A gold IRA must be kept separate from a traditional retirement account, although the rules, which include things like contribution limits and distributions, remain the same. Investors can open gold IRAs through a broker-dealer or another custodian bank. If gold seems like a good choice for you, Sentell suggests investing no more than a third of your retirement savings in a gold IRA. To set up a Gold IRA, you’ll need to work with a Gold IRA company to set up an account and buy the precious metals of your choice to
fund it.
Surprisingly, a gold IRA actually doesn’t just have to hold gold, you don’t have to hold any gold in one at all. Given that the stock market typically rises by around 7% in an average year, it would be rare for a gold IRA to outperform other retirement investments. One option is to set up a self-directed gold IRA, which allows you to buy physical gold and silver with pension funds. However, to qualify for gold IRAs, depositaries must be insured, which would protect your investment as long as your account does not exceed the value stated in the accounts by the custodian bank
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Gold IRAs have higher maintenance fees than other types of IRAs, which is due to the additional costs associated with investing in gold. Setting up a checkbook IRA is complicated because you must be a limited liability company (LLC) and have a business current account, to name two of the requirements. A common way to fund a new Gold IRA account is to use funds that are already in another retirement account, such as another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan, in accordance with IRS rules. A key selling point that gold IRA companies like to tout in their marketing is that if you own a gold IRA, you’re holding the physical precious metals
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The Gold IRA firm also sells you the gold bars and coins (or other precious metals) that you want to invest in your Gold IRA. If you already have an IRA or 401 (k), either Regular or Roth, you have the option to convert some or all of your funds into a Gold IRA. If you need advice, you should contact a trusted advisor rather than relying on representatives from the Gold IRA firm. To avoid the possibility of having to pay taxes and penalties, your Gold IRA company can process the transfer on your behalf
.
While you can take out exposure to gold in a normal retirement account by owning stocks or funds, you can’t hold the physical asset in an IRA or a 401 (k). Before you open a Gold IRA, be aware of the regulatory hurdles you’ll need to overcome to ensure that the account doesn’t violate
IRS rules.
