We receive many inquiries each day about precious metals IRAs. The most common ones are listed below. However, if you have any questions that you don't see here, feel free to call our IRA Hotline at 888.952.4508.
Are gold IRAs wise investments?
More properly called "precious metals IRAs" because they can hold gold, silver, platinum, or palladium, gold IRAs can be a wise way to protect your long-term wealth and assures you of a reliable, liquid, physical form of assets that unlike stocks, bonds or mutual funds can never result in a zero balance. Stocks, bonds, real estate, mutual funds, and other possible components of self-directed IRAs all have the potential to become worthless. Precious metals, particularly gold and silver, do not.
How do precious metals IRAs work?
If you are familiar with traditional IRAs, you already know most of the details about how self-directed IRAs operate. That's because nearly all the IRS guidelines that apply to standard Roth and non-Roth IRAs also apply to self-directed ones, which are the types of IRAs that are allowed to contain precious metals.
The account holder must have a trustee to manage their account. Then you, as the account holder, must find a dealer/broker like LCR Coins, to sell you the metals you wish to deposit. Those metals, after you buy them, must be physically transported to an IRA-approved depository for safekeeping by a custodian. The account trustee manages the investments in the account according to your directions.
Can I take possession of gold in my IRA?
Legally speaking, you can certainly take physical possession of the assets in your precious metals IRA anytime you wish. This is strongly discouraged, because once possession is transferred to you, you are responsible for tax on the withdrawal as if you received ordinary income. We encourage you to speak with your personal tax advisor to understand exactly how a metals withdrawal will affect your tax status.
Which precious metals can I hold in an IRA?
IRS rules are very strict in this regard. As for the four primary precious metals - gold, silver, platinum, and palladium - you can hold as many of each kind in any amounts. The restrictions pertain to purity and there detailed lists about exceptions to the purity rules, but account holders are required to own precious metals of 99.9% purity into their IRAs.
Is conversion tax-free?
Yes. Converting your traditional IRA into a gold one is a non-taxable event. You need to be sure to use an IRA Trustee to accomplish the transfer. If you try to do the transfer by yourself, there's a possibility that you might accidentally "take possession" of the funds from your traditional IRA before you deposit them into the new one. If that happens, you could be liable for a hefty 10 percent penalty as well as the amount of ordinary income tax on the total amount. Using a professional IRA Trustee can help you avoid that dilemma. In any case, when you convert one IRA into another, and the process is done correctly, there's no tax liability whatsoever.
Can anyone learn how to start a gold IRA?
Starting a precious metals IRA is simple. There's really nothing you must learn to get started. Once you engage a reputable broker like LCR Coin, you'll be guided through the rest of the process seamlessly.
Once your GOLD IRA is opened, you'll want to take advantage of all the educational resources offered by LCR Coin to learn more about using precious metals, particularly gold and silver, to enhance your long-term wealth, diversify your portfolio and function as a hedge against inflation.
What are the most common kinds of precious metals investments?
Gold and silver top the list for the vast majority of investors who have Precious Metal IRAs and other precious metals investments besides their GOLD IRA. LCR Coin's website includes detailed listings of IRA-approved gold and silver products. In most cases, U.S.-minted bullion coins in both silver and gold are acceptable to place into an IRA, as are many Canadian bullion coins. There are a few exceptions, and a purity of 99.9 percent is always the minimum on eligible metals, whether they're gold, silver, platinum, or palladium.
Can I have more than one IRA?
You can have as many IRAs as you like. The thing to remember is that you are still limited by the amount you can deposit into all of them, combined, each year. That ceiling amount is based on IRS regulations for different tax-filing statuses. Typically, it's $6,000 per person for people under the age of 50, and $7,000 per person for those 50 and older.
For the sake of simple record-keeping, most people don't maintain and track their investments in multiple IRAs. On average, people tend to have just one or two accounts. For example, you could maintain a traditional IRA at your local bank and have a precious metals IRA for the sole purpose of accumulating gold and silver, and for diversifying your total IRA portfolio.
What is the ideal age at which I should start an IRA?
Most financial advisors will tell you, "The earlier, the better." The beauty of starting in your 20's, to 40's is that you can max out each year's contribution limits and build a substantial base amount within just a few years.
Even if you wait until later, after the age of 50, the "catch-up" provision in the law works to your advantage. You may have noticed that people over 50 are allowed to contribute and extra $1,000 per person to their IRAs, regardless of which kind of account it is, traditional, Roth, or a GOLD IRA account.
If my IRA includes physical gold, can it be a Roth IRA?
Yes, you can set up your precious metals, self-directed IRA to be of either the Roth or non-Roth variety. Generally, when you place gold or silver into a Roth self-directed IRA, you use funds that you have already paid tax and for which you did not take a deduction on your annual tax filing.
