Expanding Investment Choices Through a Self Directed IRA

As with most things in life, today, investors are seeking more choice. Gone are the days of simply investing for retirement with just a few stocks, bonds, and mutual funds. While there are virtually thousands of choices for investing in equities, investors are still not able to obtain the true combination of diversity that they need for growth and safety of principal.

Over the past few years, savvy investors have started to add more gold and precious metals to their retirement portfolios. This has allowed these individuals to successfully add the opportunity for growth and value to their asset mix, while at the same time hedge against inflation and protect against a potential market downturns.

Investing in metals within a regular investment account can provide investors with ample benefit. Yet, doing so within a self directed IRA account can truly explode returns because along with the other advantages, investors are also able to obtain the tax related benefits that IRA investing allows them.

What is a Self Directed IRA?

Throughout the years, many investors have made their annual IRA (Individual Retirement Account) contribution and chosen what they thought were diversified investments within their accounts. Yet, most investors have been unaware that tangible assets such as gold and silver are also allowed to be placed inside of these tax advantaged retirement accounts.

In fact, many investors have been led to believe that a self directed IRA account is one in which they can choose a diversified mix of different stocks and mutual funds. However, this is not necessarily the case. In fact, a truly self directed IRA will allow investors to place a much wider mix of assets – both tangible and intangible – into the account.

Just some of these asset choices may include:

  • Gold and certain other IRS approved precious metals
  • Real estate – both residential and commercial
  • Currency
  • Private mortgage notes

How Are Self Directed IRA Accounts Different?

In their actual account structure, self directed IRAs are not really any different than regular IRA accounts. What actually makes these accounts unique is the element of control that they provide to their owners – along with the vast amount of additional investment options that they allow.

When an investor owns a self directed IRA account, it is the investor himself or herself – not the brokerage or financial institution – that makes the decisions in terms of what types of investment vehicles will go into the IRA account.

In addition, a self directed IRA may also be able to provide even more benefits to its owner by using something that is referred to as “checkbook control,” along with the ability to invest via a Limited Liability Company (LLC).

An IRA LLC is a type of self directed IRA account that is created along with an LLC. In setting up an account in this manner, the investor can invest his or her IRA funds and other discretionary funds into one single venture.

Once the IRA LLC has been set up, the account is able to start buying investments – either directly or through its custodian – as long as the account has checkbook control. This means that the IRA account owner can write checks directly from the IRA LLC when they purchase investments within the LLC.

A big advantage to doing this is that the account owner has no need to go through an intermediary to purchase the investments. It also means that the account owner may not be required to report the transaction to the IRA administrator.

Funding a Self Directed IRA

There are several ways to fund a self directed IRA account once it has been opened. One way to do so is to make an annual cash deposit. Each year, investors – within certain guidelines – can make an annual cash contribution into a traditional or a Roth IRA account.

In addition, funds may be transferred or rolled over into a self directed IRA account as well. When doing so, however, it is important for investors to note that the IRS (Internal Revenue Service) has very strict rules that pertain to IRA rollovers.

For example, should the investor take receipt of the funds rather than having the funds be directly rolled over from one financial institution to the other, the funds may be subject to immediate taxation.

In addition, the funds may also be subject to an “early withdrawal” penalty of 10 percent if the investor is under the age of 59 1/2. Oftentimes, the investor can avoid this penalty by having the funds placed into the new account within 60 days of the start of the rollover transaction.

Additional Things to Consider

While there are many advantages to owning a self directed IRA account, it is also important to note that the IRS mandates very strict rules and regulations with these types of accounts. With this in mind, there are a number of prohibited transactions in which account owners are not allowed to take part.

Some transactions that a self directed IRA account owner is not allowed to do include the following:

  • Borrow money from the account
  • Sell property to the IRA account
  • Receive any type of compensation for managing property that is owned by the IRA account
  • Live in a property that is owned by the IRA account
  • Use self directed IRA funds to pay for personal expenses
  • Use IRA funds as security for a personal loan
  • Provide services to an IRA owned investment such as property

Getting the Proper IRA Advice

Any time investors are considering moving money from one retirement plan to another, it is essential to get the proper advice. Otherwise, it is possible to end up with substantial – and unnecessary – taxes and penalties.

In order to avoid this, finding and working with a reputable and reliable self directed IRA custodian is extremely important. When considering moving funds to a gold backed IRA, for example, seeking out those custodians that have top ratings with the Better Business Bureau and TrustLink is a good way to start the search. In addition, industry reputation and customer service is also key.

Finding the Best Place to Buy Silver and Gold Metals Online

With the vast reach and convenience of the Internet, it is no wonder that consumers today are turning online for more and more of their purchases. Once looked to only for items such as books and smaller items, the Internet now offers individuals a way to shop for staples of everyday living, along with big ticket buys such as autos and homes. This also includes the purchase of retirement investments.

Yet, given that consumers are now apt to part with large sums of money sight unseen, there must also be a way to better assure buyers that they are making a safe and secure purchase – and that the entity on the other side of the transaction is reputable.

History of Online Investing

Until just a couple of decades ago, it was necessary to contact an investment broker either in person or via telephone in order to purchase or sell shares of stock or to perform any other type of investing.

Yet, by the late 1980s, the financial services industry began to see the potential of the World Wide Web. It was then that some of the first online trading companies came about where consumers could begin to make stock trades using the Internet – and in 1991, E-Trade Securities was established.

Today, there are numerous online trading brokerages where investors may buy and sell stocks, bonds, mutual funds, CDs, and more. The move to Internet buying and selling has also moved into the precious metals arena, where today there are numerous metals dealers online that offer gold, silver, platinum, and other metals for sale to investors.

In addition, many of these dealers also offer self directed IRA (Individual Retirement Account) accounts where investors can not only reap the benefits of investing in precious metals, but they can also take part in the many tax advantages – such as tax deferred or tax free investment growth – that IRA investors are provided.

