Article courtesy of Heartland Precious Metals.
Note: this article is for information only and is condensed for brevity. Please visit the Heartland Precious Metals website for further details.
Individual Retirement Accounts (IRAs), which provide savings for retirement while reducing taxes, are traditionally stock-market investments. They’re directed by brokers who earn trade fees and brokerage charges.
Do you know you can also invest in a precious metals IRA?
While you should always consult with a professional financial advisor to determine which IRA meets your needs, a precious metals IRA stands apart because it doesn’t require broker management. You control your investment. You determine how much you want to invest, which metals you want to invest in, and where you’ll store your investment.
Four Keys to Retirement Planning
1. Start Early – Finish Strong
Saving for retirement is a marathon, not a sprint. It stands to reason that the earlier you start saving, the more you’ll have when you need it. Starting earlier, with even the smallest investment, will help you in the long run.
While you should always consult with your own financial advisor, many recommend that 5% to 10% of your retirement be invested in precious metals. To achieve this allocation, they advise their clients to buy stocks or exchange-traded funds. By investing directly in precious metals, your wealth is held securely in a tangible physical product – not a stock certificate.
Diversify your IRA holdings with different metal types. The marketplace determines the value of gold, silver, platinum and palladium. One may soar while another may drop. Diversification helps you attain the best return on investment.
4. Maximize Tax Advantages
Talk to your financial adviser or tax professional about IRS rules for IRA holdings, protecting your assets and achieving the best long-term rewards.
Common IRA FAQs
1. Why would I invest in a self-directed precious metals IRA instead of an ETF (exchange-traded fund) or a GLD (gold shares)?
This is a tricky question. Most financial advisors will tell you to invest in mining stocks or an ETF as a way to invest in precious metals. Of course, they’ll incur stockbroker commissions on that stock purchase.
Physical precious metals are a tangible asset whether personally holding metals or in a secure IRA depository. Keep in mind that over the entire history of humanity, precious metals have never been valued at zero, unlike stocks or mutual funds.
Here’s best advice: talk with your financial advisor. But remember, they do have a vested interest in specific types of investments.
2. I want to have the precious metals in my personal possession – is this possible?
Yes and no. If you want precious metals in your IRA account, the answer is no. You cannot personally hold those metals; they must be held at a secure depository and audited by your IRA Custodian. We are required to deliver your precious metals directly to the Depository designated by the IRA Custodian.
If you are planning on using previously saved retirement funds from an existing IRA or account, there may additional tax liabilities and penalties – we recommend you speak with your financial advisor AND your tax advisor first, to avoid any confusion.
3. Can I close my IRA Account and take physical delivery of my precious metals?
You can request that your IRA Custodian liquidate part or all of your precious metals holdings or close your account and send you the precious metals to hold personally. However, there are tax implications that you should definitely speak about with your tax advisor first. Getting the correct answer upfront is far better than learning of a mistake last minute – especially with taxes.
4. How are my metals protected and insured at the Depository?
Each precious metals Depository is a secure facility, where every coin or bar is cataloged, insured and allocated to your account. During delivery, your order will be insured and tracking numbers will be available, so you can rest assured that your products are delivered where they should be – when they should be delivered. Your Depository can provide additional information on how your precious metals are protected while in their possession.
5. How do I actually know my metals are at the Depository?
Every Depository provides complete accounting and reporting, to give you complete confidence that your metals are safe and sound, right where they belong and ready for you to liquidate should you need to do so. Each customer’s allocation are fully segregated, so your metal is not commingled with any other customer’s holdings.
6. I already have an IRA, can I roll over part or all of it to a precious metals IRA?
Yes, once you select an IRA Custodian and open your account, you will be able to rollover or transfer your IRA funds to this account.
7. What is the timeframe for an IRA/ 401K Rollover?
Because each company has their own rules in addition to IRS mandates, this can vary. However, some IRA custodians can accomplish a new account in just a few days and have funding rolled over from your old accounts in just a few weeks.
8. How long do I have to deposit funds from my 401K?
If you are rolling over a 401K, generally those funds will be directly released to you. In order to avoid any penalties, you will want to deposit those funds in your new IRA Custodian account within 60 days. Your tax advisor can provide additional details, so you should speak with them before you close your 401K account, so you know exactly what you need to do.
Yes, and to obtain details on this, we recommend you speak with your financial planner or tax professional. Generally, you can have more than one IRA account, but the total maximum contribution remains fixed, no matter how many IRAs you may have open.