The Gold IRA functions just like a standard IRA. A client can commit annual contributions to buy more gold or even sell, as well as move the gold to a different custodian. The distribution options also follow the same model. One can take physical gold out of their IRA account or even sell it and take out the monetary equivalent of its value. However, the question for most prospecting investors is, should I invest in a Gold IRA? Keep reading to find out!
What is a Gold IRA?
The Gold IRA is an individual retirement account that allows a client to hold tangible assets in precious metals, including; gold, silver, platinum, and palladium. The gold account functions the same as a standard IRA account, the only difference being that a client holds physical bullion.
First, you should know there are two main types of IRA; these allow you to use the funds to invest in gold. An investor can choose between a traditional IRA and a Roth IRA. The options vary on specific details.
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Traditional IRA
A traditional IRA is an individual retirement account through which you can make contributions from your pre-tax income. This means the deposits to a traditional IRA are made before your earnings are deducted from any taxes, unlike a Roth IRA account. This allows the investment to grow tax differed. However, when you retire, tax is paid on withdrawals based on the current income tax.
Traditional IRA contribution
A traditional IRA has contribution limits of $6,000 annually and $7,000 for individuals above 50 years. Another basic rule of this IRA account is that you can only invest if you have earned income. The account is tax-free until you withdraw your funds. Early withdrawals are taxed as income but may attract a 10% penalty.
Roth IRA
A Roth IRA is also an individual retirement account; the difference with the traditional IRA is that deductions are made after your earnings income tax has been paid. This means the money deposited into this account is not tax-deductible. Hence, your investment growth tax differed. You should also note that Roth account withdrawals are not liable for tax. However, the account needs to have been active for a minimum of five years. You also need to have reached the age of 59.5 when making the withdrawals.
Roth IRA Contributions
The contributions limits to a Roth IRA are similar to the traditional IRA account. The limits are $6,000 per year if you are younger than 50 years and $7,000 if you are past that age. With this account, there is a requirement for eligibility. If you are servicing the account alone, you must have made a Modified Adjusted Gross Income (MAGI) amounting to $140,000.
For those married and choosing to fill jointly, the amount is $208,000. The account does not allow contributions in the form of bonds, stocks, or other assets. The contributions also need to be made from income earned. Though the funds contributed to your Roth IRA are not taxable, the earnings created from trading assets within the plan are eligible for taxation later.
Conclusion
A Gold IRA is one of the best options related to personal wealth preservation. This is because the value market value of gold determines global currencies. This means your wealth will be secure no matter the economic conditions present. Investing in a gold IRA is an excellent idea.
The gold IRA is among the most lucrative retirement investment plan that can assist in taking advantage of the strength of gold to develop and protect a client’s wealth. When planning for retirement, investing in gold is usually the safest means of maintaining the value of your investment over a long period. If you want to find out more about investing gold in your IRA – click here to read this article!
I hope this article was helpful and that you found it interesting. If you have any questions, we will be more than happy to answer them below.
All the best,
Pete