The four precious metals that may be held in an individual retirement account are gold, silver, platinum, and palladium, as long as they are IRS-approved coin or bar products. Adding precious metals to an IRA account may provide investors with additional diversification and growth opportunities. However, there are very strict rules and regulations for precious metals investments with an IRA account. In fact, there are only certain gold, silver, platinum, and palladium products that are eligible for inclusion in an IRA account.
Here we will outline the available products. All American Eagles are eligible to participate, as are investment coins from Mexico, Canada, Austria and Australia. Gold bars are eligible as long as they are. Other precious metal bars are suitable, provided they are.
The IRA custodian bank processes the payments and the dealer sends your precious metals to the custodian. Self-managed IRA custodian banks allow investors to invest in alternative assets such as precious metals and real estate. Opening a self-directed IRA and investing in precious metals is a bit more complicated than opening a traditional IRA or Roth IRA. However, there are specially designed precious metal IRAs that allow you to invest in gold, palladium, silver, and other valuable metals for retirement.
Precious metal IRAs are generally only useful if you have a strong portfolio and want to diversify your investments by setting aside a small amount for physical gold, silver, platinum, or palladium. With self-directed IRAs, you can invest in a wide variety of unconventional assets, including precious metals, real estate, and even cryptocurrencies. According to Drew Feutz, certified financial planner (CFP) at Market Street Wealth Management Advisors, perhaps the most important thing is that precious metal IRAs are more expensive than other investment options. If you want easier exposure to these investments without having to open a specific type of IRA or find custodians, dealers, and depositories, consider investing in securities such as exchange traded funds (ETFs) or mutual funds that track precious metal indices or prices.
Precious metal holdings can offer certain tax and data protection benefits that other investment instruments do not offer. United States Precious Metals specifically warns potential investors that gross margins for selling rare coins often exceed those of other investment vehicles due to factors that apply to the rare coin market. As a result, rare coins should be considered long-term investments with a holding period of at least three (to five) years, making them ideal for precious metal IRAs. These minimum withdrawals can get more complicated, as you’ll be forced to make them at intervals equal to the total pieces of precious metal you own, and individual precious metals can retail for thousands of dollars per ounce. You should be particularly careful if you contribute to the IRA, as unapproved metals are rejected by the custodian.
Precious metals IRAs could be a viable option for some investors who are concerned about inflation and market volatility. Second, while gold and other metals have held their value over the long term in the past, they could fall short of the performance of other asset classes such as stocks, particularly when reinvested dividend growth is considered.