Often, investors are unsure what type of silver they should invest in. This is an understandable concern as the precious metal market can feel overwhelming at first.
Fortunately, some options often provide better value for your investment dollars than others. IRA-approved silver is one of those options. Here's what you need to know about IRA-approved silver and how it fits into your retirement strategy.
Contents
What Is IRA Approved Silver?
IRA-approved silver refers to any form of physical bullion that meets certain specifications required by the IRS for inclusion within a self-directed Individual Retirement Account. As with other forms of precious metals, IRAs offer tax incentives on long-term gains and capital gains.
A Silver precious metals IRA, also referred to as Gold IRA or a Silver IRA, is a tax-advantaged retirement account that allows an individual to invest in physical silver and other eligible precious metals, such as gold and palladium.
IRA-Approved Silver Coins VS Gold Bullion
There are generally two types of IRA-approved silver: coins and bullion. Both offer advantages over another depending on the investor's preference and trading strategies; however, there are factors that can help determine which option is best for you.
The main difference between coins and bullion comes down to liquidity. It can often be easier to find buyers with rarer coins if you need to sell your holdings rather quickly due to the pre-established collector demand for these products. This means they can often be more liquid than gold bullion.
It is not unheard of that coins sell for 5-10% more than the spot price at times, depending on their popularity and rarity within collector circles. On the other hand, Gold bullion can be much harder to sell but tends to carry higher premiums due to low supply and strong global demand, so you tend to make more significant returns over time.
Some IRA custodians will offer both coin and bullion options, while others only allow one opportunity. If you decide that coins are the right investment vehicle for you, many IRA custodians will allow you to swap out long-term holdings for another type of product should your goals change over time.
IRS Requirements for Silver Coins
For a coin to be IRA-approved silver, it must be composed of .999 fine silver and meet the following requirements
Must Be issued by a sovereign government
Have a legal tender currency denomination, or face value
Resemble an official currency coin with its diameter dimensions and metal composition specifications
List of Steps
May not be produced as bullion rounds or bars
Must not have been previously used as currency
Not be altered other than reeding (for example, engraving) under U.S. Treasury Department regulations
Finally It Must pass all weight, size, bonding status, assay, pressure test, similarity to coins in general circulation.
IRA-approved Silver Coins And Bullion Coins
Bullion coins are typically made from .999 fine silver but are not considered IRA-approved until they have met the following requirements:
Be issued by a sovereign government
Resemble an official currency coin with its diameter dimensions and metal composition specifications
May not be produced as bullion rounds or bars
Here's a detailed list of popular silver bullion coins eligible to be deposited into an IRA account:
In addition, there are also popular silver bars that the IRS has approved. It is typically straightforward to purchase and sell IRA-approved silver coins in more significant amounts with a fixed price from a primary dealer with little slippage in the spread.
Each Morgan dollar comprises .900 fine silver (90% pure) and contains 0.77344 troy ounces (22.68 grams) of pure silver.
The coin's market value depends on several factors, including the coin's condition, which dictates its "grade." A Morgan dollar in Choice Uncirculated condition could sell for $200 or more at auction, whereas a heavily damaged example might fetch just $25 or less.
Another factor that determines price is how many Morgans are available on the open market to purchase; naturally, coins with higher mintage numbers tend to be less valuable than those with lower mintages due to their availability also, since there is still some numismatic demand for these coins.
The Peace dollar contains .77344 troy ounces of pure silver (90% fine) and has a diameter of 38.1mm or 1.5 inches. Each coin weighs 26.73 grams, which is slightly heavier than the Morgan dollar's 26.73 grams due to some design changes on the Peace dollar.
These include a lack of raised edges on both sides compared to the Morgan dollar, which has them on its obverse side only, as well as thicker lettering around the word "dollar."
Anthony De Francisci designed the Peace dollar, but its mintage numbers are not available because it never went into circulation since it was made exclusively for collectors at its inception in 1921 (the year after production began).
