Choosing your Gold IRA company is the first step to opening your IRA. If you decide to invest in a precious metals IRA, you should do so conservatively. Depending on your financial situation, most experts recommend investing no more than 5 to 10% of your retirement savings in precious metals. Eligible products that meet these criteria include Canadian Maple Leaf coins, Australian Koala investment coins,
and PAMP Suisse bars.
The IRS also allows American Eagle coins even though they don’t meet the 99.5% purity standard for gold. You can’t currently hold rare or collector coins, Swiss francs, British government bonds, and German marks in a self-directed IRA. By setting strict parameters for defining IRA gold, the IRS can ensure that people hold investment-grade rated assets in their self-managed gold IRA, as opposed to collectibles, which are not eligible for any preferential tax treatment. If you’re not sure whether a gold IRA or physical gold is best for you, check out my article that explains the differences as well
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Many people who want to avoid this risk instead let their Gold IRA company make it possible as a transfer from institution to institution instead of taking it on themselves. Unless you have multiple retirement accounts, it would be very risky to convert your entire balance into a gold IRA. Since you can also hold silver coins or gold bars, platinum and palladium in a gold IRA, a more correct term is, technically speaking, “precious metal IRA.” You can set up the SDIRA either as a traditional IRA (tax-deductible contributions) or as a Roth IRA (
tax-free distributions).
You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able to recommend one for you). If you want to hold physical gold in an IRA, the first step is to open a self-directed IRA (SDIRA), which you manage directly with a custodian bank. You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days. Making a mistake, even if it’s accidental, can be very costly. So it’s worth knowing what the IRS does and doesn’t do with your Gold IRA
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To comply with the many regulations surrounding gold IRAs, you can’t store your gold at home or in a safe deposit box. A self-managed IRA offers the same tax benefits as a traditional IRA, but allows you to hold precious metals and other alternative assets in accordance with IRS regulations. Opening a self-directed IRA and investing in precious metals is a bit more complicated than opening a traditional IRA or Roth IRA. They also take on the necessary administrative functions to ensure that your Gold IRA complies with all IRS regulations
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To set up a Gold IRA, you’ll need to work with a Gold IRA company to set up an account and buy the precious metals of your choice to fund it. Most gold IRA companies recommend or require that you work with a specific custodian and custodian, although some give you
a choice of two or more.
