Transferring IRA to Gold


In the time of the decreasing value of the dollar, it may be a good idea of transferring IRA to gold to diversify your life saving and preserve its value. Keep reading.

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Why would you convert an IRA to gold?

Gold IRA is a way of diversifying your retirement portfolio, and it has become more popular since the financial crisis of 2008. By transferring IRA to gold you turn a part of your retirement savings into gold. It is important to check if your existing IRA allows such transfers to gold.

This is an insurance policy against inflation. As you may know, gold prices per ounce were around $255 in September 1999, and as of the moment of writing this text they are around $1826. This is an increase by a factor 7.

However, it is fair to stress that it all depends on which period you take into account. You realize this from the graph available on Wikipedia. The peak which you see on the left is caused by the Soviet invasion of Afghanistan, or it is perhaps the result of the 1970s oil crisis and years of high inflation, it may be both.

Gold value in the past half a century.
Gold value in the past half a century.

You can convert an IRA to gold legally based on the decision by Congress in 1997. There are some rules to follow though.

  • The precious metal coins or bars must meet IRS fineness standards.
  • They must be held by the IRA trustee instead of the IRA owner, stored in an IRS-approved depository.
  • All other standard rules apply, about IRA contributions, disbursements, and taxes.

How do you buy gold in an IRA?

So you have to establish a self-directed IRA. If you are new to this, it may be very convenient to have a broker to buy the gold, and an approved custodian to create and administer the account and store or hold your actual bullion.

Brokers may recommend an IRA custodian but you are always free to search for a custodian that suits you best. Regarding brokers, I would recommend the following because of their transparency and high rating by customers:

Note also that I use the word ‘gold’ most of the time simply because it is the most popular. But in fact, this is about precious metals. So you can own physical gold, silver, platinum, and palladium. Investors with gold IRAs can hold physical metals such as bullion or coins.

I mentioned transparency, so it is essential that you know all your costs upfront to avoid any unpleasant surprises regarding hidden fees, etc. This is why at Augusta you will have a detailed interview and they will inform you about every step, so you will know at any point what you are doing and why. Their approach is educational and not pushing a hard sell, this is why they have zero complaints by their customers.

The mentioned costs and charges may include markups depending upon whether you want gold bullion or coins, and this is a one-time fee. Retirement account setup is also a one-time fee charged to establish your new IRA account. Custodian storage fee is charged by your chosen qualified storage facility. There may be cash-out costs if you want to close out a gold IRA and sell your gold to a third-party dealer. But as mentioned above, you will be informed in detail before you make any step.

Are there risks in transferring IRA to gold?

Because nobody can predict the future, there are risks in everything we do, and this includes gold as well. Traditional IRAs have risks too. The gold price may go up and down (you have seen the chart given above), but it is the general trend that one should bear in mind.

This is about the precious metals that have thousands of years of history, and gold and silver have a proven record of being a true store value. While the value of the dollar steadily goes down, the situation with precious metals is just the other way round.

But even if the gold value temporarily changes its direction, this may not necessarily be the same with your other assets. This is why diversification is so important.

The bottom line is, investing in gold for IRA is legal, and it is becoming increasingly popular. It is best to consult a financial advisor and then decide how much to invest in your Gold IRA.

Typically you will see suggestions not to go over 1/3 of your total retirement fund, but some put this limit even lower. So get in touch with the brokers mentioned above, see what they recommend, and then decide yourself.

Thank you for reading. Let me know if you have questions or comments, there is a comment box below.


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