Want Out of the Stock Market? Consider Precious Metals in a Self-Directed IRA

Want Out of the Stock Market? Consider Precious Metals in a Self-Directed IRA

Buckle up, investors—the stock market is taking millions of people for a very uncomfortable ride during the Covid-19 pandemic. Individuals who maintain retirement portfolios with traditional assets like stocks, bonds, and mutual funds have seen precipitous declines in their retirement accounts this month as the markets, businesses, and the world deal with the virus.

Advisors will say that diversification is always the key to a healthy portfolio—something self-directed investors know and practice. One way to hedge against the volatility of the stock market and reduce risk is to include alternative assets within a self-directed IRA. Along with real estate, precious metals are among some of the most popular nontraditional investment options that can be held in a self-directed IRA. In fact, there has been a recent spike in demand from investors who wish to diversify their retirement accounts with metals like gold, silver, platinum, and palladium. You can read the particulars of including precious metals in a self-directed IRA in this blog post.

Why include precious metals in a self-directed IRA?
Long before there was paper currency, there were gold and silver, traded around the world. Key benefits to including precious metals in a self-directed IRA is that these assets have no credit risk, serve as a hedge against market volatility, and also do so vis-à-vis political instability, currency weakness, and economic collapse. As Goldman Sachs was quoted this week, “gold is the currency of last resort.” Given the news swirling around us right now, it’s no wonder precious metals are in higher demand as a long-term investment.

In a move to stabilize the U.S. economy and ward off a credit crunch, the U.S. Federal Reserve has committed to purchasing an unlimited number of Treasuries and securities tied to residential and commercial mortgages. This process, called “quantitative easing,” is meant to enhance liquidity of financial markets. Pushing more money into the market affects gold prices inversely; as more money is available, interest rates go down and the value of gold goes up. This article on MarketWatch explains further and predicts gold will increase sharply in value in the coming weeks.

If you’re already knowledgeable about investing in precious metals or want to include this alternative asset in your retirement plan, check out our helpful Precious Metals Guide to learn more. If you have questions about self-direction and the other kinds of nontraditional investments these plans allow, register for a complimentary educational session with one of our knowledgeable representatives. Alternatively, you can call us directly at 888.857.8058 or send an email to  NewAccounts@NextGenerationTrust.com.

All That Glitters Could be Gold: Investing in Precious Metals in a Self-Directed IRA

Gold, silver and platinum figure big in holiday gift giving. But did you know that not all precious metals are destined to become jewelry? For many investors with self-directed IRAs, precious metals are part of their retirement portfolios.

You may have heard the terms “gold IRA” or “silver IRA.” They refer to the self-directed retirement plans that include these precious metals. In these cases, physical gold, silver or other approved precious metals are held in custody for the benefit of the IRA account owner. Instead of paper assets, there are physical coins or bullion bars, referred to as hard assets.

These alternative assets are easy to own and to manage for savvy investors who already know and understand the precious metals markets. And, precious metals have historically been an excellent way to diversify investment holdings and preserve capital. Gold and silver provide a hedge against inflation and precious metals’ value usually move independently of the stock market, which can make a precious metals IRA a good hedge against market volatility.

Precious metal assets allowed in self-directed IRAs
There are three categories of precious metal assets investors can include in their self-directed retirement plans:

As with other nontraditional investments that are prohibited from self-directed IRAs, rare and collectible coins are NOT acceptable precious metals for this investment purpose.

Setting up a precious metals IRA

Liquidating your assets
You can liquidate precious metals assets any time you wish and your IRA custodian can advise you on the process. Proceeds from the sale of the assets go back into your self-directed IRA as they do with any self-directed asset, so they remain tax-advantaged. You also have the option of taking required minimum distributions in the form of bullion.

Do you have questions about opening a new self-directed IRA or how to execute a transaction concerning a precious metals investment? You may schedule a complimentary educational session or contact our team about self-directed IRAs and the many types of nontraditional investments these plans allow. We’re available via phone at 1-888-857-8058 or by email at NewAccounts@NextGenerationTrust.com.

Including Precious Metals in a Self-Directed IRA for a Golden Nest Egg

Are you looking for a way to lay a golden nest egg? If you’re a self-directed investor seeking another alternative asset to diversify your retirement portfolio, you might consider precious metals. Precious metals have historically been an excellent way to diversify investment holdings and preserve capital.

Some reasons to consider including precious metals in a self-directed IRA (also known as a precious metals IRA) are that gold and silver can be good hedges against inflation (when paper currency is devalued) and precious metals are a good hedge against stock/bond/treasury bill volatility, since their values typically move independently of the stock market.

What some people don’t know is that not all types of metals can be held in a self-directed IRA. In order for precious metals to be eligible, they must meet certain requirements as outlined in IRC 408(m)(3). The metals can be owned in bullion form (e.g. bars) that meet a minimum fineness, or they can be in certain approved coin form—one, one half, one quarter, one tenth ounce U.S. gold coins, and/or one ounce silver coins minted by the Treasury Department.

These coins, bars and bullion are hard assets (as opposed to investments on paper) and they are held in an off-site depository that specializes in holding precious metals. To learn more about the types of precious metals allowed in an IRA, download our free guide here. Please keep in mind that the metals cannot be stored with the account holder.

Getting started with a precious metals IRA

If you are just getting started, you must first open a new self-directed IRA with a custodian and then fund the account in one of three ways:

  1. Transfer funds from an existing IRA
  2. Roll over funds from an employer sponsored plan (401k, pension plan, etc.)
  3. Annual contribution

For clients opening a new precious metals IRA at Next Generation, our helpful guide will walk you through all the steps on how to purchase precious metals with your IRA. As outlined in the guide, once your self-directed retirement plan is open, there are a few actions to take:

You may liquidate your precious metals holdings at any time; and with a precious metals IRA, the account holder has the option of taking required minimum distributions in the form of bullion.

If you have questions about opening a self-directed IRA and including precious metals as one of the many nontraditional investments these plans allow, email us at NewAccounts@NextGenerationTrust.com, call (888) 857-8058, or visit https://www.NextGenerationTrust.com.