If you have a retirement account, you’ve probably heard about the wide variety of potential investments available for it — everything from conventional IRAs with their mutual funds, stocks, and bonds to alternative investments like real estate investment trusts, digital currencies, antiques, and more.
So what about buying gold and other precious metals? If you’ve been wondering about adding this alternative asset to your retirement planning, join the club — the growing number of people setting up Gold IRAs as part of their Precious Metals IRA.
What is a Self-Directed IRA (SDIRA)?
A self-directed IRA is an alternative investment method for retirement offered by some financial institutions where you get to choose the assets and investments included in your IRA. An SDIRA supports alternative investments, or the many options we listed above that aren’t part of the usual mix of mutual funds, stocks, and bonds. This could open up IRAs to potentially more successful or more nuanced performance.
Individuals wanting to select from this larger pool of assets get to pick what they buy for themselves, instead of relying on the limited options directed by their financial institution.
How does an SDIRA compare to conventional IRAs?
A financial institution can help them organize their holdings, but the individual takes the central role in managing a self-directed IRA. In return for broader investment opportunities, SDIRA owners make the investment decisions related to their accounts themselves.
So, to diversify retirement investments beyond traditional opportunities and into assets like gold and other precious metals, you’ll have to open a self-directed IRA. You can then start to build your SDIRA by moving eligible assets from existing retirement accounts.
When you open an SDIRA, you don’t have to move all of your retirement savings to alternative assets. You always have the option of leaving some funds invested in conventional assets like stocks, bonds, ETFs, and mutual funds.
Moving Assets to an SDIRA
How does the average person go from their existing retirement accounts into a self-directed IRA? Your Birch Gold Precious Metals Specialist will help here, making the process as smooth as possible.
Most commonly, people resort to 401(k) rollovers and IRA transfers. There can also be rollovers from other employer-sponsored retirement accounts, such as a 403(b), TSP, 457, and so forth.
Transfers versus rollovers
A transfer moves funds between retirement accounts of the same type, like between two IRAs. On the other hand, a rollover takes funds from one retirement account type to another. You can roll over several accounts into another one, blending different types of accounts together; and, with a rollover, the tax-deferred status of your assets can be preserved.
Why Consider Investing in a Gold IRA?
Now that you’ve seen some of the nuts and bolts behind SDIRAs, let’s look at placing some of your funds into a Gold IRA. Why might you want to do this?
Historically, gold has shown a remarkable ability to retain its value, and so many people turn to the metal in times of inflation, recession, and other types of uncertainty. There are a few specific points to consider that can make gold a compelling choice:
- Gold prices often go up when conventional assets go down – Since gold’s value usually moves in the opposite direction of stocks, bonds, and other paper assets, it can be a strong choice to round out retirement funds and protect you from inflation. If stock markets and mutual funds are facing difficulty, gold is usually faring well, allowing individuals to hedge their losses.
- Portfolio diversification absorbs market fluctuation – Portfolio risk management is a hot topic, as every individual hopes to maximize the value of their retirement savings. One key tool many investors use for lowering risk is diversification since it reduces the overall negative impact of any single asset’s decline in performance. Purchasing gold in your IRA can help diversify, particularly if done alongside other precious metals.
Frequently Asked Questions
How do you open a Gold IRA? What are the mechanics of a Gold IRA rollover?
We’ve made the process of opening a Gold IRA simple, with several easy-to-handle steps and a Precious Metals Specialist on hand to help answer any questions you might have along the way.
1. Open your account.
This part actually has two steps to it.
a. Set up an account with your new custodian. A custodian is a fancy way of referring to the financial institution that is responsible for storing the assets in your account, although a custodian’s specific level of involvement depends on the asset being stored.
With Gold IRAs, the custodian holds the paperwork for your account while an approved depository physically stores the gold for you. The IRS actually requires all retirement plans to be managed by a custodian, with this being a necessary step to maintain tax-deferred status.
Here at Birch Gold Group, we work with custodians who specialize in Precious Metals IRAs — including Gold IRAs. We most frequently use Equity Trust Company and STRATA Trust Company. All custodians with whom we work are held to Birch Gold’s highest standards, and we only elect to work with those who also maintain A+ ratings from the Better Business Bureau.
b. Transfer funds from an existing account. Just as with a conventional IRA, you can move the funds from your retirement account to a Gold IRA with no tax penalties. With Birch Gold Group, you will have an IRA Specialist assigned to you to help you through the entire process of transfer or rollover.
The following accounts are eligible to be rolled over into a Gold IRA:
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
- Eligible 401(k), 403(b), 457, TSP, and more
This process generally takes anywhere from one to three weeks to complete. This timing is mostly dependent on the custodian of your prior account(s), and how quickly they process their paperwork. Also, please remember that the minimum amount to start a Gold IRA account with Birch Gold Group is $10,000.
