If you’ve ever wondered, “what is a gold IRA?” you’ve come to the right place. It’s never too early to start planning for retirement. A Gold IRA account is a great way to secure your future with minimal risk. In this article, we plan to discuss Gold IRA rollover, Precious Metals IRA, and more. We’ll put you on the path to opening an IRA and securing your future with tangible, trustworthy Gold. Let’s start with the most basic question of all.
What is a Gold IRA Account?
The term IRA stands for an individual retirement account. As you can tell by the name, this account is designed to help you prepare for retirement. They’re typically seen as an alternative to a 401k account, which can only be granted through an employer. (Note: if you’re self-employed, you are your employer. There are self-employed 401k accounts). It is possible to have both an IRA and a 401k account, however, and many people choose to have both.
So what is a Gold IRA account? This is an account that allows you to hold Gold as opposed to liquid funds. It must be held separately from a traditional IRA, which only provides for mutual funds, stocks, and other investments that are considered more traditional. A Gold IRA is subject to the same rules. Like a standard IRA, you can set it up with pretax or after-tax dollars, and the IRS will cap your annual contributions.
Unfortunately, you’ll be paying higher fees than you would on a standard IRA. This is because the physical Gold has to be purchased by your broker-dealer (or custodian, whomever you choose to go with), and it has to be stored securely. You do not have the option to store your Gold yourself. It must be stored in an IRS-approved depository, though you can choose among the available sites.
Bullions or Coins
On that same note, the Gold must be in an approved format, such as bullion or coins. Not just any coins, either. The IRS only allows for certain types, though the list of accepted coins presents several options. The Gold must also be pure, although you don’t need to worry about this. The IRS enforces this rule, so the custodian buying your Gold and the company selling it are responsible for ensuring it is high enough purity.
Though most people open a Precious Metal IRA to buy physical Gold, there are other gold-related investments that you can make without actually buying bars or coins. For example, you could purchase stock in gold mining companies (though you can do this with a traditional IRA). You can also purchase exchange-traded funds, precious metals mutual funds, or precious metals commodity futures. The term “gold IRA” typically refers to an account someone opens to buy real Gold, but that isn’t always the case.
What is a Gold IRA Rollover?
We mentioned earlier that if you have an existing IRA account, you can’t simply add Gold to it. Your self-directed IRA, the account you will use to invest in Gold, must be separate. However, thanks to a Gold IRA rollover, you don’t necessarily need to create a whole new account.
So what is a Gold IRA rollover? A rollover converts part of an existing account into a precious metals investment. It doesn’t need to be an IRA, either. If you have a 401k plan, you can also roll some of that over into a Gold IRA. Fortunately, the rollover doesn’t trigger any tax implications, so you don’t need to worry about losing money if you deposit the money into the new account within sixty days.
Gold IRA Rollover vs. Transfer
A rollover is different from a transfer. With a Gold IRA rollover, you’re directly involved. After the money you wish to convert is withdrawn, you have sixty days to find a new custodian to open a Gold IRA. This must be a different custodian than the one in charge of your existing account.
With a Gold IRA transfer, you’re transferring funds from one Gold IRA to another. In this case, you never take possession of the funds, and the custodians handle the transfer. For this reason, a transfer is much easier than a rollover and is subject to fewer restrictions. And while you have more control over a rollover, you must also ensure that you abide by all the regulations. That responsibility falls on your shoulders. With a transfer, your custodians will handle all the details and confirm the rules are correctly followed.
Even though you will be directly involved in a rollover, it’s still a relatively simple process. Your custodian can guide you through everything and do quite a bit of it themselves. For example, if you’re rolling funds over from a 401k because you switched jobs, your new custodian can contact the old plan administrator and start the process.
What is a Precious Metals IRA?
Now that we’ve hopefully shed some light on the question of “what does Gold IRA mean?” let’s tackle a broader question: What is a Precious Metals IRA? Well, technically speaking, a Gold IRA is a precious metals IRA. However, there are more precious metals out there than just Gold. Most people are aware that the other big metal is silver. Silver, like Gold, is generally considered a safe investment because it’s widely used in various applications. What people might not know is that two more metals are allowed in IRA accounts: platinum and palladium.
Of the four metals you can invest in with an IRA, there’s no right or wrong answer to which metals you should go with. You must speak to a financial advisor, maybe even a few, to help decide what’s best for you. Like any investment, the value of precious metals goes up and down. Oddly, an advisor will recommend based on what the four metals are currently valued and what’s happening worldwide.
Platinum Precious Metals IRA
Let’s take platinum, for example. Platinum hit a slump in 2020 during the COVID-19 pandemic. Now that it’s out of the recession, many professionals expect the market demand to rise significantly soon. Like the other metals, platinum is used to make several products, including watches and jewelry. Something else that makes platinum valuable is its relative rarity. Most of it is mined in Russia and South Africa, meaning there aren’t many sources worldwide. It’s a finite resource, too, which means we’ll run out one day. Imagine how valuable your platinum will be when the mines run dry.
It’s also stayed consistently valuable over the past fifty years. Through several recessions, the price of platinum has either stayed where it’s at or risen. In the 1960s, platinum would go for a couple of hundred dollars per ounce. Now, it’s worth well over a thousand dollars for the same amount.
Then there’s palladium, otherwise known as white Gold. Like every other precious metal, it’s used extensively in jewelry. Unlike the other metals, it’s used in catalytic converters in cars. Palladium is so valuable it’s caused catalytic converter theft to rise dramatically in the past few years. Palladium’s value fluctuates more than other precious metals but is rarer than Gold. This makes it a riskier investment than most. Still, one that could potentially lead to a much bigger payout, but it is another reason you should speak with a financial advisor before making a big decision.
Get Started for Free
In the end, the answer is simple. What does Gold IRA mean? It means a reliable, comfortable retirement. Hopefully, we’ve shed some light on the value of precious metals and what they can do for your financial portfolio. It’s always a great time to invest, and we want to help you secure your future. That’s why we offer our 2023 Gold IRA kit, which is full of information to help you get started.
The only thing better than a comprehensive guide to investing in precious metals is a free Gold IRA kit. Our kit won’t cost you a penny. This Gold IRA Guide is free, and the shipping is free (not to mention pretty fast). We want you to save your money for your retirement! Get your kit now.