Why Consider Precious Metals IRA Investing?

Precious metals IRA investing can provide several advantages over just simply putting retirement money into stocks, bonds, and mutual funds. The recently volatile stock market has put many investors’ funds at great risk – and at a time when those who are fast approaching retirement cannot afford to lose their hard earned savings.

There are a number of benefits to allocating a percentage of retirement assets to precious metals. These can include:

  • Hedge Against Inflation – An inflation hedge is considered to be an asset that has “intrinsic value.” This is because these assets, for example, gold,  are typically negatively correlated to stocks and bonds – meaning that when the price of these assets go down, the price of gold and precious metals will usually go up. Gold and other metals can be particularly beneficial for retirees who are trying to keep their retirement assets and income on par with the rising cost of goods and services over time.
  • Asset Protection – Due in large part to the reduced risk that it offers to a portfolio, adding gold and other metals will also tend to provide overall asset protection. This can be welcome to those who have spent many sleepless nights worrying over a volatile stock market in the past.
  • Additional Asset Growth – Precious metals can also provide investors with additional asset growth. For many centuries, gold, silver, and other metals have had a reputation for being a symbol of wealth. Metals – gold and silver in particular – are typically in high demand, especially in industries such as jewelry and electronics. This can tend to drive the price, and the value, of these metals up even further.

How to Compare Gold and Precious Metals Online Dealers

Prior to purchasing any type of gold or other precious metal, it is important to first ensure that the dealer you purchase it from is reputable, and that the metals are of good, high quality. Today, because so many dealers offer their metals products online, it can be more challenging to make a determination as to which company is best. However, there are some tips that can help to narrow down the choices.

When considering the best places to buy silver and gold online, there are a number of criteria that should be considered. These should include:

  • Company Background & Reputation – The company’s background and reputation is key. Here, you should check the company’s Better Business Bureau (BBB) rating and accreditation (if applicable). Typically, the BBB will rate companies based on the letters A+ through F, similar to a school report card. The BBB will also provide information on any recent complaints that have been filed and closed. Other helpful rating agencies to check can include information from TrustLink and the Business Consumer Alliance (BCA). Precious metals dealers such as Regal Assets that consistently have high rankings and zero complaints should typically be considered as a top choice.
  • Product Selection – The dealer’s product selection is also important. This is especially pertinent when investing through a precious metals IRA account because the IRS (Internal Revenue Service) has specific guidelines pertaining to which types of metals can and cannot be placed inside of an IRA account.
  • Customer Service – Certainly, the customer service that is received is also a primary factor in which company is chosen as the best place to buy silver and gold. This is especially the case for newer investors. Reps should be easily accessible – as well as knowledgeable and helpful as it pertains to questions and concerns regarding investing in precious metals, opening an IRA account, and what types of metals will work best for an investor’s particular needs and goals.

The Bottom Line

Overall, the best place to buy silver and gold will depend on an investor’s needs, experience, and goals as they relate to metals investing. With the number of online precious metals dealers growing over the past few years, it is more important than ever to perform an ample amount of research into a company prior to initiating any type of investment. This way, you will be much better assured that you are making the right move up front.

Where to Find the Best Gold and Silver Bars for Sale Online

Today’s investors are seeking investment options other than just traditional equities. Due to this, they are diversifying by using more tangible assets such as gold, silver, and other types of precious metals.

Precious metals can offer many rewards within one’s retirement account – starting with the fact that they provide the opportunity for both short and long term growth. These assets have been known for centuries as a symbol of wealth, and are anticipated to continue doing so in the future.

In addition, due to its negative correlation to the movement of stocks, gold in particular has also been seen as an ideal method of combating inflation. Many retirees, seeking a way to keep their future income on pace with the cost of living, are now finding that gold provides them a perfect solution.

Purchasing Gold and Other Metals for Retirement

Gold, silver, and other precious metals can be purchased for investment either in a regular investment account, or within one’s retirement account such as an IRA (Individual Retirement Account).

When purchasing precious metals, they can be obtained in several different forms. These include bullion, bars, and coins. The form in which they are bought by an investor will primarily depend upon the individual’s financial goals, as well as whether or not the investor intends to store the metals personally or have the metals stored elsewhere.

How to Determine Good Quality Gold and Silver

When searching for good quality gold and silver bars for sale, there are several criteria to look for. These should include:

  • Size of the Bars – One of the most important factors to consider is the actual size of the bars. Gold and silver come in various sizes, as well as different weights. For instance, these bars are typically sold in troy ounces, and are offered in increments of 1 ounce, 5 ounces, 10 ounces, and 1,000 ounce bars. There are also some mints that will offer gold and silver bars for sale in smaller fractional or gram sizes.

While there is really no specific method for purchasing gold and silver bars, because of the fabrication costs, the smaller the bar that is bought, the larger the premium will be per ounce. Therefore, for example, a 100 ounce silver bar will be less costly on a per ounce basis than a 10 ounce silver bar. The best size bar to purchase will really depend upon an investor’s reasons for buying. This will typically center on long or short term investment goals or collection purposes.

  • Precious Metals Dealer From Where the Bars Are Purchased – Another important factor to consider is where the gold and silver bars are purchased. Precious metals may be purchased in a number of different ways, including via physical retail stores and banks, as well as online from any number of precious metals dealers’ websites. Today, many investors have opted to purchase their metals online – which can offer a great deal of ease and convenience. However, it is essential to perform due diligence prior to purchasing anything via the Internet – and this is especially the case when it comes to investments such as gold and silver.

Online metals dealers will typically describe each of the metals that they have for sale, as well as show a photo of the metal, so that the investor will know what he or she is getting. When comparing different dealers, it is a good idea to research the background and the reputation of each prior to making a purchase. For example, finding out whether or not the dealer is accredited with the Better Business Bureau (BBB) is always a good idea. Here, it can also be determined if the business has any recent complaints filed against it. Product selection and customer service are also important criteria when deciding upon a precious metals dealer to work with.

