What is Gold IRA? The Million Dollar Question.

By | July 31, 2017

Gold IRA refers to an Individual RetirementAccount where gold is held in custody for the sole purpose of benefiting the IRA account owner. The gold must be in physical form, that is, it should be either in the form of bullions or coins. The Internal Revenue Codestates that the precious metal in question, in this case gold, must be stored in a specific manner. Most of the trustees opt to use the private depositories for storing gold. Thesedepositoriescontain security features like the motion, sound and vibration detectors to ensure that the gold is safe at all times.The gold must also be in the possession of either the trustee or the custodian and not the IRA owner. The trustee or custodian can be in the form of a bank, a savings and loan association, a federally insured credit union or an entity that has been approved by the IRS.
Gold coins and bars that have a purity of 0.995 or higherare permitted in a gold IRA account. The approved coins and gold bars that can be stored in a gold IRA account include American Gold Eagle coins, Valcambi Gold CombiBar, American Gold Buffalo coins, Austrian Gold Philharmonic coins, Australian Gold Kangaroo/ Nugget coins, Johnson Matthew Gold Bar, Canadian Gold Maple Leaf coins and the Credit Suisse Gold Bar.

Why should I invest in Gold IRA?


Inflation affects the economy in ways that one cannot begin to comprehend. The prices of commodities skyrocket. One of the investments that can help you during such times of crises is investing in gold. This should not come to you as a surprise as gold offers security. Investment in Gold IRA is, thus, a great way to secure your investments and the best part is that you know that the prices of gold can and will only go up.
Investing in Gold IRA is a smart choice to make. One of the best secrets in investing is that you should make diverse investments in different fields. By investing in gold, you are securing your future and your retirement.

Golden IRA rules

Types of Gold

The IRS requires that all the gold deposits should be of a particular standard and purity. Moreover, the gold deposits should be able to meet their standards. That is one of the reasons why you should research if your gold is the type that the IRS can work with. The IRS also states that all of your gold must only be from recognized manufactures who can ascertain their true value and purity (the purity must be 0.995 or even higher). You can store gold coins in your IRA but the coins, just like the gold bars, must also meet the high standards that have been set. Make sure that you follow these quality guidelines if you want to enjoy tax free deposits.
Do I really need a custodian?
You need alegit custodian. Finding the right custodian might be tough the first time, but after a few trials you will find the right custodian for your needs. After finding the right custodian, you need to create a self-directed IRA. A self-directed IRA gives you the freedom of investing in whatever you want. Once you have made the investment, the custodian just follows your lead and does the rest.

Custodian maintenance

Any IRA investor must maintain a Gold IRA and thus, the custodian is forced to accept other investments for examplethose involving precious metals. Keep in mind that the IRS does not require the custodian to accept each and every possible investment. Therefore, it is up to you to choose the right custodian who is in line with what your goals are and is able to maintain your accounts. It is a requirement for the custodians that they should deposit all of your gold to a third-party depository. It has been made very clear that the investor is not allowed to possess the gold, whether in bullions or coins,and if the investor is found in possession, then they are legible to be taxed fully by the IRS as the IRS will view them as distributors.

Funding Restrictions

When you venture into Gold IRA the first time, you will notice that there are some funding restrictions that you will be subjected to. The maximum amount that you are allowed to place in your IRA account is $5000. This should not worry you as you can increase the amount by steadily increasing your funds. The other option that is available to you is transfer or a roll over. But before you roll over, you should take into consideration the above funding restrictions.

Time Limits

You have invested in IRA and now you want to execute a roll over from your IRA to gold. Before you proceed in doing so, you should know that there are some restrictions that are attached to this action. The first thing that you should know is that you can only execute a roll over within a period of 60 days. If you do not complete the roll over, the IRS will deem it as a withdrawal and thus tax you heavily. Once you begin a roll over, you will be restricted from making any transactions both in the IRA accounts that you are rolling from and to for almost a year.  Thus, I cannot stress enough the importance of being sure that you want to do a roll over before you begin doing one and end up changing your mind during the roll over.

