Investors must continue to find a custodian bank and a secure depository for their gold. An individual retirement account (IRA) is a type of investment account that offers tax benefits to people who use one to save for retirement. A gold IRA is a self-directed IRA that allows investors to receive tax benefits while investing in physical gold and other precious metals. You can think of a precious metal IRA as a type of self-directed IRA.
Essentially, a self-directed IRA helps people invest in a wider range of items; this includes gold and silver. For some investors, gold is an attractive asset for retirement investments. Gold provides an additional source of diversification and is (perhaps mistakenly) seen as a hedge against volatility. A gold IRA company usually has an order desk that can help you select gold (or other precious metals) that fit your investment strategy — or at least shed some light on the gold products most commonly ordered by retirement savers.
Thankfully, there is no limit to how much you can transfer from another IRA to your precious metals IRA. While there are fewer companies that offer gold IRAs than other types of IRAs, you still have multiple options. Buying a gold IRA should be part of your comprehensive financial strategy for retirement (or outside of a retirement account), which you’ve carefully formulated yourself with the help of your own financial professionals. These funds buy up a basket of gold-related investments, such as stocks in various gold mining companies.
Once you’ve opened a self-employed gold IRA, you can transfer cash to the account to fund your purchase of physical gold. Essentially, a precious metal IRA allows people to hold various precious metals, including gold bars or silver bars. The real benefit of a gold IRA is combining the benefits of precious metals yourself listed above with the additional benefits that an IRA can bring. Your gold IRA shouldn’t become your overall investment strategy. It should be part of your current strategy to achieve a more diversified and balanced portfolio for the future.
In some cases, your custodian bank will already partner with Gold IRA companies, making the process much easier. Your Gold IRA provider can help you determine which coins, bars, and other gold bars meet the requirements for storage in a Gold IRA. Additionally, you can hold ETFs in your current IRA so you don’t have to resort to a gold IRA rollover. The custodian is an IRS-approved financial institution (bank, trust company, broker), but many financial services and mutual fund companies that process regular IRAs do not use the self-directed version.
However, the IRS has introduced additional tax filing and record keeping requirements for gold IRAs due to the more complicated assets they own. Some Gold IRA providers (“Gold IRA Companies”) offer promotions that can cover some or all fees. However, you should always find out what the fees are and under what circumstances you must pay them yourself.