Gold IRA investments are an effective way of beefing up retirement accounts. According to the Tax Payer Relief Act (1997), Americans can invest in gold or other precious metals through the IRAs. Gold IRAs have proved quite beneficial because commonplace IRAs usually invested in bonds & shares have suffered unexpected losses over the last few years due to economic upheaval. A Gold IRA resembles any other main course IRA in that it is structured. It will have the same norms for contribution, for withdrawal and the same tax benefits as in the case of any commonplace IRA.
Gold IRAs however differ from a commonplace IRA in that they allow one to invest in gold or other precious metals like silver, palladium and platinum apart from allowing investment in bonds, shares or other like-paper assets. Also Gold IRAs are self-directed in nature, i.e. a trustee does not hold or control the Gold IRA investment. The investor himself or herself decides where the funds would be invested and the responsibility of holding the investor’s assets goes to a custodian.
Gold IRA: The Usage of Gold in IRA
Investing in gold is a stable sort of investment and therefore gold investments work to an investor’s advantage when he or she is using gold for long-term investments. Gold has multiple uses and is an essential requirement for many industries. Gold investments differ from the other types of investments with regard to demand-price relation. As the demand for gold rises, the price of gold too rises. January 1998 was the first time when physical gold started being added to an IRA account. Gold assets come in a number of varieties but the Internal Revenue Service or IRS accepts only two gold varieties for IRA, i.e. gold coins and gold bullions. Again all gold coins are not acceptable for IRAs. The coins have to be a legal tender and should have fineness around 0.9999 % in order to be accepted for gold IRAs. Among the coins accepted for Gold IRA, we have the following ones:
- Australian Nugget
- Canadian Maple Leaf
- American Buffalo
- American Eagle
When the Gold IRA account holder reaches an age of mid 59, he or she can sell out a portion of his or her gold asset or even the entire asset. But if the investor does that before he/she reaches mid 59, a 10% penalty fee will be charged.
Gold IRA: Things to consider
While investing in gold through Gold IRA, you need to consider the following things:
- For making money out of gold assets in the IRA, you need to sell them a price higher than the price you paid for purchasing those assets
- A custodian like a brokerage firm or bank is to hold your Gold IRA assets but not all custodians are equipped enough to deal in gold
- There are fees such as storage fee, maintenance fee or insurance fee associated with gold investments.
Gold IRA: 2 major money saving tips
Here are 2 tips for you to save money on Gold IRA:
- Opt for a well-reputed and trusted IRA firm. Make sure not to fall prey to the unscrupulous ones
- Your Gold IRA funding procedure should be speedy enough
So know you know all important facts associated with Gold IRA investment.