When it comes to a Precious Metals IRA, you cannot just invest into any type of coin or collectible. The Internal Revenue Service has laid out some strict rules when it comes to what type of metals is permitted. In fact, many popular bullion coins and bars are not eligible to be IRA approved precious metals simply because they do not meet the purity requirements of the IRS. The purity grade needs to be 0.995 or higher for gold, 0.999 or higher for silver, 0.9995 or higher for platinum and 0.9995 or higher for palladium.
What is an IRA Approved Precious Metals Account?
An IRA is an individual retirement account. There are different types of IRA accounts available to people based on their goals and objectives. Some people may invest in an IRA account on a tax-deferred basis while others may invest in a Roth IRA on an after-tax basis. What type of IRA one should use depends on their specific circumstances and goals. This is an issue that is best discussed with one’s CPA or tax advisor.
In addition to the IRA type, there are also differences in what types of investments the IRA can hold. When the majority of people think of an IRA account, they likely think of an account that simply holds stocks, mutual funds, bonds and the like. It seems that many people out there are not aware of what they can do with a self-directed IRA. A self-directed IRA gives an investor the freedom to decide what to invest in. This is in contrast to most standard IRA accounts in which the investment types are limited. Many people, for example, are not aware that a self-directed IRA account gives them the ability to invest in alternative asset classes such as precious metals, futures, limited partnerships, commercial paper or real-estate.
How is a Precious Metals IRA Setup?
Setting up a precious metals IRA is a relatively simple process but there are some necessary steps involved. Here we will outline some of the necessary steps as a guide.
Are You Setting up a New IRA Account or Transferring an Existing IRA or Other Retirement Account?
This is one of the first issues to take into account. An investor may look to start a new IRA account if he or she does not have one already. An investor may also decide to “rollover” an existing IRA account, 401k or other retirement account. Obviously, an investor will need to discuss these matters with their CPA or tax adviser. Certain types of accounts can be rolled over while other types cannot. An investor must determine his or her eligibility prior to considering a rollover.
Choose the IRA Account Custodian
- Self-directed IRA accounts are held by what is called an IRA custodian or trust company. These companies act as a fiduciary on behalf of the account. Some of their responsibilities include account setup, producing account statements and accepting allowed contributions. There are many different IRA custodians to choose from, and one can easily compare these companies from the comfort of their own home or office. Different companies charge differing amounts for their services and may have different fee structures. Fees are certainly one thing that a potential investor should consider when looking to establish a self-directed IRA account with a custodian. Often times, precious metals dealers will have custodians that they do business with or recommend. One can, however, use the custodian of their choice when setting up a self-directed IRA account.
Choose a Precious Metals Dealer
- When one establishes a self-directed IRA account, he or she can still buy precious metals from the dealer of their choice. Investors can shop bullion dealers to compare prices and products.
Decide What Bullion Products to Buy
- There are only certain bullion products that are eligible to be held in an IRA account. Some of these products include gold and silver American Eagles (including proof sets), Philharmonics and Canadian Maple Leafs. In addition, one can buy gold Australian Kangaroos, gold American Buffaloes, silver Australian Kookaburras and Mexican Libertad coins. In addition, various gold rounds and bars of .995 percent minimum fineness may be eligible as well as various silver rounds and bars of .999 minimum fineness. Finally, certain platinum and palladium products are also eligible. One can choose any of the IRA eligible products they like.
Decide on a Depository
- Precious metals held in an IRA account cannot be delivered to the account holder. The metals must be stored in an approved depository, such as the Delaware depository. IRA custodians may recommend an approved depository, but investors do have the ability to choose where their metals are stored from approved depositories.
Make the Purchase
- When all of the preciously mentioned pieces are in place, then an investor should make the actual precious metals purchase. The IRA custodian will handle the payment and the dealer will ship the metals to the chosen depository. Once an investor’s account is established and their metals have been purchased, the custodian will provide them with periodic account statements detailing their holdings and the bid or wholesale value of those holdings.
- A precious metals IRA owner may liquidate his or her own entire portfolio at any time. A precious metals IRA account also gives the account holder the option of taking required minimum distributions in the form of bullion. Setting up a precious metals IRA account has never been easier. The process is streamlined and an investor can have precious metals within their self-directed IRA account in a matter of days or weeks.
How to Buy Precious Metals for Your IRA – Steps, Rules & Storage Options
Best IRA options have simplified the process of setting up a gold and silver individual retirement account (IRA) into three easy steps (Get these precious metals IRA steps in a printable image guide):
1. Select Your IRA Plan
Best IRA options offers two different options for storing your precious metals.
Option A: Local Storage Plan
- Creating a local storage plan allows the precious metals to be sent directly to the manager of the IRA, so you (the IRA manager) may choose where to store the metals.
Option B: National Storage Plan
- The second option is storing the precious metals in a national depository. Best IRA options and Coin works with the Delaware Depository Service Company (DDSC) and will help you establish your account with them. However, a national storage plan means the precious metals will be sent directly to the DDSC facility rather than being shipped to a local IRA manager.
2. Fund Your IRA
To fund your IRA you must make contributions, transfers and/or rollovers from existing Retirement Plans. A minimum investment of $5,000 is mandatory to start your individual retirement account (IRA) and invest in precious metals through Best IRA options and Coin.
Select Precious Metals
- Best IRA options and Coin will facilitate your purchase of precious metals and be your designated precious metals dealer. Our Managing Brokers will educate you on the proper investment products and provide necessary advice before choosing IRA approved precious metals.
Invest in Precious Metals
- When buying precious metals through an IRA, there are restrictions on what metals are allowed in the IRA. Gold, silver, platinum and palladium are all the options, but a minimum requirement on ﬁneness of the metal is stipulated. Best IRA options and Coin will provide imperative advice on which products are eligible for investment.
3. Purchase and Make Payment for Possession of Physical Precious Metals
To purchase the precious metals that you and your Best IRA options and Coin advisor have chosen to best meet your IRA needs, the trust company will fund the purchase one of two ways.
The Local Storage Option
- The Directed Trust Company will fund you (the IRA manager) and you will fund Best IRA options and Coin.
The National Storage Plan
- The Directed Trust Company will fund Best IRA options and Coin once an invoice has been submitted to the trust company.
- Precious Metals are now available for pick up and/or will be shipped from Best IRA options and Coin (if local storage plan was chosen), or will be shipped directly to the DDSC national storage facility (if national storage plan was chosen).
Regal Assets is the best certified firm to purchase gold IRA’s. Not only has it received the highest remarks from the most authoritative business evaluation companies such as the Better Business Bureau, TrustLink, and much more, it has never received a single complaint from any of their customer testimonials. When you sign up, you receive a PDF kit that lists the scams associated with precious metals investing and ways to avoid it. They also send out a newsletter containing valuable exclusive tips and information on precious metals investing.