How to Add Gold To Your IRA
How to Add Gold To Your IRA
add gold to your Individual Retirement account
With the economy still attempting a half hearted recovery from what is perhaps the worst fall since the depression if not greater than the depression, gold and silver have been on a pace of growth not seen since the days of the conquistadors. Everywhere one looks its easy to find gold commercials on television and rightfully so. But if the prospect of owning physical gold in your home is one that you prefer to avoid consider adding gold and silver to your IRA.
Adding Gold and Silver to your IRA is simple.
Thanks to President Clinton’s 1997 Taxpayer Relief Act, US citizens can now enjoy the benefits of owning gold and silver in their retirement accounts. The Act specifically states:
Starting in 1998, IRA account holders can invest in metals such as gold, silver, platinum and palladium. Previously, such IRA investments were banned.
The law also created the very popular Roth Individual Retirement Account. Limits and age restrictions were also listed in the language:
The tax law creates a new type of individual retirement account called a Roth IRA (also called IRA Plus), which allows nondeductible contributions of up to $2,000 a year. The maximum contribution allowed to a Roth IRA is phased out for individuals with Adjusted Gross Income between $95,000 and $110,000 ($150,000 and $160,000 for joint filers). Earnings within the account accumulate tax-free, and withdrawals are tax-free after five years if the money is used for retirement (that is, the distribution occurs after age 59-1/2) or for a first-time home purchase ($10,000 lifetime limit). The distribution can also be tax-free if attributable to the disability or death of the individual. No more than $2,000 per year may be contributed to the combined IRAs of an individual.
Adding Gold to your IRA is a simple as locating a precious metals broker. An individual is not allowed to place the metals into an account for their benefit, which is why a broker is needed. Various brokers have various costs associated to do your homework.
Additionally you will need to know what type of gold or silver you want to place in your account based on your desired growth outcomes. Here is a partial list of coins that are investment grade and allowed to go into your account.
Generally these IRA allowable coins fall into
two categories:
1. Coins specifically listed in the Internal
Revenue Code and minted by the US. These
include:
a. American Gold Eagles
Interestingly, these US minted coins are not
of sufficient purity to classify them as bullion.
They are only approximately 91% pure gold.
The other material in the coin off sets the
softness of the gold and makes the coin more
durable. Gold Eagles arrive in one of 4 forms:
1/10, ¼, ½ and 1 full ounce coins.
b. American Gold Buffalo coins.
First minted in 2006, they are of bullion fineness,
.9999 fine (known as four nines). Note
that the specially processed proof version of
this coin is NOT acceptable, due to the treatment
raising the value of the coin beyond the
value of the metal.
c. American Silver Eagles.
Silver Eagles land in only one form: 1 full ounce
coin. They are of bullion fineness, but are only
.999 (three nines) due to the addition of a
touch of copper for added durability.
d. American Platinum Eagles.
The rarest of birds, the Platinum Eagles are
minted in 4 forms: 1/10, ¼, ½ and 1 ounce
coins. These are of .9995 fineness.
Any of the above coins which have been graded
for condition by certification organizations
and placed in tamper-proof plastic containers
called “slabs”, will generally fall into the collectible
category and thus are not allowed for IRAs.
If you’re not sure about this, ask your custodian
or metals dealer. All US minted coins have
nominal face values, but the true value is based
on the value of the metal in the coin.
Taking possession of your IRA gold is qualified as a distribution. Under that circumstance, the IRS requires that a possible penalty and the appropriate taxes be paid. To avoid the penalty and taxes you want to have your IRA gold stored at a depository through the gold IRA custodian we provide.
Investors that want to take advantage of a gold IRA use an already designated specialized precious metals depository for the storage of gold. The depository offers a secure safekeeping service and provides easy access for the physical delivery of your gold.
The last step is to find a reputable Custodian. There are several companies out there, I would recommend that you avoid Sterling Trust, as they are very expensive.
Gold IRA’s have tauted great returns since their inception. Consider diversifying a portion of your retirement account into gold and silver.
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Great post. I really like the chart with some coins that are eligible to be in an IRA.