The American Silver Eagle, the official silver bullion coin of the United States, contains one troy ounce of .999 fine silver. It has a diameter of 40.6mm or 1.598 inches and weighs 31.10 grams on average.
It is the only American coin currently being produced that meets all IRS standards for approved IRA investment coins because an Act of Congress authorized it in late 1985 as part of the "Liberty Coin Act." Its design has changed every year since its debut in 1986. Still, they are always based on Adolph A. Weinman's depiction of Lady Liberty walking toward a rising sun while carrying laurel branches in her right hand and an oak branch in her left hand, holding them up in the air to symbolize American patriotism.
An advantage of this coin is that it can be bought and sold like other silver bullion coins (more details in the section below). However, unlike the rest, it does not have an "assayed" value; instead, its face value is $1 (this applies to all U.S. Mint coins).
A notable drawback of this coin is that it has a high premium because available supplies often limit sales. It might make it harder for you to source large quantities without the help of a dealer or broker who specializes in IRA-approved silver investments.
Coins made using .999 fine silver are among the most popular choices when investing with an IRA. However, their premiums usually run high.
The Silver Vienna Philharmonic contains one troy ounce (31.103 grams) of .999 fine silver and has a diameter of 32.69 mm or 1.29 inches. The coin's market value looks at several factors: the condition it is in, including any proof-like characteristics, its mintage number that you can check online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $35 and $45 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because it was not available until 2008. Therefore only a small number were minted initially. This can often indicate future appreciation in value for this coin.
It is currently the only official investment-grade silver bullion coin that uses .999 fine silver. It introduces many interested investors to a product they can trust after being exposed to less pure forms of silver. However, some people have questioned its purity because it might not be as pure as advertised unless they can obtain preliminary information from the Austrian Mint about its purity procedures. There are also rumours that the Mint only produces enough coins each year to satisfy demand, resulting in future shortages and higher costs.
The Silver Koala contains one troy ounce of .999 fine silver and has a diameter of 32.05 mm or 1.26 inches. The coin's market value is based on several factors: the condition it is in, including any proof-like characteristics, its mintage number (which can be found by checking online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $25 and $35 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was not minted until 2007, so only a small number were made initially. This can often indicate future appreciation in value for this coin.
The Silver Lunar Series one contains one troy ounce of .999 fine silver and has a diameter of 32.65 mm or 1.29 inches. The coin's market value is based on several factors: the condition it is in, including any proof-like characteristics, its mintage number (which can be found by checking online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $30 and $50 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was introduced in 2007, so only a small number were made initially. This can often indicate future appreciation in value for this coin.
The Silver Maple Leaf contains one troy ounce of .9999 fine silver and has a diameter of 30.0mm or 1.18 inches. The coin's market value is based on several factors: the condition it is in, including any proof-like characteristics, its mintage number (which can be found by checking online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $20 and $25 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was not minted until 1979, so only a small number were made initially.
Its current price varies between $15 and $25 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was not minted until 1982, so only a small number were made initially. This can often indicate future appreciation in value for this coin.
American Silver Eagle
The Silver American Eagle contains one troy ounce of .999 fine silver, has a diameter of 1.598 inches or 40.60mm, and weighs 31.10 grams or 1.09 ounces. The coin's market value is based on several factors: the condition it is in, including any proof-like characteristics, its mintage number (which can be found by checking online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $18 and $26 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was not minted until 1986
The South African Silver Krugerrand contains one troy ounce of .917 fine silver and has a diameter of 32.77mm or 1.295 inches. The coin's market value is based on several factors: the condition it is in, including any proof-like characteristics, its mintage number (which can be found by checking online for information), and whether it features an annual design change (as with many other popular coins).
Its current price varies between $30 and $50 depending on the factors listed above; however, recent trends suggest its price will rise as demand increases while supplies remain low because this coin was not minted until 1967, so only a small number were made initially. This can often indicate future appreciation.
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