Investing in gold IRA and opening an account, understanding all the regulations and rules affecting Gold IRA can be very confusing for newbie investors. As you might have realized, the IRS (Internal Revenue Service) has a number of rules to help regulate the type of precious metals or gold to be considered in a gold IRA. To make your transition as hassle free as possible, there are a number of guidelines you need to know.
Gold IRA simple steps
For a precious metal IRA to take place, three steps must be followed. Firstly, precious metal bullion can only be added to an IRA already in existence or on one you have come up with. In case you are yet to have an IRA, a self directed IRA account is a must. In a self-directed IRA, you can choose where you would like your funds invested. Also, you will also be deciding the self-directed IRA account that suits you well; Simple IRA, SEP IRA, Roth IRA or a traditional IRA.
After the IRA has been funded through the company of your choice, the next step is talking to investors to know all the available options on precious metal investment. Advisors give you a bearing on the amount of funds to invest and the precious metals with better returns, security and diversity, closely following your personal requirements. The custodian is then notified on the investment preference you have decided to stick with through signed and filled IDF (Investment Direction Form). After the IDF is approved, you can commence with the process of ordering gold or other precious metals.
It is worth noting that the IRS has disallowed collectible investments such as alcoholic drinks, stamp, coin, antiques, gem or metal, works of art and other physical assets. In turn, many think investments in gold have been disallowed. However, under the USC 26 section 408, lots of gold bullions and coins minted in the U.S. are accepted depending on the fineness and size. Between 1986 and 1998, the only accepted contribution by the IRS was on the American Eagle gold and silver coins and bars. From 1998 to date, the IRS has increased the precious metals accepted including platinum and palladium.
Apart from the fact that the precious metal being invested should not be a collectible, other disallowed coins include those that have gone through certification. Rounds and bars must be manufactured by Comex/Nymex, NYSE, LME, LBMA, a national mint or ISE-9000. For all precious metals, the minimum fineness accepted includes .9995 for Palladium, .99995 for Platinum, .999 for Silver and .995 for Gold.
It is worth remembering you cannot take personal possession of precious metals given that it has been prohibited by the IRS. Storing bullions and coins in your home or safe is not acceptable. An individual metal depository is needed. As you begin the process of investing in a gold IRA and opening an account, keep tabs on the precious metal market to know when to invest or buy more.
Gold is always an attractive way to invest due to its stability, especially if you compare it with more investment options available today, such as fiat currencies, annuities, bonds, stocks and mutual funds.
Mark is a financial advisor who occasionally writes articles on his blog. He recently wrote an article on how investing in Gold IRA could be beneficial for the individual who wants a safe investment. He read an article on bestiracompany.com about some of the best gold IRA companies to invest.