2. Select your precious metals.
This particular article is focused on gold. Many people hear about Gold IRAs first, even though other options exist for Precious Metals IRAs — including silver, platinum, and palladium.
After all, gold is one of the oldest precious metals in use, with a long history of maintaining value. This metal has been used in everything from currency through jewelry, from ancient times through to the present. This enduring legacy makes it a very popular option and potential starting point for a Precious Metals IRA — after all, no one is surprised to hear that gold is regarded as valuable.
However, there are actually four precious metals (gold, silver, platinum, and palladium) that are eligible to become a part of your IRA, although you will need to be mindful of the IRS’ criteria for what types of products can be placed in your retirement account. Your designated Precious Metals Specialist will review your options with you so that you can make the best decision for your retirement account.
3. Purchase your gold!
This is the easiest part. Say the word (to your Precious Metals Specialist), and they will set the process in motion.
First, your Specialist will take you through a consultation on all of the products available to you, including the pros and cons of each. Once you have had a chance to ask any questions that you have and are comfortable with your level of knowledge, you can confirm the gold — and any other metals — that you wish to buy. Finally, your Precious Metals Specialist will handle the process of confirming the purchase.
But now that you own gold in an IRA, there are two more “steps” to take into consideration.
4. Store your gold.
Your precious metals — including your gold — will be held safely and securely at an approved depository.
Birch Gold usually works with Delaware Depository, the nation’s largest precious metals depository, and Brinks Global Services, a leading world provider of secure logistics and storage solutions.
5. Keep an eye on things.
You can always feel free to reach out to your Specialist with any questions you might have about your Gold IRA.
In fact, the best way to know what’s going on with your IRA – and find peace of mind in your retirement account — is to connect directly with your Precious Metals Specialist. They will always be able to get back to you with an up-to-date buyback quote, which will be both more detailed and more accurate than the statements sent by your custodian.
What are the fees for your new Gold IRA?
With our team’s collective background in finance and precious metals, we’ve seen many IRAs. We find that a minimum of $10,000 is needed to really get started with your retirement savings through a Precious Metals IRA with Birch Gold.
This is the best way to enjoy the complete flexibility in choice of assets while also receiving direct, one-on-one service from a Precious Metals Specialist throughout the entire process.
There are some specific fees that are associated with custodians and depositories, and so you can usually expect the following:
- Account Set Up Fee: $50
- Wire Transfer Fee: $30
- Storage/Insurance: $100
- Management Fees: $80
On new accounts of more than $50,000, Birch Gold will pay your first year’s fees.
What gold is IRA approved?
(.995 minimum fineness, except for the American Eagle)
– American Eagle Coins (Bullion & Proof)
– American Buffalo Uncirculated Coins
– Canadian Maple Leaf Coins
– Austrian Philharmonic Coins
– Australian Nugget / Kangaroo Coins
– Gold Twin Maples Coins
– Australian Gold Florin
– Gold Rose Crown Guinea
– Valcambi CombiBars
– Gold bars and rounds from approved mints & refiners
With a Gold IRA, do you own the physical precious metals?
Yes! You own the gold and other precious metals in your Gold IRA.
Working with us will also mean working in conjunction with a custodian (who will handle paperwork) and a depository, where the gold will be stored securely and insured. The depository recognizes you as the sole owner and titleholder of the metals you store with them.
If you choose to close out your precious metals retirement account, you can even opt for an in-kind distribution, which will give you the actual precious metal straight from your account.
What sorts of tax benefits will I see by investing in gold through an IRA?
The best source for a complete picture of the tax benefits behind your individual retirement account is a tax professional.
However, you might want to go in with the general knowledge that tax benefits vary based on the retirement account type. Generally, either contributions are tax-deferred (such as with a Traditional IRA, SEP-IRA, SIMPLE IRA, etc.) or the distributions are tax-free (such as with a Roth IRA or Roth 401k).
Additionally, in either case, any earnings are tax-deferred as long as assets are held within the umbrella of the IRA.
It is always best to confirm these details directly with a tax professional, particularly since they can examine your specific situation.
Is there a good time to rollover your retirement account?
Do you wonder if you should time your rollover based on trends like the price of gold or even fluctuations in the value of the dollar?
When it comes to questions about retirement account rollovers, choosing investment approaches, or predicting likely outcomes, everyone’s account situation is different. Only you can decide when is the best time to buy, sell, or change your Precious Metals IRA assets. To get financial counseling, you’ll have to ask your accountant, tax lawyer, or tax advisor.
However, for answers to standard questions about your investment options and procedures, remember that you have an ace up your sleeve. When you sign up for a Precious Metals IRA with Birch Gold Group, a Precious Metals Specialist is assigned to you. He or she is trained — and motivated — to walk you through your options and give you information that’s clear and easy to understand and use.
When you want to build your retirement savings or ask a question about your IRA, call 800-355-2116 to get in touch with your Precious Metals Specialist.