It's important to be prepared for the many challenges that come with retirement planning. In this time of economic uncertainty and stock market volatility, traditional portfolios may not provide enough security.
Precious metals such as gold, silver, platinum and pallidium can help you mitigate these risks.
Gold may be used to hedge against inflation. For the 20 years through June 30, 2019, gold outperformed the S&P 500, bonds, and oil, according to J.P. Morgan Asset Management.
Gold and other metals can also offer liquidity within your account, meaning they can readily be converted into cash should the need arise.
Individual Retirement Accounts (IRAs) offer tax-deferred or tax-free growth, which means that investments made using an IRA may grow to be larger than similar investments made outside an IRA.
To invest in a “gold IRA” or invest in other precious metals in an IRA, certain requirements must be met. Here are the answers to frequently asked questions about gold and other precious metals in an IRA.
Precious Metals in an IRA: What to Know
What is a Precious Metals IRA?
A Precious Metals IRA is simply a Traditional, ROTH, SEP, SIMPLE, Rollover, or Inherited IRA that owns precious metals and may include gold, silver, platinum, or palladium. IRA Holders have been allowed to use funds in their IRA account to purchase approved precious metals since 1998 after the passage of the Taxpayer Relief Act of 1997. This act expanded the investment options for IRAs beyond paper assets.
What kinds of precious metals can a Precious Metals IRA hold?
A Precious Metals IRA can own four types of precious metals: gold, silver, platinum, and palladium. IRA gold is limited to 1 ounce, ½ ounce, ¼ ounce, and 1/10 ounce Gold American Eagles (Uncirculated or Proof) or other gold products (coins or bars) with a minimum purity of .995%. To qualify for an IRA, silver must be at least .999% pure; and both platinum and palladium must be at least .9995% pure.
Is a Gold IRA the same as a gold certificate?
No. A gold certificate is simply a piece of paper that can be redeemed for physical gold. If you have a precious metals IRA, your IRA directly owns physical bullion bars or coins that you select and order directly.
Why do I need to transfer or rollover my IRA to buy gold?
Any IRA is legally allowed to purchase gold and precious metals. However, a majority of the major custodians such as Charles Schwab, Merrill Lynch, and JP Morgan Chase do not offer physical precious metals as an investment option. Most traditional custodians are structured to only hold paper assets and structured as managed funds. Physical precious metals is a self-directed investment and generally requires a custodian that offers self-directed IRA investments. If your custodian does not offer precious metals as an investment option, we can help you initiate a rollover or direct transfer to a custodian who does. A rollover or direct transfer is a non-taxable event.
Why do people diversify their portfolios with precious metals?
Providing diversification and liquidity with no credit risk, gold can be especially attractive during periods of increased market volatility. Many investors choose to diversify retirement portfolios with alternative assets that are not correlated to the stock market.
Can I buy physical gold for my IRA?
You can buy gold coins and gold bullion bars, silver, palladium, and other precious metals that meet certain fineness requirements with your IRA.
What are the requirements for metals in a retirement account?
Metals must be produced by manufacturers accredited by NYMEX/COMEX, LME, BMA, NYSE/LIFFE/
CBOT, and ISO-9000, or a national mint to be held in a retirement account.
The minimum fineness requirement for bullion is:
- Gold .995+
- Silver .999+
- Platinum .9995+
- Palladium .9995+