  • Ease of Liquidity – The ease of liquidity is another important factor when deciding upon good quality gold and silver to purchase. This refers to the degree to which an asset or security can be bought or sold in the market without affecting the asset’s price. In other words, it is important that the gold or silver bars that are purchased can be quickly converted back to cash. With this in mind, it is always a good idea to stick with highly recognized and respected brands of gold and silver.

Buying Gold and Silver Coins

Investors will also oftentimes purchase gold and silver coins for investment, or to add to a collection. There are two primary types of gold coins to be considered. These are bullion coins and collector coins.

Investors will typically purchase gold bullion coins. This is because the prices of these particular coins are generally more transparent, as they are based upon the market price of physical investment grade gold. In most cases, the investment grade coins that are purchased and sold by investors today will have a gold content of 90 percent or more, and they are usually between 22 and 24k.

Collectors of gold coins, conversely, will usually purchase numismatic gold coins. This is because the values of these rare coins are typically more subject to factors that are outside of the gold spot price, similar to the pricing of collectible art.

How to Best Purchase Coins for Investment

There are several ways in which to purchase silver and gold coins for investment. Today, many investors choose to do so online through one (or more) of the many precious metals dealers who buy and sell items via the Internet.

Similar to with purchasing bars, it is important to compare the background and reputation of the precious metals dealer prior to making any type of gold or silver coin purchase. This includes reading any customer reviews and testimonials, as well as researching whether or not the company has had any past complaints that have or have not been resolved.

Once a reputable precious metals dealer has been found, it is a good idea to contact the company and speak with a customer service representative in order to determine their knowledge of the overall marketplace, as well as with their investment analysis skills.

An Introduction to Precious Metals IRA & Investing in IRA’s

Today, investors are seeking alternatives to equities and bonds for their IRA (Individual Retirement Account) investing. Given the recent recessionary economy, coupled with the volatile stock market, many have turned away from the more “traditional” investment options in hopes of finding a better way to grow and protect their retirement nest eggs.

The good news is that there are some savvy investors who have found a way to do just that – while at the same time benefitting from tax deferred or tax free investing – and they have done so by opening a precious metals IRA account.

What is a Precious Metals IRA?

A precious metals IRA account works in a similar fashion to a regular traditional or Roth IRA, except that it allows its owner to include gold and other qualifying precious metals. In doing so, the investor can benefit in a variety of ways, including:

  • Additional Growth Opportunity - Throughout time, gold and other precious metals have proven themselves to provide steady growth. Both the demand and the price of gold, for example, have consistently trended upward for years – and are expected to continue to do so going forward.
  • Asset Protection – Precious metals – and gold in particular – have proven to protect purchasing power, and they are also considered to be a safe haven against inflation and turbulent global economies.
  • Inflation Hedge – By adding precious metals to their retirement portfolios, investors can also add a hedge against inflation. This means that even in an inflationary environment, gold and other metals tend to maintain – or even to increase – their overall value.
  • Portfolio Diversity – Metals can also provide a nice tangible asset into the portfolio mix in order to help in diversifying one’s overall distribution of funds. This is especially the case in IRA accounts, where investments are oftentimes limited to more traditional investments such as stocks and mutual funds.
  • Tax Deferral (or Tax Free Investing) - Because these metals are placed inside of an Individual Retirement Account, they are given the same advantages that any other funds would be that are invested in an IRA account. Therefore, growth on precious metals that are inside of a traditional IRA account are allowed to grow on a tax deferred basis – and, those that are in a Roth IRA account are allowed to grow – and to be withdrawn – tax free.

What Can Be Included in a Precious Metals IRA Account?

While there are many types of gold and precious metals that can be purchased for investment, the IRS (Internal Revenue Service) has some very specific guidelines as to what can be placed into a precious metals IRA account. Therefore, investors cannot place just any type of gold, silver, or platinum into their IRA accounts.

IRA approved precious metals include the following:

Gold

  • American Gold Eagle Coins
  • Canadian Maple Leaf Coins
  • American Buffalo Bullion Gold Coins
  • Australian Kangaroo / Nugget Coins
  • Proof American Eagle Coins
  • Austrian Philharmonic Coins
  • Credit Suisse / PAMP Suisse Gold Bars
  • Various Gold Rounds and Bars .995

Silver

  • American Silver Eagle Coins
  • Canadian Maple Leaf Silver Coins
  • Proof American Eagle Coins
  • Australian Kookaburra Coins
  • Austrian Vienna Philharmonic Coins
  • Mexican Libertad Silver Bullion Coins
  • Various Silver Rounds and Bars .999

Platinum

  • American Eagle Platinum Coins
  • Canadian Platinum Maple Leaf Coins
  • Australian Koala Coins
  • Austrian Philharmonic Coins
  • Various Rounds and Bars .9995

Palladium

  • Canadian Maple Leaf Coins
  • Various Rounds and Bars .9995

Where to Open an Account

Today, there are a number of both brick and mortar and online precious metals dealers that can help investors with learning more about precious metals IRA investing, as well as with opening a precious metals IRA account.

Prior to opening an account, however, it is important to ensure that the company chosen has a good amount of experience in gold and precious metals IRA investing, as well as an excellent reputation in the industry.

