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Precious Metals IRA – What You Need to Know

by IRA Rollover in Gold IRA, Precious Metals IRA with Comments Off on Precious Metals IRA – What You Need to Know

While many people understand that a gold backed IRA is a good idea, savvy investors know that expanding into a precious metals IRA is the best way to diversify. It’s always a good idea to diversify for maximum security.

Precious metals are one of the best investments available to those looking for a stable investment that is less likely to erode over time. Throughout history, precious metals have held their value fairly well and rarely shift much. This has made them the go-to for investors who want to ensure a return on investment. Gold, silver, palladium and platinum are the four metals most likely to hold their value over time.

Since money can be printed it is not considered a solid investment. The value can fluctuate greatly and paper money may even lose all value. However, metal is a physical asset that cannot be printed or multiplied so it is not likely to lose its value.

Understanding Precious Metals

Gold and silver IRA accounts were the most common for years, but you can now add platinum and palladium to your investments through a precious metals IRA. If you currently hold a gold backed IRA, you may be able to switch it without setting up a whole new account.

Each investment is represented by actual metal which is held in a secure depository and insured. In many cases, should you choose to in the future, you can cash out by requesting real metal in the form of coins or ingots.

Investing in Gold

A very well known metal, gold has been used by nearly all civilizations to represent things of value. Only certain forms of gold are permitted in a gold IRA. The gold must be a certain purity. While it depends on the IRA provider as to which gold types are permitted, the following are commonly used:

  • American Eagle Coins
  • Canadian Maple Leaf Coins
  • Austrian Philharmonic Coins
  • Gold Bars from Approved Refiners

Where the gold is purchased and where it is held will depend on where you are setting up your gold and silver IRA.

Investing in Silver

Silver is considered to be a good, stable investment, though it is worth less than gold. The difference in price may be preferable for those looking to invest in a silver IRA account, with less money available. Like gold, the quality of the real silver backing the IRA is important.

Generally, Canadian Maple Leaf, Austrian Philharmonic and American Eagle silver coins are used to back the IRAs. Bars are usually 100 oz, but this may vary, depending on where you have set up your account.

Investing in Platinum

Platinum isn’t just for wedding rings and jewelry anymore. It’s also a worthy investment for anyone looking to the future. When it comes to platinum, your precious metals IRA will be backed by coins or bars from an accredited source. Coins may be Australian Koala, Canadian Maple Leaf or American Eagle.

Investing in Palladium

This rare, white precious metal is a unique addition to IRA accounts and can bring the value up considerably. Most IRAs will only accept bars from specific, accredited refiners, unlike the other metals, which are also available in the form of coins.

Gold vs. Silver: What’s the Difference?

If you are trying to decide between a gold IRA and a silver IRA, you may need a bit more information. Some people make their investment according to their preferred metal, but if you are looking at monetary stability, gold wins out.

Silver is frequently chosen by those who are looking for value at a lower cost. You get more metal for the amount you pay, since silver is not worth as much as gold. Silver prices tend to be based on supply and demand, which means the value can change quite a bit over the course of a year.

Gold, on the other hand, is valued for other reasons and does not rely much on supply and demand. If you can afford the premiums for gold, you will have a higher value investment. This will stand you in good stead over time.

Another reason gold is a better option is the fact that its value tends to hold more steadily than that of silver. In fact, when all other metals drop in value, it’s not uncommon for gold to rise. However, it is a good idea to diversify if you are worried about stability.

Investing in Precious Metals

Whether you are choosing a single metal account or a precious metals IRA, you have a few options for buying.

Self-Directed: This account type means that you choose where you want your funds to be invested. You have more control over everything and can specify the types of metal that you wish to invest in.

Traditional: If you have a traditional account, you may be able to roll it over. This is dependent on your gold ira company, but in most cases, it shouldn’t be an issue to move your monetary investments in an existing IRA to a precious metals IRA. Check that you will not have any tax issues before making the switch.

How Much to Invest

The amount to invest in your precious metals will depend on a few factors, including your budget, whether you want to build more equity for the future and how much you already have invested.

Take the time to understand all the risks and benefits before deciding which IRA to invest in. You may decide that a gold IRA is the best allotment of your funds. Or perhaps you want to branch out a bit more with a precious metals IRA. Either way, you will want to be fully informed before making any major decisions regarding your account. It’s not a bad idea to seek tax advice before investing.

If you are still debating which option to try, you might want to look into a gold and silver IRA where you can have both. Another option is the precious metals IRA, which is usually self-directed, allowing you to choose the metal amounts you prefer.

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