Investing in gold and other precious metals like palladium, platinum, and silver, have long drawn interest in financial planning circles. Gold’s appeal includes its durable and tangible nature. Even in uncertain times, this precious metal can hold or increase its value during periods of political upheaval, inflation, and even struggling stock markets.
The IRS allows individual retirement accounts, or IRAs, to invest in gold, making it one of the few commodities with that capability. The Gold IRA Guide noted in a recent survey that 10.8 percent of Americans owned gold.
You might be asking yourself, what is a gold IRA? If that’s the case, here’s what you need to know about gold IRAs before you plan for retirement.
Understanding Gold IRA
Individual retirement accounts (IRAs) remain among the top options for those who want to plan for retirement. Several different types of accounts stand out in future planning, including precious metal IRAs. Some IRAs allow for tax-free withdrawals once you hit retirement.
A gold IRA is a unique financial planning tool. This investment earmarks the holding coins or bars of gold and other precious metals instead of standard assets such as stocks and bonds. A gold IRA can contain gold ETFs that track the indexes, gold mutual funds that invest in physical bullion or stocks, or gold stocks, which tend to be shares of mining companies.
A gold IRA operates similarly to a regular retirement account in certain ways. These IRAs feature the same contribution limits and distribution rules as more traditional options.
Investing in a Gold IRA
If you’re interested in a gold IRA as part of your future planning, you’ll need to set up a self-directed IRA (SDIRA) first. This type of retirement account allows an investor access to assets, like precious metals, that are off-limits to regular IRAs. You manage this account directly, with a custodian.
In addition to the SDIRA, you will need a precious metals dealer to make the actual gold purchases for your account. The custodian of your IRA can often recommend a metal dealer. Once you fund the account with a contribution, you’re ready to go.
To invest in a gold IRA, the precious metal needs to meet a minimum fitness requirement. The baseline for gold purity is 99.5 percent. That standard eliminates several valuable collectible or rare coins.
There are several coins known to hit the 99.5 percent purity marker, though. Among them, the American Gold Buffalo coin, and the American Eagle coins (both proof and non-proof). Certain bars and rounds meet the minimum fineness requirements as well.
Sites like RareMetalBlog provide quality content for you to learn more about investing in precious metals like gold, silver, and more.
Money Solutions and More
A gold IRA remains one of the most sought-after options on the market. Gold, palladium, platinum, and silver stand among the top choices for precious metals IRAs. Future planning for these investments can set you and your family up with a considerable nest egg.
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