Other factors to consider should include:

  • Good product selection
  • Professional and courteous customer service
  • Metals storage options
  • Low account and storage fees
  • Good reviews from the Better Business Bureau

How to Fund a Precious Metals IRA

Once the metals IRA account has been opened, there are several ways that it can be funded. An investor can actually choose one or all of these funding options. These include:

  • Direct Cash Deposit – One way to fund a precious metals IRA account is through a direct deposit of cash. Each year, IRA investors are allowed to deposit a certain amount of money into their IRA accounts. In 2014, that amount is $5,500 for those who are age 49 and younger, and $6,500 for investors who are age 50 and over. It is important to note that this is a total for all IRA accounts that an investor has. Therefore, if an investor owns two IRA accounts, he or she cannot deposit $5,500 into each of the accounts, but rather a total of $5,500 among the two in total.
  • IRA Transfer – If an investor already has another IRA account established, they can transfer some or all of the money that is in that account into the precious metals IRA account. This is a great way to help increase the amount of funds to use for purchasing metals for IRA investing.
  • IRA Rollover – Funds can also be “rolled over” from an employer sponsored retirement account such as a 401(k) plan. Here, too, is another way to greatly increase the amount of funds that are in one’s precious metals IRA account. And, while there is an annual contribution limit on the amount of direct cash that is deposited into an IRA account each year, there is no dollar amount on the amount that may be transferred or rolled over into an IRA account.

Taking the Next Step

In taking the next step towards precious metals IRA investing, investors should determine what their short and long term financial goals truly are. Then, when ready to move forward with diversity, inflationary hedges, tax deferral, and an opportunity for real investment growth, they will be able to see how investing in precious metals can help to get them there.

Silver IRAs Offer Investors A Better Way to Diversify Assets

For investors who are seeking ways to diversify their investment holdings, a gold and silver IRA account may provide the ideal answer. Today, basic bonds and equities just aren’t providing the returns that many investors are seeking.

Given the exceptionally volatile stock market of the past several years, those who are approaching retirement simply can’t afford to take any type of risky chances with their long term savings. Yet, the historically low interest rate environment of the past several years has provided investors safety with returns that are far too low to live on.

Placing gold, silver, and other types of precious metals into an Individual Retirement Account (IRA) can offer the diversity that a retirement account needs to protect assets from market downturns, while at the same time providing nice growth opportunities.

Is Silver Allowed in an IRA Account?

Although most investors may not be aware, certain types of gold, silver, and other metals are allowed to be placed inside of self directed IRA accounts. This fact is not well known because the majority of IRA accounts are opened through banks and brokerage firms – institutions that don’t typically offer precious metals as a part of their financial product inventory.

Truly self directed IRA accounts, however, allow the investor to be in charge of the investments that go into the account. With this freedom, investors are allowed to place traditional stocks, bonds, CDs, and mutual funds inside of their IRA accounts. But, they can also include other financial vehicles as well, such as:

  • Silver
  • Gold
  • Platinum
  • Palladium
  • Real Estate
  • Currency
  • Mortgage Notes
  • Commercial Paper

What Not to Include

There are some types of investments that are not allowed in a self directed IRA account, such as life insurance policies. In addition, investors are also not allowed to use certain investments in a self directed IRA account for personal use.

For example, an investor may not purchase a personal residence with IRA funds. Nor may they purchase a vacation home and own it for any type of personal use. Therefore, it is very important to understand and abide by the IRS rules as they pertain to self directed IRA investing.

How to Open a Silver IRA Account

Most traditional banks and financial institutions do not offer gold and silver IRA accounts. Therefore, investors will need to find an IRA custodian that specializes in these types of accounts in order to open their precious metals IRA.

Today, there are a growing number of gold and precious metals dealers that also offer self directed IRA accounts. These dealers have highly educated customer services representatives that will assist investors with the opening of their accounts, the account funding, and the selecting of the proper metals based on the investors’ specific short and long term financial goals.

Types of Gold and Silver IRAs

A gold and silver backed IRA can be either a traditional or a Roth IRA. The type of IRA that an investor chooses will depend upon the type of tax benefits that the investor desires and / or is eligible for.

Traditional IRA Account

With a traditional IRA account, an investor may be able, depending on IRS income guidelines, to deduct some or all of their annual IRA contribution. The funds inside of a traditional IRA account are allowed to grow on a tax deferred basis.

Upon withdrawal, the account owner will be taxed at his or her then-current ordinary income tax rate. If the account owner waits until retirement time to withdraw the IRA funds, then it is possible that they may be in a lower tax bracket than they were in at the time of contribution.

Roth IRA Account

The owner of a Roth IRA account will not be able to deduct his or her annual IRA contributions. However, the gains on the funds inside of the account will be allowed to grow tax free. Likewise, the withdrawals from the account will also be allowed to be taken on a tax free basis.

Placing Funds into an IRA Account

When ready to invest, funds must already be inside of the precious metals IRA account. This can be done in a number of different ways. Precious metals IRA funding methods can include:

  • Cash Deposit – Investors can deposit cash each year into their IRA account, up to a certain maximum. In 2014, that amount is $5,500 for investors  who are age 49 and younger. Investors who are age 50 and over may invest up to $6,500 into an IRA account.
  • IRA Transfer – Investors may also transfer funds from an existing IRA account into their precious metals IRA. This way, funds will be ready to invest. There is no dollar limitation on how much may be transferred between one IRA account and another.
  • Rollover – Funds may also be rolled over from a retirement account into an investor’s personal IRA. As an example, if an individual has funds sitting in a 401(k) plan of a former employer, those funds may be rolled over into a precious metals IRA account. There is also no dollar amount limit on how much may be rolled over into an IRA account from an employer sponsored retirement account.

How to Purchase Precious Metals for IRA Investing

Prior to purchasing any gold, silver, or other precious metals for IRA investment, it is important to first determine specific financial goals. That way, it will be easier to narrow down the type of metal (or metals) to choose, as well as the percentage of the overall portfolio to allocate to precious metals overall.

In most cases, top rated precious metals dealers such as Regal Assets will offer education to their investors on how to get started with precious metals investing, as well as how to allocate metals into an IRA portfolio.

Contacting a customer service representative and having them walk through various investment scenarios can oftentimes help with better understanding how and where to place gold, silver, and other metals into one’s overall asset allocation.

