Precious Metal IRA

An individual retirement account is a common vehicle that people use to set aside money for their eventual retirement. A precious metal IRA provides a safeguard against inflation or other financial risk, allowing individuals to store their money in the form of bullion or other acceptable gold forms. While early withdrawals are often subject to strict penalties, these accounts give investors the opportunity to defer or avoid taxation on income and capital gains.

IRAs are not linked to a specific employer and can be transferred at any time unlike 401(k) plans, which can only be rolled over when one leaves their employment. This means you can liquidate securities in an existing retirement account and fund a precious metal IRA. Starting a precious metal IRA usually starts with contacting a trusted custodian or trust company experienced in making this kind of investment. Once an account is opened, the physical gold is shipped to the vault of the trust company where it is held for the life of the IRA. In order to be considered as an IRA, the gold must be held by a third party. There will be custodial and storage fees charged to the account for holding the gold.

You can also transfer the funds in a 401(k) plan when it is eligible for rollover and use them to open a precious metal IRA. When the funds in a precious metal IRA are distributed, most custodians will either ship the physical bullion or send a check for the equivalent value to the recipient, which is treated as taxable income for that fiscal year. If the funds are withdrawn prior to age 59 ½, a penalty of 10% will apply.

In 1997, the laws governing the type and weight of gold allowed in a precious metal IRA were changed. Before 1997, the only eligible gold allowed in a precious metal IRA were Gold Eagle coins. These coins of 1 oz. or less are produced by the U.S. government. After the law was changed, bars in larger weights with a recognized assay mark were permitted. This was especially helpful for investment in silver, which is also allowed to be held in a precious metal IRA, but holds measurably less value per ounce. The change in the law also permitted the investment in popular foreign bullion such as those minted by the governments of Canada and Australia. To be included in a precious metal IRA, bullion must be 99.5 percent pure. 22 karat Gold Krugerrands from South Africa and other U.S. gold coins still do not qualify. The addition of platinum, palladium and other platinum group metals to the list of approved bullion is another key change in the law of 1997. Private assayers also offer investment-grade bullion in gold, silver and platinum, though some trustees will limit their precious metal IRA accounts to legal tender coinage. United Gold Direct can help answer your questions about a precious metal IRA.