Most investors stick with ordinary types of investments in their retirement accounts, such as stocks, bonds, mutual funds, and ETFs.
But if you want to ratchet your savings potential up a notch, a self-directed IRA may be for you.
Self-directed IRA’s unlock a whole universe of exciting investments that you can hold under a tax-advantaged umbrella. These include hard assets like real estate, business ventures, and yes – even physical precious metals.
Spot prices are so low nowadays that it may interest you into holding bullion in your IRA. But you wouldn’t know where to start. If so, you probably have some (or many!) questions.
We’re here to lend a hand. Let’s start by answering 5 of the most frequently asked questions our customers ask us about self-directed precious metals IRA’s.
1) What is a Self-Directed IRA?
A self-directed IRA (SDIRA) is not that different from a Traditional or Roth IRA. What makes a self-directed IRA unique is that:
- You make all of your own investment decisions (hence the name “self-directed”).
- You have the freedom to choose from a wide range of investment options outside of traditional stocks, bonds, and mutual funds.
- A self-directed IRA allows you to “self-direct” IRA money into nontraditional investments like real estate, commodities, physical precious metals, and a host of other options.
So if you want total control over every aspect of your IRA, and you’d like to leverage your knowledge of business, real estate, or other nontraditional investments (like precious metals) for the potential to earn a higher return, then a self-directed IRA may be for you.
2) What is the Benefit of Owning Precious Metals in an IRA?
Precious metals prices generally move in the opposite direction of paper assets.
So balancing out a retirement portfolio with gold, silver, platinum, or palladium can smooth out risk. It can also provide insurance against inflation or economic turmoil.
Plus, self-directed IRA’s allow you to own physical bullion. With traditional IRA’s you are limited to merely precious metals mutual funds or ETF’s.
3) How Do I Open a Self-Directed IRA and Buy Precious Metals?
To open a self-directed IRA, you need to find a custodian that handles these types of accounts.
But there’s a catch: Although there are several companies licensed by the IRS to service self-directed IRAs, you likely won’t find your well-known bank or brokerage firm among them.
Luckily, we’ve done the homework for you! View our List of Top 10 Gold IRA Companies and choose to work with the best.
4) What Kinds of Precious Metals Can I Buy in My IRA?
Precious metal coins or bars must meet specific IRS fineness standards to qualify for purchase in an IRA. (View Page: IRA-Approved Precious Metals)
The minimum fineness for Gold is .995, Silver is .999, and Platinum or Palladium is .9995.
5) How is the Bullion and Coins Stored?
The Internal Revenue Service states that you can own your own bullion in an IRA, but you can’t actually touch it. The moment it’s in your hands, it’s considered a distribution, which is taxable.
This is why Gold IRA companies will have depositories. These depositories will both move and store your precious metals for a fee.
Gold depositories will typically give you a choice between segregated storage and co-mingled storage.
Segregated storage is when your precious metals are stored in a separate vault from those of others in the depository.
Co-mingled storage is when your precious metals are stored in the same vault as those of other IRA-holders and are only separated by record-keeping.
It is important to choose a gold IRA custodian who gives the option of segregated storage and also gives a low flat annual fee for storage. The lowest annual fee for storage in the industry is $150.
This is one of the main reasons why we recommend Regal Assets as the #1 company in our List of Top 10 Gold IRA Companies. They have the lowest annual storage fees and will also pay for all the rest of your first year’s fees, including setup, administration and maintenance fees. They only have segregated storage.
Why Invest in Precious Metals?
When it comes to retirement, you want to make sure that your money is there for you.
Many investors purchase a gold IRA to protect their retirement portfolio with precious metals.
Clients often believe the stock market is overinflated. They also have a sentiment that a bubble in the stock market may burst soon, decreasing their portfolio value.
Inflation and the Value of Gold
Inflation is a nasty word because it erodes the purchasing power of the U.S. dollar.
It means that the consumer goods we buy regularly such as food or gasoline, exhaust more dollars annually.
In the year 1920, a 1-oz. gold coin and a $20 bill was worth the same. Each would have bought a man a custom tailored suit.
However, due to inflation, that same 1-oz. gold coin can still buy a custom tailored suit. However, the $20 bill cannot.
Many investors are waking up to the fact that over time the dollar has consistently lost purchasing power. They uderstand this is due to the government’s Quantitative Easing (QE) programs.
Think of gold as long-term protection of your purchasing power.
The National Debt and Gold Values
When you combine inflation with what’s on the horizon with Social Security and Medicare needing further bailouts, it all adds up to one thing: the national debt is expected to keep growing.
At its current level of $18 trillion, many believe the national debt has become unstable and unmanageable. This may result in panic setting into the market and create market uncertainty.
