April 14


Physical Gold IRA Explained

By Steven Hernandez

April 14, 2021

Physical Gold IRA Explained In Plain English


Most Americans understand that they can enjoy certain tax benefits with an individual retirement account, typically called an IRA. However, people tend to associate these retirement accounts with stocks, mutual funds, and similar investments. The IRS also allows retirement savers to save for retirement with certain physical assets, including gold or other precious metals. Take a moment to have a physical gold IRA explained in simple language to see if is a good option.

What is a Physical Gold IRA

In addition to gold, you can also include silver, platinum, or palladium within your self-directed IRA. Even though these IRAs can include more than one kind of precious metal, they are usually called gold IRAs since gold is the first precious metal people tend to think of. Silver is also a popular choice.

Typically, people buy precious metal coins minted by the U.S. Mint, another government, or a certified refinery just because they will be certain that they are getting what they are paying for and that the IRS will allow them. Note that these coins may only be valued for the gold IRA for the precious metal that they contain and not for their collectible value. Just as people can't invest in things like fine art or antiques for an IRA, they also can't invest in coins that are most valuable because of their numismatic value. Some common examples of valid bullion for an IRA include American Gold or Silver Eagles, Canadian Platinum Maple Leafs, and NYMEX or COMEX-approved palladium bars.

Gold IRA Custodians And Trustees

The IRS requires that any metal coins or bars have to be stored by an approved trustee or custodian. For instance, people aren't allowed to simply store their precious metal IRA coins in a safety deposit box or at home. First, this is very risky. Second, the IRS might decide the coins don't qualify. Some examples of common trustees and custodians might include qualified precious metal brokers, banks, or credit unions.

These custodians or trustees will charge a storage fee. In return, they are responsible for accounting for all of the precious metals within an IRA and for keeping it safe. Withdrawal rules for precious metals are the same as for any other valuable assets within an IRA. Once the owner reaches retirement age, he or she is free to take delivery or sell their gold.

Some people may raise funds for their gold IRA by selling traditional IRA assets and purchasing precious metals. This kind of rollover can be done without incurring tax penalties, but it's best to have a “professional trustee or custodian to help with the process”. Of course, it's fine to just invest in precious metals a little at a time for years with the home of growing investment over time.

Why Consider A Gold IRA?

For a long time, people have considered gold, silver, or other precious metal as a good store of value and a hedge against inflation. This was particularly true when the general economy was not doing well. Some prudent investors and financial advisors will suggest keeping at least some percentage of retirement savings in physical assets, like gold or silver.

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A physical gold IRA is a type of investment that involves the use of actual gold in an account rather than using paper assets as was done traditionally. In other words, if this account is to be accessed, you would literary find bullion bars and coins stacked on each other depending on the magnitude of investment by the account holder. Physical gold is so loved due to the fact that it does not depreciate in value.

Currency is notorious for fluctuating in value under the influence of so many market forces. Some of these forces can never be controlled. This means that the future can also never be controlled. As a result, anyone who is saving a large sum of money with a custodian is always likely to feel the pinch of currency depreciation after years of saving.

The value is most often likely to have depreciated at the time a withdrawal is being made. However, if physical gold is used in an account, it means that even after years of saving, the actual value of gold held in an account by a custodian will still be the same. This is therefore probably one of the best investment options for IRA holders.

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