository, which is a secure, IRS–approved custodial facility.
Which Products Meet IRA Standards for a Precious Metals IRA?
Although you may be keen to get in touch with precious metals brokers and start investing in products that will bulk up your precious metals IRA, it is essential that you read the IRA standards and guidelines beforehand. The following things may be assessed by the IRS when determining what products meet the precious metals IRA rules:
- Level of Purity – The precious metals in your IRA must meet a minimum fineness as stated by the IRS:
- Gold – .995
- Silver – .999
- Platinum – .9995
- Palladium – .9995
- Place of issue, e.g. Royal U.S. Mint
- The precious metals you place in your IRA must be held in the custody of an IRS approved custodian until you reach retirement age. Once you reach retirement age at 59 1/2, you can begin taking distributions either in the form of physical precious metals or you can sell them back at market price.
Do you still have questions? If so, call us at 855–465-3472 to speak with one of the precious metals investment experts at Goldco.