Physical assets like gold have often been viewed as independent of market cycles and a hedge against market uncertainty.
Because of the continued money printing that’s happening in this country, many believe the devaluation of the U.S. dollar and inflation could cripple retirement plans.
Regal Assets can help you learn how to safeguard your retirement for the future. After you open a gold IRA, you will be provided with an administration of veteran precious metals investors who can give you sound advice about your investment decisions.
Why Precious Metals?
While a diverse retirement portfolio is preferable, many workers are investing large portions of their retirement funds in precious metals like gold and silver.
When the economy took a nose dive several years ago, “We buy gold!” signs popped up everywhere. There were ads on TV, billboards along the highway, and jewelry stores at the local mall all wanting a piece of the stable gold trade market.
Historically, precious metals have shown a slow but steady increase in value — something that offers a “rock” of stability in uncertain financial times. But investing in precious metals can be disastrous if you’re not careful.
When to Invest in Precious Metals
Anyone can start a precious metals investment plan, but it’s especially important as you near retirement age.
To protect their savings from the volatility of the stock market, many individuals choose to rollover their 401K plans into a Gold or Silver IRA five to 10 years before they retire.
Others choose a split plan from the start, with a portion of their investments placed in precious metals.
After the stock market crash in 2008, many are leery of losing their investments just before retirement — with little to no time to recover.
How to Choose a Precious Metals Dealer
Scam artists are everywhere and the precious metals IRA industry is no different. You must choose your precious metals dealer wisely.
Here are a few points to consider when choosing a dealer:
- Physical gold or silver is what backs a Precious metals IRA.
- This means that you’ll have to store the metal in a secure location.
- Keeping your gold locked up in the family safe in the den probably isn’t the best option, so make sure you get details on your storage options before signing on with a dealer.
- Not all gold bullion or coins are equal.
- For investment purposes, you’ll need currency grade gold.
- The U.S. Mint has put certain standards in place to ensure investment gold is worth the dollars you use to purchase your gold IRA.
- Currency grade gold must have a fineness of 0.9999 percent in order to be suitable for investing.
- Anything less can’t be used for investments.
Investing in a gold IRA is right for those who want a secure investment option and are willing to forego large gains that might be possible with other investment options.
Investing in a gold/precious metals IRA won’t provide large profits in a short period, but it will provide a steady ROI over time — and it won’t wipe out your retirement in a volatile economy. It’s a good option for those who want to invest but are conservative or need a secure portfolio.
If you are ready to invest in a gold IRA, view our List of Top 10 Gold IRA Companies and see for yourself why we recommend Regal Assets as the #1 Gold IRA Company of 2019!
Do you have any questions on whether owning a precious metals IRA is right for you? Ask below!
Interesting. I never know a self-directed IRA existed. I only have 401K. Is there a self-directed 401K as well?
I don’t pick and chose investment in 401K but I have a separate investment in ETF that includes gold, silver, platinum and palladium. I do see that the change in the value of this ETF does not follow movements in general economy. I plan to hold it so that I will have more flexibility in which investment to liquidate during my retirement.
Hello Saori! Yes, you can have a self-directed gold or silver IRA by rolling over your 401k to one. An ETF can include precious metals but it is not exactly the same as owning the physical precious metals yourself, tax-free in a vault held by your IRA custodian’s depository. It’s really the best way to go. You can have a portfolio that includes a precious metals IRA. I hope this makes the options more clear for you! Thank you for dropping by!
Thanks for writing out this lovely article and I must say its a must for everyone to read and digest.this gold metal IRA is a good investment mainly for the retired people, it’s a form of a metal been stored and exchange of paper money .gold and silver money has always been lucrative .this a well written article that helps to play the future. Thanks for the insight
Hello Adamu! Yes, it is geared mainly for retired people but it is not too late for people who younger are not retired to start contributing to their retirement funds or even their portfolio and a gold IRA is a great thing to have in anyone’s investment portfolio. Thank you for the comment!
Self directed IRA has really been a name that is ringing so much of a bell nowadays online. Seems its now been used by many western people. Your article on it is very top-notch and its so hard not to give it a trial after reading your this insightful article onn it. The best investment for now is to invest in productive metals which would spring up anytime in the future.Thanks so much for this lovely and informative article on it. Thanks for the eye opener . Cheers!!
Hello Wealthfather and I am glad my article was helpful to you! Yes, investing in precious metals is the best option for those who wish to escape the snares of inflation and other financial catastrophes. Cheers!
