So says GE Christenson (www.deviantinvestor.com) in edited excerpts from his original article*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Christenson goes on to say, in part:
Question: Why gold and silver in an IRA?
Answer: The simplest explanation is that gold and silver will protect your purchasing power. There are many other reasons including safety in the event of another economic melt-down such as what happened in 2008.
Question: Why not buy ETFs (Exchange Traded Funds) that invest in gold and silver, such as GLD, SLV, PSLV, and PHYS?
Answer: You certainly can. They are more convenient to buy and sell, and the annual fees are less. But, if you are looking for maximum safety, purchase metals in your IRA and have them stored in a secure, insured, private vault.
Question: Why can’t I store them in my personal safe deposit box instead of a private vault?
Answer: Per the IRS code, you can’t take delivery until you pay taxes. Don’t fight the IRS.
Question: How do I open an account?
Answer: Find a self-directed IRA custodian who will allow precious metals in your account, complete the paperwork, send it and the initial fee to the IRA custodian, and they will open the account.
Question: How do I find a self-directed IRA custodian?
Answer: Go to your favorite metals dealer – there are many – and look at their recommendations. My preference is Apmex.com but there are many fine choices for metals dealers, and they can recommend IRA custodians. Apmex currently suggests seven IRA custodians on their website.
Question: Once I get the account, how do I fund the account?
Answer: You can fund it with a non-taxable (partial or total) roll-over from an existing IRA, 401k, or 403(b) account, or by contributions under the current IRA rules.
Question: Then what?
Answer: The IRA is open, the money arrives from the rollover or contributions, and the IRA custodian asks you what you want to purchase with the funds and what dealer (such as Apmex) you wish to use. You tell the dealer what combination of silver and gold coins and bars (there are a few restrictions regarding what coins and bars are acceptable in IRAs) that you wish to purchase.
Question: Then what?
Answer: The metals are purchased and shipped to a bonded, insured, private storage facility in Delaware (or wherever) and stored. They are not in a bank. The IRA custodian sends periodic statements showing transactions and estimated fair market value of your gold and silver holdings.
Question: What does this cost?
Answer: It depends on the custodian, the size of your IRA, and the storage facility. Assume $200 – $400 per year as an estimate.
Question: Why so much?
Answer: Fees, IRS regulations, accounting, profit, and expenses. Gold and silver have increased 15% to 20% per year for the past decade. How has your money market account performed in that time? How have your brokerage accounts and mutual funds performed in that time? Did you feel safe or vulnerable during the crash of 2008? Would you feel safer if your IRA funds were not held in the banking or financial system? After considering these questions, the fees may seem quite reasonable. If not, then stay with what has been working for you.
An IRA that invests in physical gold and silver is NOT for everyone, but it may be appropriate for a portion of your retirement funds. It will probably be safer in the event of another financial meltdown, but it will be more expensive than a traditional IRA, and it is less convenient and flexible. Choose what works for you.
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
Some physical gold, silver, platinum and palladium bullion assets, in addition to traditional paper assets, can be part of your Individual Retirement Account (IRA) or Roth account and they can be bought and sold with no tax consequence until you move money out of the account. [This short articles reveals just what bullion assets can, and cannot, be included.] Words: 573