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

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.

 

Stock Market’s Got You Down? Consider Alternative Assets as a Retirement Plan Pick-Me-Up

The stock market’s performance in early February likely has many savvy investors thinking about alternative (“alt”) funds as a hedge against market volatility. According to FINRA (Financial Industry Regulatory Authority) alt funds might invest in assets such as global real estate, loans, start-up companies and unlisted securities that offer exposure beyond traditional stocks, bonds and cash.

Luckily, you can replicate what alt funds are doing by establishing a self-directed IRA and investing in your choice of non-publicly traded alternatives.

There are many alternative assets that investors may include in their self-directed retirement plans as a way to diversify their retirement portfolios—and build retirement wealth with nontraditional investments they already know and understand.

These are just some of the myriad ways you can include nontraditional investments in a tax-advantaged retirement plan. And, when you open a self-directed IRA with Next Generation Trust Company, you get complimentary education, full account administration, transaction support and asset custodial services under one umbrella.

If you’re interested in perking up your portfolio with alternative assets you already know and understand, check out our Starter Kits to open an account and sign up for our monthly newsletter for timely tips. Have questions? Contact our team at Info@NextGenerationTrust.com or 1.888.857.8058