Secure Your Retirement by Investing in Precious Metals

If you’re trying to reach retirement with a plan that works for you, you might be checking with different wealth management or investment firms trying to find information on opening an IRA. Maybe you’ve heard of gold or silver as an investment option, but you aren’t sure how exactly to do it. It’s good to know why precious metals are a great investment option, especially for a long-term retirement savings plan, but even more so how you can include them even with other assets.

Why Precious Metals Can Be Important To Own

Some reasons people won’t consider buying precious metals is that numismatics seems too complex of a field for them to understand, and precious metals aren’t shares of a company or listed publicly in the same ways that stocks, bonds, ETFs and REITs are. But they are highly valuable substances, and because they have a limited global supply, their value continues to go up over time. While the US Treasury Department and Federal Reserve no longer use the gold standard, gold and silver coins can still be used as legal tender, but even more so they can be held onto as a protection against inflation and overcome the effects of a recession. However, buying them and including them in your portfolio can be a little more complex than buying stocks or REIT shares.

Investing In Physical Precious Metals

One thing that can be very confusing for investors or potential precious metal owners is understanding investing in gold ETFs and actual physical gold. There is an option to buy a gold ETF which is one way investors could own a share of gold without needing to worry about storage fees, or even having to transport it anywhere because it’s already kept in a vault. Plus you can sell your shares any time. The problem is you do not have any claim to any physical gold, so if you needed to claim it for an emergency, you could not do so. And a gold ETF would become worthless if the company holding the gold dissolved.

That’s why buying physical precious metals from a reputable bullion dealer is by far the recommended strategy for investing. When you do this, you have your choice of bullion, and you’re in control of when it’s stored and when it’s delivered. You want to be careful not to put all of your portfolio in precious metals, but making a portion of it allocated to them can help offset other risks.

Opening An IRA Using Precious Metals

The process of opening a gold and silver IRA is a complex one because you have to make sure you choose the right IRA for it, and you have to make sure it complies with the IRS’s rules. The first thing to know is that any physical gold or silver in an IRA cannot be kept at your home. It must be kept at an authorized depository where a custodian oversees the precious metals and conducts all transactions associated with them on your behalf. But basically, you need to purchase the bullion from an authorized bullion dealer and arrange for the transfer of it to the depository without touching it yourself. You cannot have it physically delivered to your home unless you’re older than age 59 1/2, the same requirement that comes with a regular IRA withdrawal. But the bullion is now in your name.

IRAs That Allow Precious Metals To Be Purchased

There are many different types of IRAs though usually traditional and Roth IRAs are the most commonly known ones. But most IRA custodians do not allow physical precious metals to be invested in unless they offer self-directed IRA services. Even then, your options can be very limited. What you can also do with a self-directed IRA is set up an LLC based IRA where you can invest in any IRS approved assets and it falls in an IRA account but it’s completely managed by you. Keep in mind that the LLC route can be very expensive and will likely need the help of an experienced advisor or CPA.

The bottom line is investing in physical precious metals as part of an IRA can entail some high upfront costs as well as ongoing storage fees. But if you’ve found good deals for saving on these expenses and can handle the risk, you certainly do have the potential to see high returns in your portfolio.

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