If you decide to invest in a precious metals IRA, you should do so conservatively. Depending on your financial situation, most experts recommend investing no more than 5 to 10% of your retirement savings in precious metals. Consult reputable outside sources or a fee-based financial planner for investment advice if you’re not sure whether a gold IRA is right for you. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bars.
A gold IRA consists of a single asset class, and by eliminating the diversity you get with a traditional investment portfolio, you’re at higher risk and depriving you of the opportunity to earn income. A self-managed IRA offers the same tax benefits as a traditional IRA, but allows you to hold precious metals and other alternative assets in accordance with IRS regulations. You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days. For this reason, your IRA Gold custodian bank will allow you to transfer your physical metals to a secure warehouse, a so-called depot.
IRS rules for precious metals don’t allow you to store your coins and bars at home or in a safe. To achieve this twofold goal, many retirement account holders are trying to invest in alternative assets that don’t include stocks, bonds, mutual funds, ETFs, and CDs, which are the traditional investments allowed in retirement accounts. Popular gold IRA companies include Orion Metal Exchange, Birch Gold Group, Red Rock Secured, Gold Alliance, Oxford Gold Group, and Goldco. Self-managed IRA custodian banks allow investors to invest in alternative assets such as precious metals and real estate.
chosen Gold IRA company will help you get started by reaching out to your plan administrator with a request to transfer funds to your new Gold IRA. If you want easier exposure to these investments without having to open a specific type of IRA or find custodians, dealers, and depositories, consider investing in securities such as exchange traded funds (ETFs) or mutual funds that track precious metal indices or prices. All Gold IRA rollovers follow the same rules as converting to a traditional IRA or a Roth IRA. IRA rules for precious metals include some tax breaks, but that also means that there are limits to when you can access your Gold IRA assets.
The benefit of letting them handle your transfer is that the money is never legally in your hands, which removes the prospect of having to pay an upfront penalty as well as income taxes (you’ll still pay taxes, of course, but only if you accept distributions). If you need advice, you should contact a trusted advisor instead of relying on representatives from the Gold IRA company.