A Gold IRA Rollover Can Provide the Proper Diversification

Investors who have funds in a former employer’s 401(k) or other retirement plan are seeking options for those monies that will help them reach their retirement savings goals. In many cases, the traditional investment accounts are not meeting the goals of today’s retirement investor. Given today’s investment market and overall economic climate, other options such as a gold IRA rollover may offer a better alternative.

What is an IRA Rollover?

Technically, an IRA rollover is defined as being a transfer of funds from a retirement account into an IRA. The IRA account can be a traditional or a Roth. The rollover can occur either via a direct transfer from one financial institution to another, or it can happen by check whereby the initiating institution writes a check to the account holder who then deposits the funds into the IRA account at the other financial firm.

It is important to note that if the rollover is done via check, a 20 percent withholding penalty will be applied prior to the check being issued to the account holder. Therefore, if the account holder wants to avoid this withholding amount, he or she should consider having the rollover take place directly from one institution to the other.

In addition, while there is not a dollar amount limit in terms of funds that may be transferred into the IRA account, there are many IRAs that will only allow one rollover per year when going from one IRA account to another. In this case, the one-year calendar time frame will typically begin at the time that the initial distribution is made.

IRA Rollover Advantages

There are a number of advantages to rolling funds over into an IRA account. One of the biggest benefits is that by having funds in one’s own IRA, an investor can choose from a much wider variety of investment vehicles.

For example, if the funds were coming out of a former employer’s 401(k) plan, it is likely that the investor’s choices were limited only to just a few mutual funds and the employer’s stock shares (if applicable).

In addition to having more investment choices, the investor will still be able to have all of the tax related advantages that come with IRA investing. These will differ somewhat, however, depending on the type of IRA that is owned. For example:

  • Traditional IRA Account – With a traditional IRA account, the investor (if within certain income guidelines) may be able to deduct his or her annual contribution. The funds that are inside of the traditional IRA account are allowed to grow on a tax deferred basis. This can essentially allow assets to truly compound over time.
  • Roth IRA Account – Those who own a Roth IRA account are not able to deduct their annual contributions. However, the funds that are inside of the account are able to grow tax free. In addition, withdrawals from a Roth IRA are also allowed to come out on a tax free basis.

The Benefits of Adding Precious Metals to a Retirement Portfolio

While many investors see the benefit of rolling funds into their own IRA accounts, these accounts are not always funded to their fullest advantage. Oftentimes, investors attempt to diversify by placing a mix of stocks, bonds, and mutual funds into their traditional or Roth IRA accounts. However, this is typically not enough.

One way to add diversity to an Individual Retirement Account, while at the same time providing an opportunity for growth and protecting other portfolio assets is to include gold or other precious metals.

For many years, gold and other metals have provided investors with the ability to grow their assets’ value, while also hedging against inflation and providing protection against a volatile stock market and unstable economy overall.

How to Get Started with a Gold IRA Rollover

In order to initiate a gold IRA rollover, investors must first locate a custodian that specializes in self directed IRA accounts. These IRAs differ somewhat from regular traditional or Roth IRAs in that the individual investor is fully in charge of making all of the investment decisions. Because of this, the investor has a much greater opportunity to diversify the account assets, and can add vehicles such as gold, silver, and other precious metals.

Many gold and precious metals IRA custodians such as Regal Assets will provide the paperwork that is necessary to open an account directly on their website. This way, investors can begin the process of getting the IRA account opened.

Funding a Gold IRA

Once the gold IRA account has been open, there are several ways to fund the account. These include:

  • Annual Cash Contribution – An annual cash contribution can be made by the investor. In 2014, that amount is a maximum of $5,500 for investors who are age 49 and under, and $6,500 for those who are age 50 and over.
  • IRA Transfer – Investors can also transfer funds from an existing IRA account into their new gold backed IRA account. When an IRA transfer occurs, funds will move directly from one IRA custodian to another. The investor will not take receipt of the funds at any time during an IRA transfer.
  • Rollover – Funds from a retirement plan may also be rolled over into a gold IRA account. With this option, an investor can truly boost the amount of funds that he or she has inside of the account with which to purchase gold and other precious metals. The gold IRA rollover can be performed without triggering any tax penalties. It is important that the process be completed, from start to finish, within 60 days. In addition, rollovers can only be performed with the same money one time every 12 months. Otherwise, the investor will lose the tax deferred status of those funds.

Taking the Next Step

In taking the next step towards creating true diversity in one’s retirement IRA account, a gold backed IRA should be highly considered. Precious metals have been considered a symbol of wealth for many centuries – and they are expected to continue their path of growth in the future.

5 Key Tips for Safely & Easily Buying Silver Bullion Online

Just like gold and other precious metals, silver can also be used for investment. For many centuries, this metal has been regarded as a store of value, as well as a symbol of wealth in many areas. This metal is also used in the manufacturing of numerous products, including jewelry.

Every year, there are millions of American Silver Eagle and Canadian Maple Leaf silver coins that are purchased by investors. These particular coins can also be used as legal tender and for paying off debts in some instances.

As with many other commodities, the price of silver is based upon supply and demand, as well as by speculation. And, as compared with gold, the price of silver can oftentimes be somewhat more volatile. Therefore, prior to purchasing this metal as an investment, it is important to understand how it is priced, as well as where it may fit into an overall investment strategy.

1. Understand How Silver is Priced

Before purchasing any type of investment, it is important to have a good understanding of how it is priced. Due in large part to its lower market liquidity, silver’s price tends to more up and down much more than that of gold on a daily basis – even though it generally tracks the price of gold due to the store of value demand.

Some of the primary factors that can influence the price of silver can include:

  • Large investors – The silver market is much smaller in value than that for gold. Therefore, when large institutional traders purchase or sell their holdings, it can have an effect on the overall price of silver itself.
  • Short selling – Oftentimes, if larger traders are speculating on the price of silver, this too can have an overall effect on its price.
  • Demand (both consumer and industrial) – Just as with most other products and services, the price of silver will also be largely dependent upon its demand by both consumers and industry.

