What is a Gold IRA Account?
A gold IRA account is a self-directed IRA that you can add physical gold and other precious metals to. You cannot have the gold and precious metals in your home, you must store it in an approved storage facility. A gold IRA is good for those people who want something different than the average IRA account. You must also have a special custodian to keep and store the gold and precious metals with.
There are many different types of gold and other precious metals that you can invest in. You will need to open an account that allows you to have these types of investments. Not all IRAs are the same and not all will accept these types of investments.
You will need to do some research to see who can open this type of IRA for you. You want to make sure that the company knows about gold IRAs and knows the laws that surround them. You want to make sure that the company knows what they are doing and can help you out the most.
Pros and Cons of a Gold IRA
There are many good reasons to have a gold IRA, and there are many cons to having one, as well. You need to know about the pros and the cons before you decide to start a gold IRA. You do not want to be surprised when there are things that you did not know thrust upon you.
You can have gold and other precious metals that you could physically hold, not just gold futures and investments in gold mines and the like. Gold and precious metals hold their value or increase in value as other investments begin to falter. In a bad economy, gold and other precious metals are great investments because they do hold or increase their value.
You can receive some of the same tax benefits that you get with traditional IRAs. Any contribution that you make to your self-directed IRA is tax-deductible, just as in any other IRA. You can also withdraw from a Roth account and not have to pay any extra taxes.
You can also hold gold and other precious metals for a long period of time with the general perception that it will hold its value until you retire. You could hold gold for many decades and know that your investment is generally safe. You will not increase or decrease your investment as much as other investments such as stocks and bonds will. You can be assured that the gold that you bought decades ago will still have nearly the same value as it did the day that you bought it.
Gold IRAs are self-directed so that you have more control over what is bought and sold in it. You directly manage what you have, and you make all the direct decisions about your gold IRA. This allows you to be more flexible with what you have and how much of it you want or need.
There are other pros to having a gold IRA such as being able to determine which type of metal that you want in your IRA. You could choose not only gold, but silver, platinum, and palladium to name a few. You just have to make sure that the purity of the metal fits the IRS standards. It usually should be at least 90% pure to be able to use it as an investment in your gold IRA.
There are also some cons that come along with investing in a gold IRA, as there is with any other investment. If you know about these cons in advance, you can determine if this is the route that you want to take. Many people, even knowing the cons, will determine that a gold IRA is still the best way to invest for retirement.
There is no tax-advantaged income from your gold IRA like there is with other IRAs. Gold and precious metals do not pay dividends, interest, or other returns. It really does not take advantage of the tax-free part of investing in IRAs. The only break that you really get is that you will not have to pay capital gains taxes if you sell your gold or precious metals.
There are higher fees that are associated with investing in gold and other precious metals. Since you cannot hold your gold in your own home or safe deposit box at your bank, you will have to pay to have it stored in an IRS approved storage facility: https://www.usmoneyreserve.com/news/executive-insights/gold-ira-storage/. The custodial fees for a gold IRA are often more expensive than the fees of other IRAs. You will also have to pay someone to buy your gold, store your gold, and to transport your gold to an approved facility.
There are funding restrictions when it comes to your gold IRA, as well. You cannot transfer gold and other precious metals that you already own to your IRA account. You also cannot buy and sell your gold or precious metals on your own, you must have a steward that will do that for you. The cost of a steward or custodian can be expensive if you are not careful about what you are doing.
Gold IRAs are a great way to invest your money for your retirement. You just need to know all the pros and cons that go along with it and be careful to choose the right steward or custodian to hold your precious metals. There are ways that you can make money with precious metals and ways that your investments in the precious metals can stay the same. You just need to know that precious metals do not often lose their value, although it is entirely possible that it will, just as it is possible with other investments, as well.
You need to research to find the right company to help you start your gold IRA and make sure that they give you all the information that you need upfront. Have them give you all the pros and cons of having a self-directed IRA so that you know what you are getting into. You want to make sure that this is the right decision for you.