Gold IRAs De-Mystified For The Average Investor
Updated: Nov 19, 2019
Many of you are most likely familiar with traditional IRAs, like a Roth or 401k, but have you heard about gold IRAs? With something so different than the norm, it can be hard to determine the value gold IRAs can bring to the table.
So if you're curious about gold IRAs, as well as how they work, you're definitely in the right place. So please pay close attention, and all of your questions will be answered. It doesn't have to be super complicated, it just needs to be properly explained, and that's what we'll do for you.
You also may have noticed a sudden surge in the value of gold over the past decade. This is due to the fact that more and more people are opting for gold-based retirement assets after the recession of 08. This means that the investment opportunity is quite lucrative, and as more people opt for the safety gold provides, your investment is bound to grow.
So without wasting anymore of your precious time, let's take a deep dive into a Gold IRA.
What are gold IRAs?
A gold IRA, as the name suggests, is an IRA based around gold. Not only is it based around gold, but it's a precious metal IRA. A precious metal IRA works a bit differently than a traditional IRA, and this is due to the fact that instead of holding paper investments, a precious metal IRA holds physical bars or bullion coins. In the case of a gold IRA, bullion coins or bars are obviously gold.
What exactly does an IRA do? What's the goal?
An IRA, in essence, is an account geared towards your retirement. They have certain rules and regulations, and many IRAs cannot be assessed without penalties until you're at least 59 , and you'll need to take forced distributions once you reach age 70 . Plus, with so many different IRAs invested in every corner of the market, it can be hard to determine which one is right for you.
Luckily, a gold IRA is relatively simple to understand in comparison. This is due to the fact that gold is a precious metal, and chances are you already have some of it. Gold IRAs will function in the same way your traditional IRA will, but the investment side is a bit different. Also, please keep in mind that any type of IRA you invest in is technically not a liquid account.
While a traditional IRA, roth or deferred, is exposed to the market, a gold IRA is not directly impacted by standard market projections. To put this simply, it means that your gold IRA can still profit even if the stock market crashes. Therefore, a gold IRA can be a great asset to keep in the long term as a risk management tool.
There are also some other minor details you need to understand about a gold based IRA. For example, while they're extremely tax efficient, you won't receive any dividends. The only downside to no dividends, is that your level of growth might not be as substantial in comparison to a traditional IRA. There is no need to panic, though, because you'll be exposed to a more level investment option with less risk. Also, historically, gold has at least kept up with or beat inflation.
At the end of the day, when it comes to investing in gold IRAs, you need to consider your risk tolerance. You also need to consider if you're looking for a safe bet, or something that's going to grow aggressively. If your tolerance is the latter, you might want to go the traditional route.
So how does a precious metal or gold IRA work?
Now, if you've made it this far, you might be thinking it's a pretty good idea to allocate some assets into a gold IRA. It's not as hard as you may think to set one up, it just takes some additional knowledge and steps. Luckily, we're here to help you through the process. So let's dive right in, and take a look at how you can go about investing in gold IRAs.
Where do I start?
When it comes to opening up one of these gold IRAs, the process is a bit different than a traditional IRA. Most traditional IRAs tend to have the money managed by a broker or firm, and are very hands off. In gold IRAs, you'll need to be a bit more hands on. The proper phrase for this is a self-directed IRA. To put it simply, it just means that you'll be handling funds in a more hands on way.
Who can help?
When it comes to opening up a self-directed IRA for precious metals, you'll need a broker. The broker will end up using your funds to buy gold, and a custodian to create and run the account. At the end of the day, this is the simplest way to have a Gold IRA opened up. Also, you should be aware of the fact that you do need funds present in order to purchase the gold. Check out Regals Assets. They are a company we have worked with and highly recommend.
What do the fees look like?
Since it requires a bit more effort to go about opening one, the fees are going to be a bit higher. Luckily, since you'll literally have gold, this shouldn't be too much of an issue and the fees are most certainly reasonable. To make money you have to spend money right?
What forms do gold IRAs come in?
When it comes to one of these gold IRAs, you might be wondering how the tax exposure works. The beauty of a gold IRA is that it can be utilized as either a traditional IRA or a Roth IRA. Either way, you'll at least have a couple of options when it comes to open one in regard to taxing. For whichever IRA type you choose, you can expect the same type of rules and regulations.
Also, please make sure you understand that gold IRAs are only able to purchase gold bullion coins or bars, and that's the only metal you'll be able to use. For other precious metals, you would need to invest separately.
The last you'll need to know about a gold IRA are some of the IRS based rules. For example, when your IRA is comprised of physical gold, the account needs to be managed by the trustee of the IRA and not the owner. Plus, you'll need to make sure the gold is stored at an IRS approved location. This means that you won't be able to stash it anywhere that the IRS does not seem fit (safety deposit boxes, safes, other locations).
So while there are certainly some differences when it comes to the process, if you do it right, it's still very simple to do.
With any type of IRA investment, you need to take the time to understand them. Every account is different, and every account has its own benefits. Gold IRAs are not hard to understand, and like any other precious metal IRA. can prove to be a valuable addition to your portfolio.
When it comes to retirement, you never want to put all of your eggs in one basket. Having diversity is key, gold IRAs can help you achieve that.
The next time you evaluate your portfolio, be sure to take a look into gold IRAs. A gold IRA can be quite useful, and understanding how they protect and improve your portfolio is definitely important.
If you want to make a safe bet, there is nothing safer than gold. More and more people are turning to gold since the recent recession of ‘08, will you?
If you decide that a Gold IRA or a Gold 401k rollover or maybe even a transfer may be right for you and you want to learn more we encourage you to request more information from Regal Assets. They will send you a free, no hassle Gold Investment kit once you click on the link below.
To see a review on Regal Assets, visit our site at GoldIRAs101.com We have personally used these guys for our gold investment purposes and highly endorse them.
The Gold IRAs 101 Team