Preparing for retirement is something that must be taken seriously and planning must commence long before the age of your retirement. There are many retirement plans, and they include the popular 401(K), Roth IRA, 403(b), SEP, SIMPLE IRA, SARSEP, and others.
These plans all have different modalities but the common denominator in all of them is savings for the golden years. These savings for the golden years are what everyone who earns an income strives to have. However, unfortunately, some people’s investment is met with ill fortune at the point of returns. That is why people are turning to gold for retirement savings/investments that are secure.
In this article, we will look at gold IRAs and how to go about opening and operating the account and choosing the best company to work with.
Understanding Gold IRA
Through the years, gold has been seen as a solid store of wealth which makes it a good investment. Many people are looking to store their wealth by investing in gold and there are several ways of doing this. One of the most common ways of investing in gold for retirement is through a gold IRA (Individual Retirement Account).
Visit https://www.usatoday.com/ for full details on Gold IRAs.
Gold IRA is fundamentally an IRA with a different product. This means that your individual retirement account can hold gold or any other precious metal that you so desire in any form. Though commonly known as gold IRA, it can hold different precious metals and the approved ones are gold, silver, platinum, and palladium. However, there are rules and regulations that you must adhere to in operating this account.
The major point to note about this investment is that the precious metal that you hold with your precious metals account must meet the weight and purity standard set by the IRS. The following are the purity criteria for the precious metals:-
- Gold 99.5%
- Silver 99.9%
- Platinum 99.95%
- Palladium 99.95%
Some products that qualify include Australian Koala bullion coins, Canadian Maple Leaf coins, and PAMP Suisse bars. However, an exception is made by the IRS for American Eagle coins even though they don’t meet this purity standard.
This IRA offers income earners the opportunity to hold physical assets in their retirement savings/portfolio which is considered a balanced investment strategy.
Steps to Opening a Precious Metals IRA
Opening a gold Individual Retirement Account is not difficult; all you need to do is follow the steps below: –
1. Choose a Custodian for Your Self-Directed IRA
One of the rules we talked about for this type of account is that you can only open and operate it through a custodian. This custodian can be a bank, trust company, or any organization approved by the IRS. These custodians help investors to invest in different assets such as real estate and precious metals which are considered alternative assets.
2. Choose a Gold Dealer or Precious Metals Company
After choosing a custodian to work with, the next step is to choose the precious metal dealer or company to buy from. That’s the person or company that you will instruct your custodian to buy the precious metal from.
Before choosing a dealer, ensure that they are legit and reputable. One sure way of ascertaining this is by looking out for dealers who are members of professional associations such as the Industry Council for Tangible Assets (ICTA), American Numismatic Association (ANA), or Professional Numismatists Guild (PNG). Additionally, your custodian may also have some recommendations for you but be sure to do your due diligence before signing up with any dealer.
3. Decide on the Precious Metal to Buy
Work with the dealer and your custodian to select the precious metal and product to buy. Bear in mind the weight and purity standard and do not forget to confirm the approval of any product by the Internal Revenue Service.
4. Select a Depository
Another rule for this investment or account is that you cannot store the commodity in your home or any other location apart from the approved depositaries. Therefore, you have to look for the best depository that meets the requirements of the Internal Revenue Code.
5. Round up the Transaction
Once you have sorted the 4 steps above, you can go ahead to round up the transaction by making your purchase. Remember that it is your custodian who will make the payments and instruct the dealer of the depository to ship the commodity.
How to Choose the Best Gold IRA Company
There are many companies through which one can open and operate a gold IRA and they are known as Self-directed IRA custodians. They include Fidelity, Augusta, Goldco, Noble, Hartford, Birch, and a few others. Oftentimes, these companies offer other financial products and services apart from the precious metals IRA. What this means in essence is that you may be an existing customer for a different financial product or service with any of these companies.
If it so happens that you are an existing customer of a company that offers precious metals IRA, choosing a custodian should not be difficult or stressful. All you need is a little due diligence about the company as per precious metals IRA.
For example, if you are an existing customer with Fidelity, you can carry out an analysis of Fidelity’s gold IRA to see whether you will just go ahead and open a precious metal IRA with them or not. We believe that the company will be glad to have your patronage so they will provide you with the necessary information needed.
For those who are not in the above categories, the following quick tips will help you:-
- Look out for a stellar reputation
- Find out how seamless their transactions are
- Do they have education programs for their customers?
- How transparent are they?
- Do they use simple and unambiguous terms when explaining the plan to you or do they leave you more confused?
- How responsive is their customer care?
- What is their rating on independent review platforms?
Getting information about a gold IRA company to use as a custodian depends on the type of questions you ask. The questions you ask come from a place of understanding the subject. That is why we have given you the basics of this investment.
Do not be in a hurry to open a precious metal IRA; take out time to ask the questions we have stated above and follow the tips. With due diligence, you are sure to make the right choice.