Gold and precious metals have long been viewed as a great way to diversify your IRA portfolio, and gold in particular has recently garnered the attention of many investors. Today, with the stock market and economy on a seemingly endless roller coaster ride, there is a growing interest in investing in gold and precious metals in a self directed IRA. Investors with traditional portfolios often ask the following questions.
Are gold and precious metals allowed within an IRA?
Yes, although IRC 408 prohibits certain metals as IRA investments, other precious metal investments can be held provided that (1) the precious metal meets the established guidelines and (2) your IRA custodian allows gold and precious metals to be held within an IRA.
Why consider investing in precious metals in a self directed IRA?
Experts believe that gold and other precious metals are wise investments because, historically, they have been one of the few ways to hedge or protect assets from high inflation, stock market volatility and economic uncertainty. Gold in particular is often referred to as the crisis commodity because it tends to appreciate in value in response to negative economic, monetary, or political conditions.
How do I invest in gold and precious metals within a self directed IRA?
The first steps would be to establish and fund an account with a self directed IRA custodian. You would need to fund the IRA account by a direct transfer, or rollover from another IRA, 401(k) or other retirement account. You may also be eligible to fund the account with an annual IRA contribution.
Once the account is funded you can select the metals you would like to invest in and send instruction to purchase them to your IRA custodian. Your custodian will send payment from your self directed IRA along with shipping instructions to the precious metals dealer.
What precious metals can I invest in with my IRA?
The law surrounding precious metals in IRAs specifically mentions two coins: American Gold Eagles and Silver Eagles. These were originally the only metals that IRAs could hold, but in 1997 gold bullion, silver bullion, platinum and palladium became approved IRA investments.
Gold bars must be 24K and be COMEX or NYMEX approved, and gold coins must have a minimum purity of 99.5% and be legal tender. Allowable gold coins include the Canadian Maple Leaf, Austrian Philharmonic, and Australian Lunar or Kangaroo Nugget series and more.
Silver must be 99.9% pure and be COMEX or NYMEX approved, and silver coins must be legal tender. Silver coins that qualify as allowable IRA investments include Silver Eagles and Silver Maple Leafs.
Platinum and palladium must be 99.5% pure and NYMEX or COMEX to qualify as an IRA investment; and platinum coins must be legal tender. Platinum American Eagles, Australian Koalas, Canadian Maple Leafs, and Isle of Man Nobles are a few examples of allowable platinum coins.
Can I purchase precious metals I already own?
You would not be able to purchase metals you personally own with IRA funds, this would be considered a prohibited transaction by the IRS. As with any IRA asset, for gold and precious metals to be held as an IRA investment, they should be purchased directly by your IRA custodian.
Where are the precious metals stored when purchased by my IRA?
Precious metals held by your IRA should be stored with an approved depository, such as Delaware Depository Service Company. Delaware Depository is approved by the Commodity Futures Trading Commission as a licensed depository of the New York Mercantile Exchange (NYMEX) for platinum and palladium storage, and the New York Commodity Exchange (the COMEX Division of NYMEX) for silver storage. Delaware Depository Service Company also provides segregated storage accounts, where metals are stored separately for each investor.
Can I receive the precious metals when I start taking distributions from my IRA?
Yes, if you decide not to convert the precious metals your IRA holds to cash when taking distributions, you may take possession of the bullion or coins.
To learn more about investing in gold and precious metals in an IRA with Self Directed IRA Services, Inc:
- Visit our website: www.SDIRAServices.com.
- Call us at 866.928.9394.
