How To Start a Gold IRA in Six Easy Steps
The discussion on considering gold IRAs as a viable investment option has been gaining momentum in recent times due to the economic uncertainty we are currently living in. After all, physical gold and other precious metals have always had special meaning and value in our society.
I’ve decided to diversify my retirement portfolio by adding gold and silver to my IRA, and today I’ll share with you that experience after going through this process.
For transparency, I used Goldco for mine.
However, having decided to diversify their investment portfolios by opening a precious metals IRA, most people do not know where to begin. The process and important considerations needed when opening a self-directed IRA are not well known to most people.
If you are considering moving away from retirement accounts based on stocks, mutual funds, and a traditional or Roth IRA, then this is the right place for you to learn all you need about starting a gold IRA.
To back up a step, please read “what is a gold IRA” in case you aren’t familiar.
The top way to safeguard your retirement is to open a precious metals IRA. Check out the below providers and request a free kit.
Company | Personal Findings | Review | Free Guide | |
 | #1 Goldco | Best Overall Rating (Where I Invested) | ||
 | #2 American Hartford Gold | Best Buyback Program | ||
 | #3 Augusta Precious Metals | Most Educational ($50,000 Minimum) | ||
 | #4 Noble Gold | Best Metals Selection |
What Will I Learn?
Why Should You Invest in Precious Metals?
Starting a precious metals IRA does not necessarily mean there is something wrong with your existing retirement account. Paper assets such as mutual funds and the stock market have been tried and tested as very good investment options.
However, the following reasons are why it is a good idea to diversify your retirement portfolio by opening a gold IRA:
Hedge Against Inflation
Inflation has become one of the greatest threats to your retirement savings recently. As Fiat currencies continue to lose value, now might be a good idea to consider a more stable option, such as investing in a gold IRA.
Physical gold and other precious metals have historically been immune to things such as inflation and stock market volatility. By investing part of your IRA funds in gold IRAs, you protect yourself from the effects of the current economic uncertainty
Diversify Your Portfolio
Diversification of part of your investment portfolio into a self-directed IRA not only reduces the risk you face but also opens up a lot of opportunities when you have more than one IRA account.
If your traditional IRA takes a beating from the economy, you will still have your physical precious metals IRA to rely on. Similarly, if there are any advantages to be had in either traditional IRAs or gold IRAs, you will be a part of it.
Intrinsic Value
Gold bullion on its own has always had lots of value since the dawn of time. This value has only increased with its greater demand in technology and medicine. Therefore, this is why investors flock to precious metals IRAs in times of economic instability. Gold mining stocks and gold prices are currently performing very well while other investments are suffering. If you currently have all your retirement funds tied up in a Roth IRA or other traditional IRA, now would be a good time to rollover to a gold IRA.
What To Consider When Opening a Precious Metals IRA
By now, the advantages of a gold IRA must be quite clear. However, that does not mean you can blindly invest in gold IRAS without any due caution. Before you diversify into a self-directed IRA, consider the following:
Type of Account
Not all self-directed IRAs are the same. They can be either Roth IRAs or Traditional IRAs. The difference is based on how you intend to pay taxes and the type of tax benefits you would like. With a traditional IRA, you only pay taxes when you withdraw your funds while Roth IRAs require you to pay taxes before making any contribution to the retirement account.
Storage
One of the most important things to remember is that the IRS rules do not allow owning physical gold held in a precious metal IRA. All precious metals that are part of your gold IRA will have to be stored by banks or an approved depository, such s the Delaware depository. This is one of the drawbacks of investing in a gold IRA. Failure to follow these IRS rules will result in penalties being imposed.
Fees
Certain fees come with owning a gold IRA, such as storage fees, setup fees, and account management fees. These amounts you pay during the first year can range from $250 to $350. While this is not overly expensive, it is still a lot more than you would pay for a traditional individual retirement account.
Contribution Limits
Your age will play a big role in determining your contribution limits toward your self-directed IRA account. Anyone under 50 years can only contribute up to $6,000, while those contributions rise to $7,000 for investors over the age of 50.
Six Steps To Starting a Gold IRA
If you are ready to venture into the world of precious metal IRAs, the following steps will help:
Determine Whether a Gold IRA Is a Right Option
We have already outlined the various benefits of owning traditional gold IRA. However, you still need to look at your individual circumstances and determine whether this is the right time for you to invest in gold.