2. Open an Investment Account

When purchasing silver, investors can do so by buying it outright, or through a retirement account. When purchasing it outright, investors can reap the benefits of growth on the metal. However, what many investors may not realize is that if they purchase silver within an IRA (Individual Retirement Account), they can also obtain all of the tax advantages – such as tax deferred or tax free growth – that IRA investing can offer, too.

3. Decide on a Good Quality Precious Metals Dealer

When purchasing silver bullion in a precious metals IRA account, the account will need to be opened through a company that specializes in these types of accounts. Typically, most banks and traditional brokerage firms do not deal in precious metals IRAs. Therefore, it will be necessary to locate a company that does so.

Over the past several years, due in large part to the growing popularity of precious metals investing, many metals dealers have begun to offer IRA accounts. Most companies may be found online – and they will generally offer the paperwork that is necessary to open the accounts directly via their websites.

Prior to moving forward with opening a precious metals IRA account, a proper amount of due diligence should be done on several companies in order to determine their backgrounds and reputation in the industry.

Companies such as Regal Assets will typically show up as being the top contenders, with high ratings from the Better Business Bureau (BBB) and TrustLink, and a zero history of customer complaints. It is this type of company that you will want to stick with when investing in precious metals for retirement.

4. Fund the IRA Account

Once the IRA account has been opened, there are three ways to fund it. These include:

  • Cash Deposit – IRA account holders are allowed to make cash deposits each year – up to an annual maximum amount. In 2014, this amount is $5,500. (For investors who are age 50 and over, an additional “catch up” contribution of $1,000 is allowed to be made).
  • IRA Transfer – If an investor already has one or more IRA accounts established, then he or she may transfer funds from those accounts into their precious metals IRA account. This is a great way to boost the amount of funds that are inside of the new IRA for investment in silver, gold, or other precious metals.
  • Rollover – Funds may also be “rolled over” from retirement accounts such as an employer sponsored 401(k) plan. Here, too, is another way to greatly increase the amount of precious metals IRA funds. This is because there is no dollar amount limit on the amount of funds that may be rolled into an IRA account.

5. Make the Metals Purchase

After the precious metals account has been funded, buying silver bullion and other precious metals can begin. For newer metals investors, this may require additional education on which particular metals will work best, depending on long and short term investment goals.

In many cases, the precious metals dealers will have customer service representatives that can assist with choosing which metals will – and will not – be best in certain situations. In addition, if metals will be purchased inside of an IRA account, there are also IRS (Internal Revenue Service) guidelines that state the type of metals that can and cannot be placed within a precious metals Individual Retirement Account.

The Bottom Line

Buying silver bullion, along with other types of precious metals, can be a smart move for investors. Doing so can help to offset the up and down movements that have recently been seen in stock market equities, as well as the economy as a whole.

By investing a percentage of one’s retirement portfolio in precious metals, an investor will typically see an increased opportunity for growth, along with a nice hedge against inflation and a way to protect other retirement assets. Overall, this can offer investors a tremendous peace of mind with their portfolio as they move towards retirement.

Rolling Over 401k Into a Gold IRA Provides Needed Diversity

Even in light of the recent recovery, the economic recession of 2008 and 2009 is still having an effect on many companies – both large and small – throughout the United States. Because of this, many employers are still being forced to close their doors – or at the very least, let go of a percentage of their work force.

A majority of these employees who have found themselves without employment have at least had the opportunity to walk away with assets from an employer-sponsored retirement plan – and are now seeking options for where to go with such funds in order to both enhance and protect them as they move towards retirement.

Options for Employer Sponsored Retirement Funds

When leaving an employer, many individuals have funds in a retirement account such as a 401k or 403b plan. Oftentimes, employees are unsure of what to do with these funds. In most cases, an individual will have four options. These include:

  • Cash Out / Take Receipt of the Funds – One option is to simply take receipt of the funds and to cash out. Yet, while this may sound appealing, it is typically the worst of the possible options for most investors. This is because it will result in taxation of the funds at the investor’s regular income tax rate. In addition, if the individual is under the age of 59 1/2, he or she will also be required to pay an additional 10 percent “early withdrawal” penalty of the funds. Given the taxes and penalty amounts, an investor could end up losing almost half of the total amount of their funds if they choose this particular option.
  • Leave the Funds with the Employer – Individuals may also opt to leave their funds with their former employer. Doing so will allow them to continue investing in the same investment options as they always have. It, however, does not allow them a very wide variety of investment choices, as it limits the investor only to what the employer offers as its retirement plan investment choices.
  • Move Funds Over to the New Employer – If the individual’s new employer offers a 401k or other type of retirement plan, it is possible that the funds could be transferred over into the new plan. Yet, while this is convenient and puts all of an individual’s retirement funds in one place, it still limits the investor to only what the new employer offers in terms of investment choices.
  • Rollover Funds to an IRA Account – Rolling the funds over to a personal IRA account will provide the investor with the most overall choice and control. This is especially the case if the investor opts to go with a self-directed IRA account. Here, the investor will be allowed to invest in traditional financial vehicles such as stocks, bonds, and mutual funds, as well as tangible assets such as real estate, gold, and other precious metals. This will provide the ability to diversify the portfolio, which will in turn help to both grow and protect assets.

How a 401k Rollover Works

A 401(k) rollover is essentially a transfer of funds from a retirement fund into an IRA (Individual Retirement Account) account. The IRA can be either a traditional or a Roth. The rollover of funds may occur either via a direct transfer of funds from one institution to another. Or, it may alternatively occur by check. In this case, the custodian of the distributing institution will write a check to the account holder who will then deposit the check into the IRA account at the new financial institution or entity.

In the case of the transfer being done with a check, there will be a tax withholding of 20 percent of the funds prior to the funds being issued. Therefore, if the investor wishes to avoid this 20 percent withholding, it is best to go the route of the direct rollover.

What is a Gold Backed IRA?

