Still, a gold IRA can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers over other financial assets, such as paper money and stocks. Many financial experts recommend holding 5 to 10% of a portfolio in gold. In retirement, you need an investment that either generates current income or is reasonably expected to appreciate in value so that you can sell and use it for consumption in the future. You’re essentially wasting tax-deferred storage space on something that doesn’t generate income; so you’re not saved from
taxes.
As with any other traditional IRA account, the value of the account will be taxable when paid out. Unlike owning stocks, mutual funds, ETFs, etc., including gold or other precious metals as a significant portion of your IRA is usually a long-term mistake due to high costs, relative volatility, and a mixed investment balance. Examples of accepted forms include the American Eagle and Canadian Maple Leaf coins in gold and silver, the Austrian Philharmonic coin, PAMP Suisse gold bars,
and most platinum bars.
To properly set up an individual retirement account (IRA), you’ll need to find a custodian that allows you to store precious metals, such as gold, in the IRA. The advantage of gold ETFs is that you can buy and sell stocks just like stocks and hold them in a conventional IRA or 401 (k). No special account is required. Additionally, the IRS has guidelines on what type of gold can be purchased for an IRA and how it should be stored. While the majority of IRAs invest in more traditional assets such as stocks, bonds, and cash equivalents, tax legislation also allows “self-directed vehicles” that can be used to hold precious metals such as silver or gold
.
Proponents of gold IRAs argue that these costs are worth the peace of mind protecting yourself from a potential financial apocalypse. So protect your money by investing it in tangible assets that can survive a crisis, or, as Devane puts it, “in an IRA backed by gold and silver, not by paper and promises. While regular IRAs are limited to securities such as stocks and bonds, the IRS allows alternative investments in self-directed IRAs. Many online Gold IRA providers have streamlined their systems and are working closely with established custodial managers to take the guesswork out of making
these decisions.
For anyone worried about financial security in retirement, these ads touting gold and silver IRAs on conservative-leaning cable TV channels and digital news outlets can sound pretty compelling. To help customers avoid this threat, some IRA companies, for example, buy back their gold at the then-current wholesale price. These companies go through an audit process to ensure that the gold they receive is the gold you ordered. However, since the Great Recession, there has been a wave of ads encouraging retirement savers to convert their savings into precious metals as part of an individual retirement account or a gold IRA
.
