Gold and precious metals have long been viewed as a great way to diversify your IRA portfolio, and gold in particular has recently garnered the attention of many investors. With the stock market and economy on a seemingly endless roller coaster ride, there is a growing interest in investing in gold and precious metals in a self-directed IRA.
Below are some of the common questions investors often ask.
How do I invest in gold and precious metals within a self-directed IRA?
The first step would be to establish and fund your IRA account with a self-directed IRA custodian. A self-directed IRA account is usually funded by a direct transfer or rollover from another IRA, 401(k) or other qualified retirement plan. If eligible, you may also make an annual IRA contribution.
Once your account is funded you can select the metals you would like to invest in and send instruction to purchase them to your IRA custodian. Your custodian will send payment from your self-directed IRA along with shipping instructions to the precious metals dealer.
What should I look for in a self-directed IRA custodian?
First, make sure the IRA custodian will allow you to invest in precious metals. Find several custodians and compare their IRA fee schedules. Fees may vary among firms but typically range from $200-$400 or more. Also, check out the custodian’s service level and ask about its processing time.
STRATA Trust Company invites you to compare our IRA fees. Check out our IRA Fee Schedule.
What types of precious metals can I invest in with my IRA?
Initially the Internal Revenue Code Section 408 only mentioned two coins as being IRA permissible: American Gold Eagles and Silver Eagles. However, in 1997, gold bullion, silver bullion, platinum and palladium also became approved for IRA investments. All bullion and coins must meet certain minimum fineness requirements and be COMEX or NYMEX approved. For more information, please refer to our list of acceptable precious metals.
Can I purchase precious metals I already own?
The IRS does not permit you to purchase any metals that you personally own, which would be considered a prohibited transaction. As with any IRA asset, precious metals should be purchased directly by your IRA custodian from your precious metals dealer.
Where do I find a precious metals dealer?
You can find a precious metals dealer through trade groups such as Industry Council for Tangible Assets (ICTA) or the American Numismatic Association (ANA). As a word of caution, you should check and compare prices with several precious metals dealers. Make sure the dealer has experience and is in good standing with the state in which it operates. You must place your buy and sell orders directly with the precious metals dealer. Your IRA custodian does not place these trades for you.
Where are the precious metals stored when purchased by my IRA?
In compliance with IRS rules, precious metals held by your IRA are stored at a third-party depository used by STRATA Trust Company: Delaware Depository. Precious metals can be stored within a storage facility in two ways: commingled, where metals for different owners are all stored together in an area within the depository designated for the IRA custodian’s customers, or segregated, where metals are stored separately for each investor. You should expect to pay an annual storage fee, in addition to your annual IRA fee.
Can I receive the precious metals when I start taking distributions from my IRA?
Yes. If you decide not to sell or liquidate the precious metals held in your IRA, you may elect to take an in-kind distribution, in which you take physical possession of the bullion or coins. Your IRA custodian will then make arrangements for the depository to ship the bullion or coins directly to you.
Why consider investing in precious metals in a self-directed IRA?
Historically, gold and other precious metals provide one of the few ways to hedge or protect assets from high inflation, stock market volatility and economic uncertainty. Gold in particular is often referred to as the crisis commodity because it tends to appreciate in value in response to negative economic, monetary or political conditions.
How would the precious metals in my IRA with STRATA be priced or valued?
All precious metal values reported on STRATA’s account statements and online records are estimated bid values provided by www.BullionValues.org. Estimated bid values are considered to be conservative estimates, particularly for proof coins, and should not be used as a firm bid price to buy by any broker or dealer. Estimated bid values are generally based on small quantities, and the actual quantity of a transaction may affect the price received for any given bullion item. In addition, estimated bid values do not include dealer mark-ups, mark-downs or commissions. Before making a decision to buy or sell any specific bullion product, an IRA owner is urged to obtain and compare pricing from various sources, including your precious metal dealer.
Want more information?
To learn more about investing in gold and precious metals in an IRA with STRATA Trust Company:
• Visit our Precious Metals IRA investing section on our website.
• Call us at 866-928-9394.