If you are saving for your retirement, you may want to think about putting some of your retirement assets into precious metals. Unlike the typical stocks, annuities, bonds, and mutual funds, precious metals will not become worthless. However, they do not pay interest. If you decide to invest individual retreatment account (IRA) assets in precious metals, you must need to plan accordingly. Also, you must know which metals to include and you can benefit from your investment. Here is a guide to help you when putting precious metals in an IRA:
Decide Between Self-Directed Traditional Account or Roth IRA
Whether you open a self-directed traditional or Roth IRA, make sure to open the account with a trustee or custodian experienced in handling precious metal transactions. If you choose a self-directed account, you will decide what to invest in, instead of having the choice restricted to the IRA investment products provided brokerage, banks, or mutual fund handing your account. Contributions with traditional IRA are tax-deductible while retirement distributions are taxed. Meanwhile, a Roth IRA doesn’t get you a tax deduction for contributions; however, retirement distributions are tax-free.
Have a Cash Account to Deposit Funds To
Keep in mind that with a precious metal IRA, you still have to follow the same Internal Revenue Service contribution rules as other IRAs. You can contribute up to $5, 000 per year collectively to all your IRAs or $6, 000 if you are more than 50 years old. Make sure to review the amount you have already contributed to IRAs during the year so you know how much to put into your precious metal IRA.
Decide on the Precious Metal to Purchase
Pick from IRS-approved gold, silver, platinum, and palladium legal tender bullion minted by the U. S. and some foreign countries such as China, Canada, Austria, and Australia. Also, you can include precious metal bars that international banks and major mining companies issue. Such highly liquid assets trade in the markets daily at prevailing bullion prices. Your IRA custodian will draw from your cash account to buy precious metals and store them with a depository service company. You will get periodic statements that list your holdings from your custodian.
Monitor Market Prices of Precious Metals
Price fluctuations are something you must take advantage of if you want to increase your account. If you wish to sell metals, inform your custodian about the metals to sell. They will hold the sale proceeds in your cash account while waiting for further instructions from you.