Many individuals are considering gold backed IRAs for at least some of their retirement funds. These Individual Retirement Accounts hold a percentage of their assets in gold and other precious metals, while at the same time allowing the same tax advantages as regular traditional or Roth IRA accounts.

Most banks and brokerage firms do not offer this type of IRA account. Rather, investors must open accounts through specialized IRA custodians that focus on gold and precious metals IRA accounts. These firms will typically be able to offer a whole line of services, from opening the IRA account, to choosing and investing in the proper metals based on the investor’s particular short and long term financial goals.

Why Consider Gold Backed IRA for Retirement Funds?

Today, as the stock market continues its volatile ride, many investors are considering gold back IRAs for at least a portion of their retirement funds. One reason for this is because gold offers the opportunity for growth and increased value – just as it has for centuries.

In addition, gold provides additional benefit as well, including asset protection and a hedge against inflation. Because gold has traditionally moved in the opposite direction as the stock market, it has also provided investors with a great way to diversify their equity portfolios – and this is a welcome addition for most investors who are quickly approaching retirement and need stability in their overall asset mix.

How to Get Started

If considering rolling over 401k funds, it is important to first discuss the available options with the former employer or the institution from which the funds will be coming. There will likely be transfer paperwork involved.

Likewise, a new IRA custodian that specializes in gold backed IRA accounts must also be chosen. In most cases, the account representatives at these firms can walk investors through the IRA rollover process, as well as getting the account properly funded.

Once the funds have been rolled into the gold IRA account, investors can choose from the many IRS (Internal Revenue Service) approved gold and other metals that are allowed to be placed into a precious metals IRA accounts so that proper growth and diversification can begin to take place.

Gold IRA Investment and Investing Can Provide High Returns

Investing for retirement is something that most investors strive for. Setting aside “something for the future” starts for many people at a relatively young age – and for savvy investors who understand that the sooner they start, the less they will need to invest, there some interesting choices being made in terms of financial vehicles.

Back in the 1990, most investors turned to equities as their vehicles of choice. The bull market seemed to have no end in sight – which left many unprepared investors with substantial losses when the market downturn finally did hit in the early 2000s and again in 2008 and 2009.

Today, investors understand that in order to be truly successful, it is necessary to diversify the assets in their portfolios. This does not mean choosing different types of stocks or mutual funds, though, but rather different types of assets altogether.

Why Gold? Why Not!

One way that investors are successfully diversifying and spreading the risk is by adding gold and other precious metals to their portfolio mix. Gold has provided investors with the opportunity for growth for many centuries, and it continues to do so today.

In addition to growth, though, investors are turning to gold for a variety of other reasons as well. Some of these include:

  • Diversification – Gold allows investors an opportunity to diversity the assets in their portfolio. In fact, one of the best ways to ensure that assets are properly allocated and diversified is by choosing vehicles that are not too closely related. Due to the fact that gold has always been correlated negatively with the movement of stocks, it can provide investors with an ideal way to diversify a primarily equity-filled portfolio. By placing gold into an IRA account, it can reduce both the risk and the overall volatility by a substantial degree.
  • Hedge Against Inflation – For many years, gold has also been used by investors as an inflationary hedge. The key reason for this is because gold’s value traditionally goes up when the cost of living rises. Therefore, by adding gold into one’s investment portfolio, it can help to keep pace with the ever rising cost of goods and services over time. This can be especially beneficial for those who are retired or who are approaching retirement in their lives.
  • Asset Protection – Gold can also be used as an asset protector in an investment portfolio. This is due in large part to its diversity and reduced risk.

 

Making Gold IRA Investments

Over the past four decades, one of the most popular ways to invest for retirement has been through the IRA, or Individual Retirement Account. Since the creation of the IRA back in 1974, many investors have faithfully contributed to their accounts each year.

Because such accounts are typically opened and managed via traditional financial institutions such as banks and brokerage firms, the investments that are chosen to be placed inside IRAs have most often consisted of equities – such as mutual funds and stocks – and bonds.

One reason for this is that banks and brokerage firms can typically only offer these types of assets to their customers. Another reason is that there are many financial professionals who are just simply not aware that gold and other precious metals are in fact allowed to be placed inside of certain types of IRA accounts.

But, contrary to what some may believe, the IRS actually does not place very many limits at all on the types of assets that can be placed inside of a self directed IRA account – and there are some IRA custodians that will allow these other types of assets such as gold and precious metals. In doing so, not only can investors reap the benefits of investing in these particular assets, but they can also obtain the benefits of tax deductions and tax deferred (or tax free) profits that apply to IRA investing.

The good news is that this type of investing has the potential for truly great profit. By combining the tax advantages of having a self directed IRA account with the appreciation potential of gold and other precious metals investments, investors can vastly benefit – and at the same time, they can also be in charge of what goes in and comes out of the account itself.

IRS Gold IRA Requirements

When adding gold to an IRA account, the IRS (Internal Revenue Service) has some fairly strict guidelines that stipulate what types of metals are allowed to be placed inside of the account. In addition, the metals must also meet a certain standards for fineness.

Allowable metals per IRS requirements include the following:

  • American Eagle Gold Coins
  • American Eagle Silver Coins
  • Canadian Maple Leaf Gold Coins
  • Canadian Maple Leaf Silver Coins
  • Austrian Philharmonic Gold Coins
  • Austrian Philharmonic Silver Coins
  • Gold and silver bars from various recognized refiners
  • American Eagle Platinum Coins
  • Canadian Maple Leaf Platinum Coins
  • Isle of Man Noble Platinum Coins
  • Platinum bars from various recognized refiners
  • Canadian Maple Leaf Palladium Coins
  • Palladium bars from various recognized refiners

Per the Internal Revenue Service, precious metals fineness standards include:

  • Gold – .995 percent or higher
  • Silver – .999 percent or higher
  • Platinum – .9995 percent or higher
  • Palladium – .9995 percent or higher

How to Get Started

There are numerous benefits to gold IRA investment – starting with the many advantages that owning gold can provide, and then coupled with the added tax incentives that owning this vehicle inside of an Individual Retirement Account can offer.