For non-Roth IRAs, you deposit metals up to your annual contribution limit, and then can deduct that amount from your income when it's time to file. The big difference is that with a Roth IRA, you will not pay tax even upon withdrawals of the funds or the accumulated interest. With a non-Roth IRA, you will pay tax on the withdrawals at your ordinary personal rate when you take the money out.
How does a GOLD IRA differ from a gold ETF?
There are many differences, primarily that an ETF (exchange-traded fund) is simply a paper investment on which you must pay tax on any gains. There's no tax advantage to owning an ETF as opposed to an IRA. However, it's possible to own shares of a metal-backed ETF within a self-directed IRA. Still, gold IRAs have an advantage because an ETF is only a paper version of the metal, not in physical form.
If the ETF goes out of business, files for bankruptcy, or simply drops to a very low market value, you could lose most or all of your investment. Worse still, you'd be left with no physical metals as security, just a semi-worthless piece of paper.
If I already own gold or silver, can I place it in my precious metals IRA?
The IRS says you can't ever place your already own metals into GOLD IRAs. Whichever precious metals you do put in must be purchased directly from a dealer and shipped to the custodian.
Are precious metals IRAs insured in any way?
When you purchase precious metals from a broker, like LCR Coin for example, and store the bullion in an IRS-approved vault, your assets are typically insured against theft, loss, or damage to the metals in exchange for the annual storage fee you pay to the custodian, who store your metal.
Why can't I store the gold myself and cover it with insurance?
This is one of the most frequent questions we get about gold IRAs. In fact, you can buy all the precious metals you wish, store them in your home or safe deposit box, purchase theft insurance, and do whatever you want with them.
The big catch is that you will pay taxes on the annual appreciation, in price - the gains on sales of the metals and will not be able to call your holdings an "IRA." The reason is because the IRA laws were written to exclude personal holding of precious metals from the tax advantages of IRAs. Basically, to have a self-directed precious metals IRA, you need three things: a broker to buy the metals from, a trustee to oversee the account administration, and a custodian to hold the metals in a secure location.
Trustees and custodians must be on an IRS-approved list.
Bottom line: No, you cannot have physical possession of the metals in a self-directed IRA. Once you take personal possession of the metals that are in an IRA, you are liable for either capital gains on the withdrawal or ordinary income tax on the amount.
Additionally, you could be hit with a flat 10 percent penalty on however much you take out.
If I currently don't have an IRA, can I open a gold retirement account?
Of course. Precious metals IRAs welcome two kinds of customers. One, anyone who wants to roll over their current IRA into a precious metals IRA. Two, people who are opening an IRA account for the first time ever, a group which usually includes younger people and a few older folks who are catching up on their savings goals.
If I already have a 403b, a TSP, a traditional IRA, or a 401k through my employer, can I convert it to a gold retirement account?
Yes, and the process is amazingly simple when you use a qualified, experienced metals broker to start the process. Brokers work with trustees, who will actually be administering and overseeing the account.
So, when you contact a broker and explain that you want a precious metals IRA, you'll be walked through the conversion process to transfer the assets in your current account into the self-directed, metals-backed IRA.
Roll overs are common kinds of transactions, and the paperwork is not a problem if you have a broker and trustee who are willing to take you through the enrollment and do the paperwork for you.
What are the fees and other costs associated with precious metals IRAs?
For the most part, you sometimes pay a fee to the trustee to set up your account, as well as an annual fee for account maintenance. Additionally, there are annual fees for storage of the metals at a secure location, and shipment of metals from the broker/dealer to the custodian.
Depending on the metals dealer, trustee, and custodian you choose to work with, fees can be higher or lower.
It's almost always to your advantage to work with a metals dealer like LCR Coin that already has an established relationship with approved trustees and custodians. The process moves along much more smoothly, and fees are kept to a bare minimum.
Will LCR Coin be my IRA custodian?
You'll hear lots of new terminology when you open a precious metals IRA. Sometimes, people use the same words to mean different things, so it's important to be careful about definitions.
Generally, the "dealer" or "broker" is the precious metals dealer who sells bullion to buyers who want to start gold IRAs. The "trustee" is the bank or other kind of financial institution that administers the account, keeps all the records, and files all the necessary paperwork. The "custodian" is the organization that operates a secure facility, often called a vault, where your metals are stored.
If you choose to work with LCR Coin to set up a self-directed IRA, we'll technically be the dealer or broker who sells the metals to you.
We have long-term relationships with a designated, reputable trustee and with two different storage facilities. This combination of resources makes it easy for our clients to set up gold IRAs quickly and seamlessly, and without unnecessary fees.
Are there any dollar-amount minimums for opening this kind of IRA?
Each dealer and trustee can set minimum opening balances for precious metals IRA accounts under their purview. If you want to open an account, speak with an LCR Coin representative to learn the details about specific account minimums.