Some people may not know that their IRAs can legally invest in almost any type of asset. That means you can invest your retirement funds in precious metals like gold, silver, platinum, and palladium. Establishing a Gold IRA is a relatively easy process.
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Let’s look at the four players involved when using your IRA to purchase precious metals: The IRS, a self-directed IRA custodian like New Direction Trust Company, a precious metals dealer, and a precious metals depository.
The IRS View on a Gold IRA
In return for the special tax status that retirement accounts receive, the IRS sets certain parameters. First, your IRA can purchase metals as a commodity but cannot purchase collectible coins.
Second, there is a purity requirement for account-owned items (note that these requirements do not apply to American Eagle coins):
- 99.5% pure for Gold
- 99.9% pure for Silver
- 99.95% pure for Platinum and Palladium
Third, your IRA cannot buy or sell your metals from a disqualified person. Disqualified persons include you, your spouse, your lineal ascendants, lineal descendants, and their spouses.
Self-Directed Gold IRA Custodian
A self-directed IRA custodian that allows assets like precious metals can help you navigate IRS requirements as well as perform recordkeeping for your account. If your retirement funds are not currently with an IRA custodian that allows precious metal investing, you will likely be able to move your funds without a tax penalty to a custodian that does allow precious metals.
Precious Metals Dealer
Self-direction of your retirement account means that you get to select a precious metals dealer with whom you are comfortable. Due diligence is your responsibility, but once you’re satisfied with your selection, you agree on the deal and direct the IRA custodian to fund your purchase.
Precious Metals Depository
The IRS restricts you from keeping your IRA-owned metals in your physical possession. They must be held in a depository but the selection of this storage site is up to you. Factors that you might consider include fees, facility location, and insurance levels.
Now that we’ve identified the four players involved and established some expectations about their roles, it is time to start putting together your new precious metals IRA. For more detailed information about a Gold IRA, please give us a call at 877-742-1270 or send us a message through the Client Portal.