The world of economy and investments is experiencing changes quite regularly, most of which are not things that should get you by surprise. These days, there are endless investment opportunities with each one of them being different to the other in ways that should make you want to take some time to ponder about each opportunity before throwing in a single coin into an investment.
One of the investment opportunities that is quite novel yet growing increasingly in popularity is having a precious metal Individual Retirement Account (IRA). The majority of individuals who follow this path go gold as their metal of choice. Well, having gold in your IRA is quite a brilliant idea, until you get some things wrong and are in trouble with the IRS. But hey, couldn’t it be just right if you get some quick tips to guide you through investing in a physical gold IRA so you don’t get in trouble as well as maximize your portfolio potential?
So, let’s get to it.
1. Get a trusted custodian
The most basic rule you must have in mind when planning to store physical gold in an IRA is that you can never move or add gold that you have into a self-directed IRA. You can only do that through a custodian who should purchase the gold on your behalf and then make arrangement for delivery of the gold to the target facility.
The facility should specialize in protecting precious metals and be a financial institution, such as a bank, or a non-financial institution such as a depository, that is approved by the IRS.
2. If you can, avoid storing the gold in your home
You should never consider storing gold in your home if it’s meant to be held in a self-directed IRA. The IRS has already set restrictions that prevent you from storing gold from a self-directed IRA in your safe deposit box or your safe at home.
Storing gold that’s supposed to be in an IRA at home may attract tax charges, and an additional 10% penalty if you’re of less than 591/2 years of age. Such a penalty is usually as a result of early withdrawal charges. Since storing IRA assets in your home is considered a prohibited transaction by the IRS, it’s best to avoid it.
If you want to keep some gold in your home, see to it that it’s not part of an IRA. It’s your right as an American citizen to purchase as many gold bars or coins as you wish and keep them at home so long as you won’t claim that they are part of your IRA.
3. Be careful when choosing an IRA company
There are lots of companies that can assist if you want to have physical gold in your IRA. However, some are not approved by the IRS, and still, yet, others don’t offer quality services despite being IRSapproved.
Before deciding to get your services from a gold IRA company, do your background checks and research as much as you can. Read reviews, view ratings, ask questions and listen to your inner voice.
4. Avoid dealers that promote “home storage”
Some dealers are in favour of storing your physical gold in a “Checkbook LLC”, to avoid the home storage restrictions from IRS. Such dealers argue that an IRA Owner can buy and hold bullion in their home since the bullion is supposedly owned by the LLC and not the IRA.
While such a concept seems quite sensible at first, the reality is that it’s still home storage, and will eventually conflict with laws that guide taxadvantaged IRA investments. Acquiring assets such as gold coins and bars and storing them in your IRA on a pretax basis is a good thing, so long as you don’t manage the account by yourself.
For maximum benefits and security, the assets in your IRA should be held by an IRS-recognized situation or a financial institution such as a bank
Final thoughts,
Having an IRA is a brilliant idea, as it secures your financial future, and gives you peace of mind. Having a gold IRA makes the deal even better, but you’ve got to follow the set rules and procedures. The good thing is that it’s not a hard thing to do. The rules discussed in this article should go a long way towards making your investment life simpler and less risky. So long as you avoid trouble with the IRS, you can keep as much bullion as you wish in your IRA for a secure financial life as you age.
