First and foremost let’s split open the acronym IRA and know what’s it’s all about.
What is IRA?
The acronym stands for Individual Retirement Account. This is one of the numerous ways potential retirees invest for the rainy days. The IRA is an individual retirement plan provided by financial institutions that offer tax advantage for retirement savings in the United States. But our focus here is on the precious metals kind of the IRA. In this case, physical gold or bullion coin or other precious approved metals in the same category of gold are kept in custody of a custodian which is usually a financial institution for the benefit of the owner.
This IRA account is not entirely different from the conventional one, the slight change between them is just what’s been kept in custody. So instead of financial assets, valuable and high priced metals are held in custody at a financial institution. This precious metal could be in the form of gold bars or bullion coin. Although gold is the most utilized metal for this account, the bullion coins receive more preference than the bars of gold.
Everyone wants gold, which places a higher demand on it, which in turn makes its price to be steep. Asides this astronomical price value, when you are ambling down to anywhere with even an ounce of gold, you keep looking over your shoulders and everyone staring at you unjustly makes you fret.
The bottom line is, gold is risky to navigate about and too premium to afford. Which is why bullion is often made a sweetheart. But despite these odds with the gold, it’s still the most purchased amongst the approved metals for an IRA account and most of the time; the precious metal account is referred to as gold IRA account.
How Do You Invest In Precious Metals IRA?
The first step to this is to create a precious metal IRA account with a custodian because you’re not meant to keep custody of the precious metal, a financial institution like a bank, credit union or a brokerage firm is supposed to handle that. You’ll be charged a one time fee to set up the account; this fee, however, varies amongst custodians. Also, you’ll be charged an annual fee by your custodian for keeping your metal safe and secure.
If these fees seem to irk you out, you can open a self-directed IRA account. This account gives you the flexibility of investment options and saves you some extra bucks off the custodian fees. We won’t dwell on a self-directed IRA account primarily because as earlier said our prime direction here is on the precious metal lane, the self-directed IRA account is not limited to just precious metals, investors can use any asset in their possession as investment capital, which includes gold, real estates, a ranch, a golf course et al. And these assets are no longer yours when it’s invested. Oh, you should even know that.
It is highly recommended opening this account with a financial institution where your account is already domiciled; this grants you some discounts on the custody fees. It’s pretty easy to set up one, and you won’t burst an artery getting it. After the account is set, you walk into a bullion shop or find a gold merchant and purchase one. That’ll serve as the capital. So the trustee or custodian takes custody of your precious metal. The storage facilities of these custodians are well-equipped with state-of-art security gadgets and are placed on 24-hour surveillance making it as secure as possible. Your custodian can still help you get the metals, all you need do is to ask.
While choosing a custodian or trustee, it is pertinent to carry out a mini survey on the reputation of that trustee, so you’re sure your investment is safe. However, some folks still prefer keeping custody of the gold or bullion coin themselves, although it’s hazardous it’s a matter of choice anyway.
Not all precious metals are accepted in IRA.
There are certain approved metals or forms of bullion for an IRA account so not every fine precious metal can be used. The following metals are legally and financially acceptable for a precious metal IRA account
- Gold American Gold Eagle Bullion Coins
- American Gold Eagle Proof Coins
- British Gold Britannia coins (from 2013)
- British The Queen’s Beasts (Coin)
- British Gold Shēngxiào Lunar Series (British Coin)
- Canadian Gold Maple Leaf Coins
- Austrian Gold Philharmonic Coins
- Silver American Silver Eagle Bullion Coins
- American Silver Eagle Proof Coins
- British Silver Britannia Coins (from 2013)
- British The Queen’s Beasts (Coin)
- British silver Shēngxiào Lunar Series (British coin)
- Canadian Silver Maple Leaf Coins
- Austrian Silver Philharmonic Coins
- Australian Silver Kookaburra Coins
- Chinese Silver Panda Coins
- Platinum American Platinum Eagle Coins
- American Platinum Eagle Proof Coins
- British The Queen’s Beasts (Coin)
- Canadian Platinum Maple Leaf Coins
- Palladium American Palladium Eagle Bullion Coins
- Canadian Palladium Maple Leaf Coins
Why You Should Invest In IRA
Retirement can be sweet and sour depending on how wise you invest. But it should be noted that the precious metal IRA shouldn’t be your only retirement investment plan, remember it’s not so cool to lay all your eggs in one basket, so this should be one of your investment plans for retirement, not the sole one.
But the IRA can turn out to be the most profitable of all. The logic is simple. First, you can always liquidate the precious metal IRA into cash and revel in the excitement even when the economy is unstable as water.
Secondly, the precious metal IRA is void of taxes, unlike the rest. So you are afforded the opportunity of enjoying an investment plan that is not ladened with enormous taxation that might cause your purse to look pinched.
Finally, it serves as a hedge against inflation which is why many investors are towing this part in their retirement plans. It provides a secured investment plan that would see you smiling in the future while others are wailing at the feet of inflation.
You Know Why?
Gold has over the course of more than six decades maintained a price or value stability and reputation, even when other commodities fluctuate like alternating current. Investing in gold that never depreciates rather skyrockets, is a reasonably rational enough to include it in your investment plans.
So you don’t fret about recession or inflation that characterize investments in stocks or other assets because your gold is unperturbed by any economic tsunami. The value rises exponentially across the years, and if there’s any reason to decline, it should be around a 2% drop in profit which rarely occurs.
Although precious metals these days could cost an arm and a leg, like the gold currently going for about $1,300 per ounce, it’s quite apparent those who live on a budget will find this plan discouraging, and leave it to the financially endowed lot to invest in while they bemoan, but there’s always a flip brighter side to peep at. It’s the long-term benefits, the long run gains.
Your retirement portfolio is resident on a strong fortress that is unwavering by inconsistent economic tides.
So when you think of investment plans that could stand the test of time, think of precious metals and don’t allow the cost deter you.
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