The curiosity surrounding the “precious metals IRA” continues to rise. More investors are beginning to incorporate physical assets into their retirement portfolios. Below are common inquiries for those considering precious metals among their alternative investment options.
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What is a “gold IRA” or “precious metals IRA”?
“Gold IRA” and “precious metals IRA” are simply descriptions of self-directed retirement plans that hold physical gold, silver, platinum, and/or palladium. From a tax advantage standpoint, the IRS does not distinguish precious metals IRAs from accounts that hold other asset types.
How does it work?
New Direction Trust Company allows you to invest in physical precious metals with your self-directed plan. You may purchase, sell, or exchange coins or bullion using your tax-advantaged retirement dollars. Precious metals investing provides the flexibility to conduct transactions at the leisure of the client, so you can adjust an account composed of physical assets anytime.
The first step would be to open an IRA, 401(k), or HSA and fund it via transfer, rollover, and/or contribution. You may then contact the precious metals dealer of your choice and determine the terms of your transaction. Once you reach an agreement and complete the paperwork, we’ll issue a wire from your account to fulfill the transaction. Your dealer will then arrange shipment of the items to a storage account established on behalf of your plan.
Which precious metals are allowed in IRAs?
Self-directed IRAs can hold gold, silver, platinum, and palladium. Common items like American Eagle coins, Canadian Maple Leaf coins, and bullion bars in gram or ounce denominations are permissible in retirement plans provided they meet minimum purity requirements:
- Gold: 99.5%
- Silver: 99.9%
- Platinum: 99.95%
- Palladium: 99.95%
Gold American Eagle coins do not meet the 99.5% minimum for IRA gold. However, the Internal Revenue Code allows them in retirement plans thanks to a special exception.
If I want to take a distribution, can I withdraw my precious metals in kind or will I have to liquidate?
You may liquidate precious metals on behalf of your IRA if you want to distribute cash. However, you’re under no obligation to do so if you’d rather distribute the items themselves. You may distribute your precious metals in kind, at which point they would become your personal property. The fair market (“spot”) values of your withdrawn assets would count as income for tax purposes, so you wouldn’t have to worry about added IRS scrutiny directed toward an in-kind distribution.
Can I personally hold precious metals that my IRA owns?
A third-party depository must hold any precious metals owned by your retirement plan. This is true for items owned directly by your account and for items owned by an account-owned LLC or other such entity (a Checkbook IRA). We offer a broad range of domestic and international options and collaborate with these facilities to keep storage fees as competitive as possible.