Don’t forget the taxes

You are taxed whenever you make a withdrawal after selling gold. You are also taxed according to the amount of gold that is in your IRA account. Whenever you want to begin a transaction in your rollover IRA account, consider the goals that you had in place before you invested in the IRA. If your initial goal was to realize long term solutions and profit, then it is highly advisable that you leave your gold to sit in its physical form as it will be able to yield more profits. By complying with all of the IRA and IRS rules and regulations, you will be able to realize higher profits in your gold rollovers and thus avoida lot of taxes.

Some expenses to consider

Gold IRA is no doubt a great decision to make but let us remember that everything has some costs attached to it and Gold IRA is no different. An investor faces some fees that must be settled during their time in the Gold IRA.
An investor has to pay a seller’s fee. This is also sometimes known as the mark-up fee. This fee might vary depending on the gold product and the vendor. However, the good news is that this fee is only a one-time fee. So, once you pay it, you are done with it for the whole time that you will be using Gold IRA.
One of the rules of the Federal Law in the Gold IRA business is that every IRA must only be hold by a custodian. Custodians can be financial institutions, a federal insured credit union or any other entity that has been approved by the IRA. The main task of the custodian is to oversee and protect all of the assets that are in their keep. Just like the way that banks or even warehouses charge their customers a fee for their ‘protective service’ is the same way that the investor has to pay the custodian some fee. The custodian fee is different from the seller’s fee as the custodian fees are charged annually. In addition to the ‘protection fees,’ the custodian fee also includes transaction fees.

Critical factors to consider

One of the most important things that you should do is choose the right vendor for your gold rollover. A gold rollover refers to the transfer of gold from a 401(k) account to that of a precious metals IRA account. A standard 401 (k) plan does not have to include the ownership of physical gold but one can own precious metal funds, gold stocks or any other similar paper products. Gold rollover is a very sensitive process. If you choose a wrong vendor, you might end up losing a lot if not all of your investments. Choosing the right vendor will help you stay in your course and protect your assets in the best possible way.
This brings me to the next issue which deals with how an average person who is planning on preparing for investment can be able to distinguish between the good and bad vendors. Truth be told, this is not an easy thing but I will provide you with some key factors that will help you know where to look so that you can avoid making a mistake. The first thing that you should do is check the Better Business Bureau’s profile on a company before you begin doing business with it. This is very important because the Bureau will offer you information on that particular company. It can also provide you with information on other companies or business that will serve as other options should you change your mind. While checking the entity on the Bureau, be sure to check the rating of that particular company, the number of complaints that it has had and the type of complaints that were issued. Also, be sure to see how these complaints were handled, you would not want to invest in a company that does not care about your needs, now would you? If the company in question has had so many complaints, then that should be cause for a red flag and force you to rethink about seeking the services of that vendor. This should be the first step that any investor should take but it is interesting and surprising how many people choose to ignore this step.
There are different Gold investment IRA programs. So sometimes finding the one that is suited for you might take some time. One important thing to consider is to use an entity that has maintained a solid track and has been in the industry for a minimum of ten years. If you come across one that has been in the business for more than fifteen years, then that is even better. Be sure to choose a firm that is serious about keeping you informed and is interesting in not only attending to all of your needs but also one that is keen on answering all of your questions.

Parting shot

Remember that gold is one of the very few commodities that gives you security. In the year 2001, an ounce of gold was being sold for about $271 and ten years later, its price had increased by 700% to $1,896. Gold has proven itself as the best retirement and investment plan as it has withstood the test of time. It has increased in value even when banks collapsed and currencies quivered and plummeted. Gold is now seen as a safe way to invest your money as other financial investments have fallen time and again.
Investing in Gold IRA is a wise choice to make but before you do, make sure that you understand all of the restrictions and rules. Failure to adhere to the set rules and guidance will affect your profit margin greatly and I know that you would not want to see that happen. As a parting remark, be sure that you are in the Gold IRA business for the long-term profits. If you want to make quick and fast money, then this option is not for you. Making roll overs when you are uncertain will land you ina lot of taxes and restrictions, so be patient and look over your strategies wisely before making any sudden moves. Managing highly beneficial gold investment portfolios might seem hard and even impossible at first but once you get the hang of it, you will be on your way to becoming an expert.

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