Getting to Grips with Gold – Gold in Your IRA
The self directed IRA offers an almost unlimited amount of investment freedom. With this freedom, it’s easy to get carried away. In this article, when we talk about the real estate IRA or the gold IRA, we’re referring to the same investment vehicle. It’s just people often prefer to dedicate their investments to one type of commodity.
Let’s take a look at how you should go about getting gold into your IRA and why this is a good decision.
Why Should You Invest in Gold?
Gold is one of those assets that’s safe, relatively speaking. It’s similar to paper currency in that it will rarely fluctuate wildly, and a complete crash is something you’ll only see every few generations. They’re similar, but they also exist at opposite ends of the investing spectrum.
The fact is currency and gold can’t have a high price at the same time. Gold will only ever reach its peak when paper currency is weak. And, recently, this has been the case. In the wake of the recession, gold prices soared and hit record highs. As the markets have recovered, gold has decreased in price again.
We’re reaching a point where the economic recovery is in full swing around the world. Gold will most likely continue to decline. Paper currency is bound to get stronger again.
While you’re unlikely to make a huge amount of money at this point, you will be able to find gold available at bargain prices. You don’t need huge amounts of money to get started.
Is Gold Different from Precious Metals?
The precious metal IRA involves investing in non-traditional metals like platinum and palladium. Gold could technically fall under the definition of a precious metal, but investors tend to see them as separate.
Other precious metals tend to have real uses. Gold is usually used as a way to protect assets when paper currency collapses. It’s what has happened in every great economic recession previously.
What Limitations Do You Have?
Investors are under the same limitations with a self directed IRA as they are with any other form of IRA. You can’t invest in things like insurance and fine art. You’re also limited by the amount you can put into your IRA every year.
There are no limitations on the amount of money your IRA can make within the investment vehicle, however.
How to Buy Gold and Invest
The problem with the IRA is it’s difficult to understand the concept. The IRA is like a company. It isn’t in your name, and you’re prohibited from any actions that could ‘benefit yourself’.
Of course, it sounds like nonsense because that’s why you’re investing in the first place.
You have to think over every move. You can’t buy gold by signing a check and handing it over. Most gold transactions are performed through trustee to trustee transfers.
Before you can make these transfers, the gold will need to be inspected and understood for purity and held in a secure facility. Most custodians won’t facilitate a transfer if it isn’t held in a secure facility.
Furthermore, you couldn’t store the gold in your own home. This is another limitation. By storing anything at home, you’re implying the gold is yours. It isn’t yours. It’s the property of the IRA. You own the IRA, though. It’s an important distinction to make.
If you fall foul of any of the rules put in place by the Federal Government, you could potentially find any profits wiped out by fines and taxes. In extreme cases, your account could be closed completely. This is why having a financial advisor who specializes in the gold IRA is essential.
Author Bio
Ashley has a financial background and has been analyzing various investment options for retired individuals. Here she shares her knowledge on Self Directed IRA with the elderly.