It is interesting that investment opportunities are out there for people to read up on, but sadly they either don’t have the finance or they just do not bother. Your article here has a lot of information on how to invest in precious metals. So if someone is looking to invest they must look no further then to come to your site.
Indeed that is true! Thank you for the awesome coment, Madyibilg!
Hello David,
Your review of savings and investment is really great. I didn’t know that self-directed IRA could be profitable. Especially with inflation, it will give great protection. I think this kind of investment is safe enough. As well as information about various IRA companies is also beneficial. Thank you so much for the wonderful review.
Sincerely,
Ranao.
Hello Ranao and thank you for sharing what you have learned from my article! I hope my website can provide all the information you need for investing wisely. Thank you!
It is really nice to invest into one’s future. Gold and Silver are precious metals that can fetch huge money for a person in the nearest future to come. It is a long term investment thing. And the best time to invest is now that they can be gotten to keep. There is not nothing sweeter than having a rest of kind to enjoy your life when you have fiat currency exchange with your gold and silver. The future is green with Gold and Silver.
Hello Fortune! Yes, everything you said is true but I will also add that the currency exchange is also much easier from physical precious metals to cash when you invest your resources with the gold IRA custodian, namely Regal Assets – they can buy back your precious metals and have the funds back into your account in fiat currency within 24 hours! That’s only one of the perks that makes them the best in the industry. Thank you for the comments, Fortune!
The trust be told i never knew what an IRA was. After reading this i believe it is good for Workers to roll it over in to the Gold or Silver account, But my question i guess is can some one who is self-employed have one of these accounts?I will have to come back to this site an read more on it. but you have my interest.
Hello Tman61! Yes, it is indeed possible for a self-employed person with no retirement plan to have a gold or precious metals IRA. In fact, the minimum requirement amount for contribution with a direct fund payment is $5,000 as opposed to a retirement plan rollover that has a minimum of $10,000. I hope to see you more often then! Thank you very much for your question and comment.
Thanks for writing this article on owning a precious metals. One of the things that is keeping me out of investing in IRA is because I don’t have enough knowledge about it and how it works.i always think about having my own gold investment at hand and I don’t know it doesn’t work that way because it will be taxable by law .but I will like to ask what is the maximum investment I can invest in it
Hello Ajibola! There is a minimum requirement for precious metals IRA investing ($5,000 for direct investing, and $10,000 for a retirement plan rollover) but there is no maximum amount. There are investors in Dubai who are currently investing millions in it! Thank you again for your questions and comments they are always appreciated!
This was a very useful article and I learned a lot from it. I did not know about self-directed IRAs, but I like the concept. I have some precious metals now as part of my portfolio, but not in the IRA portion. I will consider adding some now though, based on your information.
It makes total sense to me to spread the risks as possible, and having a portion of your IRA in gold, silver, etc. is now a very good option. The national debt is rising rapidly once again with the current administration, and at some point, this is going to affect the economy (and our investments).
I also like the recommendation you have provided for who to work through to get some of these precious metals stored in a way we will have control, but not access (for IRS purposes). I looked at your list of the top 10 Gold IRA Companies and will select one from there. Thanks for this useful and informative article on investing in precious metals in our IRA.
Hello Dave, and thank you for sharing what you have learned from the article! I hope you make a wise decision and choose Regal Assets as your gold IRA custodian if you do go that path. They are the best gold IRA company in the industry by a large margin in every aspect. Thank you for dropping by!
This Web Page was a delight for me to view. You have just enough gold color, the spacing is excellent, which makes it inviting. The subject content “Self Directed IRA’s” is a gray area for a lot of people. I have been to seminar’s and also sat through a few presentations on the subject. I have always had a few more questions or was a little confused by the presentations, afterwards. Of course, the presenting Companies want me to call them to get more info. Your website gives a lot of detail and touches what appears to be everything that an investor needs to know. (Plus is is written down, 12 pages) Great stuff. Thanks
Mark Morlock
Hello Mark, thank you very much for the compliments to my website! If you ever have questions about investing in gold or opening up a Gold IRA account, feel free to ask anytime! Our website actually ranks all the best gold IRA companies (Top 10 Gold IRA Companies). Thank you for sharing your experience with self directed IRA’s! I hope our website can help you more. I wish you all the best!
Hi, I read your whole article about Self-Directed IRA. I know this for the first time and it was great to read. A self-direct individual retirement account (IRA), Provided by some financial institutions in the united states, which allows alternative investment for retirement savings. I think when employed people will be retired, the IRA will do many things in the future. I’will do it in the future when I retired. Thank you so much for sharing this.
Hello Rjpollob! If you have a current retirement account with an employer then, you can choose to rollover your retirement plan to a gold IRA as well. Thank you very much for stopping by!