It is possible to invest in gold, silver, platinum, and other precious metals through an IRA. While it may sound like a great way to diversify one’s portfolio without having too much exposure to the volatility of stocks or bonds, there are some essential things you need to know about the difference before investing in Precious Metals vs. Paper Currency IRAs:
What You Need to Know blog post on Precious Metal and Paper Currency:
- The IRS only allows you to invest in precious metals that the U.S. Mint approves
– these coins must be at least .995 fine and come from one of four countries: Canada, Mexico, Austria, or South Africa (the most popular choices)
- You can also invest in silver bars, but these must be .999 fine, and the company you are buying from needs to have an approved IRS form
– this lets them know that they are dealing with a retirement account, so they will not charge any fees. However, there is still no guarantee of how much profit your investment could make because, unlike coins, there is no set price for silver bars.
- Your Precious Metals need to be kept in your IRA’s physical possession.
This means that you cannot invest with companies like Goldline or Sprott, who keep the metal for their customers because there is no guarantee that they will get it back if something happens to them (like bankruptcy).
- Precious Metals can be a great way to diversify your portfolio, but they are still very volatile.
-If you have other IRAs invested in stocks or bonds as well as gold and silver coins, this could lead to high levels of risk, for which you should consider speaking with a financial planner before making any decisions.
- Finally, keep in mind that you will have to pay for storage, insurance, and other fees which are not included when calculating your annual IRA investments.
-This means that even though your Precious Metals investment may be worth more than it was at the beginning of the year, you will not get to keep all of this profit until retirement. This is why IRA’s are a good idea in general: because they allow your investments to grow without being taxed for many years.
In conclusion, Precious Metals are not a suitable investment for all kinds of people, but they can be great if you have an appropriate portfolio to go with them.