While gold prices keep rising, you have probably seen several ads recommending investing in gold through an IRA. You’re probably also aware that gold is considered a collectible and that IRAs do not allow you to hold collectibles. Well both perspectives are correct. Gold is a collectible, but there are ways you can legally own gold through an IRA. If you have been wondering can I invest gold in my IRA? The answer is yes. Keep reading to find out how!
Gold IRA Investment
Not all gold investments are applicable in an IRA, whether the investment is in bullion or coins. Fortunately, there are exceptions to the general rule for certain forms of gold, silver, platinum, and palladium. Bullion coins that are legal tender can be held in an IRA.
You should note that the coins must have a 99.5% purity level. Some bullion coins issued by the states are acceptable, and so are the Canadian Maple Leafs. However, options like the South African Krugerrands and the British Sovereign coins don’t meet the IRA requirements.
Bullion bars and rounds of gold and silver are allowed in an IRA if they are 99.9% pure. This generally means a national government-approved mint must produce them. Most IRA custodians only allow investments in publicly-traded securities, such as stocks, bonds, mutual funds, and options and futures.
Self-Directed IRA
To own gold in an IRA, you need a self-directed IRA offered by various custodians. A custodian is relevant because the IRS regulations require that the coins or bullion be in the custodian’s possession. You cannot use IRA funds to buy gold while storing them at your home. This is why you need an IRS-approved custodian.
You should note that your coins or bullion can’t be transferred to your IRA. This is because an IRA owner isn’t allowed to purchase or sell gold with the IRA.
Selecting an IRA custodian
When selecting an IRA custodian, you need to do so carefully. It would help if you considered how long they’ve been in business, the fees they charge, and the process involved in purchasing coins or bullion for your IRA.
It would be best if you also were keen to know the storage and insurance fees that will be charged and the fees for any other transactions or services.
As an investor, it’s your responsibility to ensure coins or bullion purchased for the IRA comply with the IRS’s requirements.
What Company is Recommended in 2022?
If you want to protect and secure your retirement savings in 2022 GOLD is the way to go. Did you know the US dollar, has been losing its purchasing power by 98% since 1971, while gold remains stable. Well, there are a lot of companies out there that offer great services when it comes to gold.
At the end of the day, YOU have to be able to trust the custodian you choose. The absolute best one I can recommend is the fastest growing gold IRA provider in the US and it is the #1 alternative out there for real investors.
Gold IRA Investment Options
An investor who wants to benefit from an increase in the gold price has various options besides investing in physical gold. You can also invest in an exchange-traded fund (ETF). The ETF provides an advantage in that it can buy, store, and insure gold at a much lower price than you or an IRA custodian can.
Holding coins or bullion is an excellent way to invest in gold or silver. Coins or bullion are a safe way to hedge against economic challenging times as they provide an alternative form of investment.
Factors to Consider
There are several factors to consider when investing in gold through an IRA. First, there are two IRA options; the traditional IRA and the Roth IRA. However, most gold investments are offered by traditional IRAs. This option also provides better returns after taxes than what Roth IRAs offer.
The second thing to note is that; when you cash out your investment from a gold IRA, you will pay taxes on your gains shortly afterward. You should also know that gold IRAs face additional fees and taxes. This includes paying a 10% fee if you withdraw early.
Tax Rules
You won’t have to pay the 28% collectible tax rate for IRA investments in gold. You will be subjected to the marginal tax rate. This rule also means you’ll pay over 28% in taxes if you fall in a high-income tax bracket. This means your income bracket determines how much you’ll pay in taxes. However, if you take losses on your investments, you can write them off because they aren’t allowed to be deducted.
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