You need to consider individual retirement account goals as well as how many years you have left until retirement. This will help determine whether gold investments are a good retirement plan. You can talk to a financial advisor before you transfer money from existing retirement accounts.
Choose the Best Gold IRA Companies
To have the best chance of reaping the rewards of investing in precious metals, you need to be very careful when choosing your preferred gold IRA company. Proper research of the many gold IRA companies out there is needed to weed out the scammers before making any gold purchases.
Different companies offer a wide range of services and perks to their clients, which is something you have to consider. Some of the most popular gold IRA custodians are:
Factors to consider when picking Gold IRA companies
There are certain qualities that any good gold IRA custodian needs to possess, such as:
Reputation
You need to stay away from self-directed IRA custodians that have earned a bad reputation for themselves because in most cases that reputation is well-earned. Luckily, these days, it is very easy to do your own research before registering with a new gold IRA company.
Transparency
Not every self-directed IRA custodian is upfront regarding their fee structure and how they will handle your gold IRA account. However, a lot of the top gold IRA custodians make it a point to provide enough information and educational material to anyone wishing to open a new IRA account.
Expertise
Just like any other form of an investment portfolio, a gold IRA has its own risks. To protect you from losses, choose a custodian that has a panel of experts and financial advisors with the required knowledge regarding which is IRA-approved gold coins, tax benefits, and the internal revenue service regulations.
Fees and Minimum Investments
With diligent research, you will get a good idea of what the normal costs and fees are for a regular self-directed individual retirement account. Most custodians also have a minimum deposit before you can start investing in a gold IRA.
Contact Your IRA Account Representative
When you have settled on a particular custodian, it’s time to reach out to your portfolio managers, both from the new gold IRA company and the one handling your existing IRA custodian.
It is important to be very clear and firm about your decision and the amount of money you are transferring. Your current account manager may try to convince you to keep their money with them but you should remain steadfast.
Another thing to be clear about is whether you are conducting a rollover or a transfer. If it is a rollover, remember that you are only allowed one of these per year.
Fill in the Paperwork
Unfortunately, there is no way to escape the huge amount of paperwork you will have to put up with. Maybe it will improve with time as things become more digital-based, but for now, investing in gold is still a painstaking process.
To make the process easier, always make sure you come prepared with all the required information and documents. Do adequate research beforehand on which particular stocks you are interested in so that when it comes to filling out the forms you will be able to do so without delay.
Fund Your Account
There are two ways to fund your account; either a direct transfer or a gold IRA rollover. Your choice depends on your overall retirement planning strategy, with particular emphasis on tax implications, transaction fees, age to retirement, and required minimum distributions.
When you have picked the method best suited to your needs, funding your account is a simple matter of authorizing the transfer or rollover of funds from your existing IRA to your new accounts. You should keep track of the entire process from start to finish in case there are any irregularities.
Choose Your Precious Metals
Once your funds have been reflected in your new account, you can begin investing in gold and silver coins, and other precious metals. Many of the top custodians allow you to browse and purchase precious metals directly from their website from the comfort of your home.
You should make sure that whichever precious metals you invest in are part of the IRS-approved metals list to avoid becoming heavily invested in worthless assets. Some of the gold and silver coins you can invest in include:
American gold eagle
Australian Kangaroo/Nugget
Canadian maple leaf
Chinese Gold Panda
It is not always easy to determine whether gold, silver, platinum, or palladium is of the required purity to be approved for an IRA investment. This is why it is a good idea to work with a reputable custodian rather than taking the risk of buying directly from a precious metals dealer.
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Conclusion
When you purchase gold, you acquire one of the most stable forms of investment. You can say goodbye to the volatility and constant market struggles that are part of the everyday life of those who invest in other assets.
As long as you have clear retirement plans and are diligent in your search for a preferred custodian, being told to invest in gold may be the best investment advice you will ever get. The tax benefits and protection that are found in gold holdings cannot be compared to any other tangible assets.
Do yourself a favor and start investing in gold by initiating the process today. Safeguard your personal finance in the safe haven that many investors flock to!
About Arthur Karter
Hi, I’m Arthur, and nobody wants to wake up in their 50s like me that they are in serious debt with minimal assets. This wake-up call forced me to reevaluate everything. After going through the school of Hard Knocks, I’m ready to help you by sharing the best retirement choices and how they differ from all the same-old, same-old options that financial advisors sell. These alternatives will help you build and protect your wealth.