Opening a gold backed IRA account is easy. Today, there are many gold IRA companies that can be found online. Investors can narrow down their search by seeking the companies such as Regal Assets that are highly rated by the Better Business Bureau (BBB) and TrustLink and that have outstanding reputations for their customer service.

Most companies provide the IRA account paperwork directly on their website. This way, investors can get the process started quickly and easily. Once the account has been opened and funded, investors can begin to invest in the metals that will best serve their specific financial needs and goals for both the short and long term time horizons.

Diversify Retirement Assets with a Gold Backed IRA Account

Today’s investors are seeking much more variety in their portfolios than what they can get by investing in stocks, bonds, and mutual funds. While these more “traditional” investment options may have provided nice returns a decade or two ago, they have recently caused investors numerous sleepless nights, with very little return to show for it.

Given that, many investors have begun to look towards gold and other precious metals for their retirement portfolios. Metals have long been an investment option that has offered the opportunity for both growth and protection – and today it has again become an asset of choice, especially for those who are fast approaching retirement.

Where Gold Fits into a Retirement Portfolio

There are a number of advantages to adding gold into one’s retirement portfolio. These can include:

  • Growth – Throughout history, gold has had the ability to maintain – and to continually increase – its value. This is why gold is oftentimes seen as way to preserve and pass on wealth from one generation to another.
  • Diversification – Due to its negative correlation to stocks, gold is seen as a way to diversify a portfolio. This is why adding gold to a portfolio that already contains more “traditional” investment vehicles like stocks and bonds can help in reducing overall volatility, as well as risk.
  • Asset Protection – Because of diversity and reduced risk, gold is also essentially seen as a way to protect portfolio assets overall.
  • Hedge Against Inflation – Gold has also been a great tool for hedging against inflation. This is because the price of gold has always tended to increase when the cost of living goes up.
  • Supply versus Demand – Over the past several years, the increased wealth of many emerging markets has increased the demand – and therefore the price and the value – of gold. This has in turn increased the demand for this metal among investors.

How a Gold Backed IRA Works

Many investors are already familiar with the IRA, or Individual Retirement Account. Since their beginnings in the mid-1970s, these accounts have offered investors the opportunity to set aside funds and allow them to grow on a tax deferred basis until withdrawal.

A gold backed IRA can be set up as either a traditional or a Roth IRA, providing all of the same tax related benefits that these types of IRA accounts allow. For example:

Traditional IRA

With a traditional IRA, many investors are allowed (based on certain income guidelines), to deduct some or all of their annual contribution. Gains in the account are allowed to grow tax deferred, which can help to really compound the growth in the account over time.

Roth IRA

Those who own a Roth IRA are not allowed to deduct their annual contributions. However, gains in the account are allowed to grow on a tax free basis, and the withdrawals from the account are also allowed to come out tax free. This can be a substantial benefit to retirees who are living on a fixed income and need as much income as possible, without having to hand over a percentage of that income in tax.

For both a traditional and a Roth IRA, investors can contribute a certain amount each year – up to a maximum annual limit. For 2014, this limit is $5,500 for investors who are age 49 and under, and $6,500 for those who are age 50 and over.

Allowable Metals

When investing in a gold backed IRA, it is important to follow the rules that are set forth by the IRS (Internal Revenue Service) in terms of what is – and is not – allowed to be placed inside of the account. This is because not all types of metals are IRS approved for inclusion in a self-directed IRA.

According to the IRS, the allowable types of gold that may be placed in an IRA account include the following:

  • American Eagle coins
  • Canadian Maple Leaf coins
  • Australian Kangaroo Nugget coins
  • Austrian Philharmonic coins
  • U.S. Buffalo Gold Uncirculated coins (not including proofs)
  • Credit Suisse – Pamp Suisse Bars .999
  • Bars and rounds that are manufactured by either a NYMEX or a COMEX approved refiner or assayer, or by a national government mint and that meet the minimum standards for fineness

In addition to gold, investors may also place silver, platinum, and palladium metals into a precious metals IRA account as well. The allowable metals in these categories include:

Silver

  • American Eagle coins
  • Canadian Maple Leaf coins
  • Australian Kangaroo Nugget coins
  • Austrian Philharmonic coins
  • Mexican Libertad coins
  • Bars and rounds that are manufactured by either a NYMEX or a COMEX approved refiner or assayer, or by a national government mint and that meet the minimum standards for fineness

Platinum

  • American Eagle coins
  • Canadian Maple Leaf coins
  • Australian Kangaroo Nugget coins
  • Austrian Philharmonic coins
  • Isle of Man Noble coins
  • Bars and rounds that are manufactured by either a NYMEX or a COMEX approved refiner or assayer, or by a national government mint and that meet the minimum standards for fineness

Palladium

  • Bars and rounds that are manufactured by either a NYMEX or a COMEX approved refiner or assayer, or by a national government mint and that meet the minimum standards for fineness

Based on Internal Revenue Service rules, the minimum fineness standards for precious metals IRAs is .995 for gold, .999 for silver, .9995 for platinum, and .9995 for palladium.

It is important that investors follow the rules regarding what types of metals can and cannot be placed inside of their gold backed IRA accounts. Otherwise, they could lose the tax advantaged status of their IRA account if it is discovered that a non-allowed metal has been placed inside of the account, either intentionally or unintentionally.

The Bottom Line

When investors are contemplating what type of financial vehicles to include in their Individual Retirement Accounts, gold and other precious metals should be highly considered. This is because these vehicles can provide a number of advantages that more traditional options such as stocks, bonds, and mutual funds simply cannot – and metals can offer these benefits without all of the ups and downs and vast volatility that is oftentimes found by investing in the stock market.