How To Invest In A Gold IRA

You have set aside money for your retirement, but one thing continues to nag at you: the value of that IRA in real terms when you finally stop working. Rumor has it that inflation and a stock market crash will cause the American dollar to become worthless, and the only things of value will be real commodities and precious metals. Whether or not the crash and devaluing of American money actually happen or not remains to be seen, but history has shown what a profitable long-term investment looks like.

What Is an IRA?

An IRA is an Independent Retirement Account; a way of putting money aside for the day when you no longer enjoy a steady wage. It is an independent measure because consumers direct IRAs themselves unlike savings organized by an employer. Consumers choose what to save: money, precious metals, shares, etc.

What about Investing in Gold?

Gold and other precious metals are common investments made by members of the public who have developed an investment portfolio. That portfolio usually includes some stocks or shares, perhaps some bonds, and also physical commodities like metals.

Gold is prized by investors as a safety hedge against inflation. Although its worth grows only slowly, this growth is generally steady and reliable over time. Consequently, many investors preparing for retirement wonder if they should convert some of their IRA savings and own a gold IRA. Silver, Titanium, and Palladium are a few other popular and useful metals, with uses in industry as well as jewelry making.

Transferring from Dollars to Precious Metals

Financial experts are generally positive about precious metals as investments, including gold. They recommend holding a diverse portfolio of which metal is only a small part designed to yield big gains at least a decade from now and no sooner.

Although you are directing your own retirement fund, a trustee must act on your behalf to store the gold for you. For tax reasons it cannot be kept on an owner’s property. This individual charges a number of fees including set-up, documentation, and more.

Transferring to Gold Shares

Another way to redirect IRA savings into the arena of precious metals is to buy shares in a mining corporation. Purchase an ETF rather than buying the actual metal, but do your research to locate a profitable company with good prospects.

Restrictions on an IRA

There are numerous restrictions to watch for when it comes to IRAs and to the use of gold as part of them. For instance, only metals in particular formats from certain countries are acceptably pure. Canada and the United States top that list because their gold reaches a high standard of purity. Investors buy coins and bullion.

Secondly, there are numerous tax rules to take into consideration, in particular when it comes to cashing in early. Review these before transferring funds or opening an IRA in the first place.

Thirdly, you must always study what is and is not acceptable as an investment towards your retirement savings. Some investments might be worthwhile, just not as part of an IRA. Note the different types of IRAs such as the traditional, the Roth IRA, and a group pension plan called an SEP. Each one is organized slightly differently. Also, there are limits to how much you can invest in your account yearly. Bring a financial adviser into the picture to give you guidance and prevent costly errors.

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About the Author: Andy