How Do I Invest in Precious Metals if I Already Have an IRA?
For investors looking to expand their portfolios with the inclusion of precious metal assets in their preexisting IRA, you will be pleasantly surprised to find out just how easy the procedure is to accomplish. In a process known as an IRA “rollover,” you will set up an account with a self-directed IRA custodian who is fully versed in all aspects of the actual transfer of funds along with and administrative procedures that might be involved with the transaction.
The advantage of a self-directed IRA is the flexibility it affords the investor in determining the types of investments they want to include in their portfolio that go beyond the standard options of stocks, bonds, and mutual funds. Rather, this option offers additional investing options, the acceptability of which is determined by the Internal Revenue Service, and includes precious metals, futures, and real estate holdings.
Investing in Your Precious Metals IRA Account
As mentioned, setting up a precious metals IRA account is easy. Indeed, from the point of establishing the account, it can be funded and holding precious metals within approximately two weeks from your decision to broaden your portfolio.
The Five-Step Process Establishing a Self-directing IRA
Select Your IRA Custodian
Choosing a custodian for your self-directed precious metals IRA is the first, and probably the most important, step you need to set up your account. With the fiduciary responsibility of looking after their client’s best interest at all times, your IRA custodian will arrange for the transfer and delivery of precious metals from the appropriate depositories, in addition to actually making your precious metal purchases from the dealer. Further services include providing monthly and annual statements, while facilitating the transfer of funds from traditional IRA accounts, 401Ks, and other retirement accounts to your newly setup self-directed account.
Select Your Precious Metal of Choice
Once your account is established and you are ready to add to your portfolio, the next decision you will make is choosing which precious metals to add to your account. As mentioned, the Internal Revenue Service determines what assets are eligible for inclusion, so make sure that the investment items you select are on the approved list. Again, this is where your IRA custodian can help you since they should be more than knowledgeable on the subject.
Locating a Precious Metals Dealer
Shopping around for the best possible precious metals bullion dealer is the next step in funding your self-directed IRA. When parsing through your options, look for established names with a sterling reputation. Confirming that a particular dealer already has an established connection with a reputable self-directing IRA custodian ensures a seamless connection towards the quickest establishment of your IRA account.
Purchasing Your Precious Metals
Once you have selected the IRA custodian, precious metal bullion dealers you wish to work with, and your account is fully setup, you will direct your IRA custodian to buy precious metals on your behalf. Funds will be withdrawn from your IRA account to make the purchases before arranging to transfer those purchased bullion products to an approved and eligible depository for safe storage.
Ongoing Financial Reporting
Once you have made your purchase and added it to your self-directing IRA account, you will receive regular statements and accounting reports throughout the year. Just some of the pertinent data your IRA custodian will supply includes your current account holdings and their market value.
Common Rollover Guidelines to Consider
Common considerations you should keep in mind when establishing an IRA rollover account include:
To begin with, if your dream of precious bullion ownership extends to physically holding the newly purchased booty, you will be disappointed. Indeed, the precious bullion deposits are kept at a secured depository prior to disbursement. In the same manner as a traditional IRA account, the assets contained within remain untaxed, and the government wants to ensure that they remain safe until it is disbursed and the taxes are paid.
Second, whenever you conduct a transaction with your self-directed IRA account, you should always let your custodial agent handle all movement of money and transfers of funds. Mistakes, such as an accidental withdrawal can cause a disruption of the account’s tax deferred status, so it is best to have your custodian, who is well versed in these types of transactions, complete any purchases.
Finally, under current Internal Revenue Service guidelines, you may still be able to contribute more assets once you have completed your IRA rollover. These guidelines include such specifications as age limits and maximum annual limits towards contributions, but it is an excellent vehicle to help you invest in additional precious metals over the course of your lifetime.