Diversify your investment portfolio by investing in a gold IRA. This is a great way to combat inflation and protect your wealth. How do you go about setting up this account and purchasing precious metals to include in it?
Choose a Gold IRA Custodian
The first step is to open a self-directed IRA with a custodian that allows gold IRA investments. Look for a reputable company that has experience with gold IRAs and charges reasonable fees. Some of the top gold IRA custodians are companies like Goldco, Augusta Precious Metals, and American Hartford Gold. Visit here to view contact info for these companies.
Fund Your Gold IRA
Once you have the account set up, you need to fund it. You can add money to buy the metals or roll over funds from another qualified retirement account. The IRS doesn’t restrict how much you can contribute, but it does have annual limits in place. These limits are based on your age.
Select Your Physical Gold
The key advantage of a gold IRA is that you get to include physical gold coins and bars rather than just paper assets. Some popular gold coin options are American Gold Eagles, Canadian Maple Leaf’s, and South African Krugerrands. Gold bars are also available in various sizes from reputable mints and refineries like PAMP Suisse and Credit Suisse. Only certain items are permitted in gold IRAS, so ensure the items you purchase can be included in the portfolio.
Place an Order
Once you decide what type of physical gold to buy, place an order through an IRS-approved gold IRA custodian who will act on your behalf. The gold dealer will ship the gold directly to the custodian’s vault. The custodian can advise you on the maximum annual amount of gold you can add to your IRA, which depends on the account value.
Store the Gold in a Secure Vault
For security and IRS compliance reasons, the physical gold you buy for a gold IRA cannot be stored at home. Instead, the gold must be stored in a specialized depository or vault facility approved by the IRS. The gold IRA custodian will have relationships with secure, insured vaults to store the gold safely.
Set Up Regular Contributions
Consider setting up regular gold IRA contributions so you can steadily build the precious metals holdings over time. This dollar cost averaging approach reduces the impact of gold price volatility. Even small monthly contributions add up over many years to help fund your retirement.
Monitor the Gold IRA
The gold IRA custodian will send you regular account statements showing your gold holdings and their changing value over time. The price of gold fluctuates daily based on market forces. The physical gold itself does not generate income, but gains in gold’s market price can grow the IRA value.
Take Distributions When Ready
When you reach age 59 1/2 you can start taking taxable distributions from the gold IRA, just as you would with a traditional IRA. You can request physical delivery of part of the gold holdings or liquidate some of the gold into cash. Physical gold delivery incurs shipping and insurance costs.
Following these steps allows you to integrate physical gold into long-term retirement savings in a tax-advantaged account. Always consult a financial advisor or tax professional to ensure a gold IRA fits your investment strategy.