Top 10 FAQ about investing in precious metals in an IRA
1) What is an IRA?
An IRA is an individual retirement account. It is a personal retirement plan to which an individual contributes – sometimes with an employer – sometimes alone. The resulting fund which is accrued over many years becomes the pool of money for your retirement. From this pool and annuity is taken on a weekly, monthly, or annual basis to replace your working income.
2) How can I set up a precious metals IRA?
Simply find a company on the internet that deals with precious metal IRAs and 401(k) rollovers. These are advertised constantly – another alternative is by recommendation – or by reading the financial press. You can then check the company out on ratings sites to ensure that they are genuine. The company will advise you on the paperwork involved in making the transfer.
3) Who is eligible for a precious metals IRA?
There is no cut and dried answer to this. In theory, anyone in regular employment either as an employee or self-employed is eligible to make contributions. It is always best to check with an adviser as to your eligibility as the IRS can be quite strict with its rules – and can apply severe penalties for illegal schemes. Any CPA or attorney should be able to advise on this.
4) What do I do with the metals for my IRA?
You cannot keep the metals yourself. You have to have them stored by a third-party who does not own the metals. Most people get their trustees to place the metal in segregated storage in a dedicated gold bullion depository vault. These are highly secure, and will give you peace of mind, knowing that your bullion is safe.
5) When is the best time to buy a precious metals IRA?
As with all investments, the power of compound interest means that the earlier you start your precious metals IRA, the more chance you have of making more money. Leaving it later means that you have to contribute more to achieve the same result. Ideally you should aim to put the maximum that you can into the IRA or 401(k) rollover. This will enhance your final pension.
6) How do I sell the precious metals in my IRA?
It is a little known fact, that you don’t actually have to! If you want, you can ask for your gold or silver to be delivered to you when it becomes eligible for payment. The original gold company that you bought it from should have a buyback scheme for its customers. If not, just contact gold brokers, dealers, even jewellers, to get the best deal.
7) Can I pass my precious metals IRA onto my children?
There is, what is known as, the five year rule. After somebody’s death the IRA is subject to taxes on inheritance inside of a five year period. Non-spouse beneficiaries have to take the first of any required RMDs by December 31st of the calendar year following the year the original owner of the IRA died. It is best to seek legal advice before taking out an IRA in regard to inheritance – equally – take legal advice afterwards.
8) What are the charges associated with holding precious metals in an IRA?
There is an initial setup fee to pay the trustees to complete the initial paperwork. There is an ongoing annual charge to the trustees. There is a fee for storing any precious metals in a bullion depository – the fee for this includes any insurance. Ask the company organising your gold purchase for a full breakdown of the charges before you proceed.
9) Is the precious metals business regulated?
Not in the same way as the stock market, for example.all the usual business practices and regulations apply but there are no specific financial regulations or checks. Word-of-mouth and reviews and ratings are a good way to find out the reputation of the company you choose. Companies do have to act within the legal framework of the United States.
10) Is now a good time to buy a precious metals IRA?
We believe gold and silver are currently undervalued. This means that any problems in the world markets will send the prices higher. With the world markets being so uncertain at the moment – and the threat of wars – we believe now is a good time to buy gold or silver.