What Is a Silver IRA?

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 investments. With stocks subject to the volatility inherent in the booms and busts of the business cycle, they can be a great way to make money during the boom phase and a great way to lose money during the bust phase. So why not make money during the boom and avoid the bust altogether?

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That’s what a physical silver IRA allows you to do, allowing you to roll over existing retirement assets into silver investments tax-free. By investing in silver, investors can lock in the gains they made through stock investments in a 401(k), 403(b), TSP or similar retirement account, while benefiting from the stability that silver offers.

With a silver IRA, investors can enjoy all the same tax benefits as a traditional IRA, including being able to use pre-tax dollars to invest, and deferring taxation until distribution time. But they gain the peace of mind that comes from their investments being made in physical silver, which over the course of time maintains its value better than any paper asset could ever hope to.

A silver IRA isn’t a paper investment 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 that role in protecting investor finances for centuries and will continue to do so in the future.

Silver IRA vs. Traditional IRA

Traditional IRA accounts invest heavily in paper assets: stocks, bonds, mutual funds, CDs, etc. All of those are heavily dependent on the health of Wall Street for their value. When the economy starts to perform poorly, all 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.

Silver is in demand not just from investors 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 will make up a large part of increasing silver demand, helping to ensure that silver’s value will continue to rise.

silver-demand-in-solar-panel-industry

Benefits of a Silver IRA

Silver has been an important monetary metal and investment asset for centuries, right alongside gold. Investors who know that paper assets can all too often become worthless appreciate silver for its ability to maintain its value over time. And because it is far less expensive than gold, investors can buy a lot of it for relatively reasonable sums of money.

A silver IRA allows investors to take advantage of silver’s maintenance of value in order to diversify and protect their retirement savings portfolio. Proper diversification doesn’t mean just mixing up the percentage of stocks vs. bonds that you hold, it means diversifying into different asset classes, such as precious metals like gold and silver. Investing in gold and silver is one of the easiest ways to diversify your investment 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 401(k)-type retirement accounts and protect your retirement savings from plunges in stock markets. And once you get your feet wet with a silver IRA and feel comfortable with precious metals, you can also begin to invest in gold, platinum, and other precious metals.

A silver IRA offers all the same benefits as a traditional IRA, such as using pre-tax dollars and deferring taxation until distribution time. You can even roll over existing retirement savings such as a 401(k) into a silver IRA tax-free. That allows you to benefit from silver’s potential future price growth while keeping your gains sheltered from taxation until you retire.

Silver’s strongest price growth often comes when stock markets aren’t performing well, which makes silver a perfect countercyclical asset in which to invest when stock markets are due for a crash. With stock markets continuing to plateau and failing to continue their growth, the stage is set for a crash in the near future. Once that happens, silver’s price will appreciate significantly as investors flock to it as a safe haven asset.

Silver also acts 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 nearly $12 worth of silver, while a paper dollar has lost over 96% of its value since 1913.

Silver IRA Rules

While a silver IRA offers the same benefits as a traditional IRA, it is also subject to the same rules as a traditional IRA. That means that any distributions you take before age 59 ½ are subject to a 10% penalty, and you have to take required minimum distributions after age 70 ½. Your annual contributions are also limited to $6,000 per year ($7,000 if you’re older than 50) across all your IRAs. But rollover amounts remain unlimited and tax-free.

Silver owned by your silver IRA must be stored by an IRS-approved custodian, so silver you already own isn’t eligible to be placed into a new silver IRA. Nor can you keep the silver you purchase for your silver IRA at home. But once you take a distribution you can choose to take the distribution in cash or in silver. The types of silver you’re allowed to invest in also have to meet IRS standards, which means that most collectible coins and circulating silver coinage isn’t eligible for investment.

That still allows you to invest in a number of IRA-approved silver coins such as the Silver American Eagle, Canadian Silver Maple Leaf, and Austrian Silver Philharmonic. You can even invest in silver rounds and bars, as long as they meet the IRS standards for a minimum .999 fineness. The silver experts at Goldco can ensure that you make the right choices when it comes to buying silver for your portfolio, so that you can rest assured that the silver in your IRA will go to work for you, protecting your retirement savings.

Investing in a silver IRA doesn’t have to be difficult. While it may take a few more steps than opening up a traditional IRA with a brokerage, the result is an investment vehicle that lets you invest in what you want, when you want it. You are fully in control of your investments, what you want to buy, and when you decide to sell.

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If you want the peace of mind that comes from knowing that your retirement savings will be safe and protected, then you need to start thinking about investing in silver today. Contact the experts at Goldco to find out more about how you can invest in a silver IRA to protect your dreams of a long and enjoyable retirement.