Diversify your Retirement Savings with Silver: Buy Coins and Rounds in Your Precious Metals IRA
Buying silver in your IRA could let you access its safe-haven properties, and its ability to maintain or even climb in value during an economic downturn. In addition to its history of use in jewelry and currency, silver has major industrial applications that have protected its value over time.
Like gold, silver for investment purposes comes in many different shapes and sizes. It can be helpful to learn about the forms of silver (bars, coins, rounds) and even the types of coins offered (bullion, numismatic, and proofs).
And just like with gold coins and rounds, if you are buying silver within a Precious Metals IRA, you will need to pick coins or rounds that meet the eligibility requirements laid out in IRS code.
In the sections below, we will explore the various types of silver coins and rounds that are available.
What are the different types of silver coins? How is a round different?
Minting a coin or round—which is the specialized term for manufacturing it—is no easy feat, requiring dedicated guidelines and facilities. Coins and rounds not only need to be stamped with an image, but also finished to the highest standards so that they maintain their value. Depending on their type, the trade value of these coin assets can depend on their condition.
The facilities responsible for coin and round production are called “mints.” Public mints are run by the government, such as the United States Mint; in addition to minting silver coins, they also handle the production of circulating currency. There are also reputable private mints, which are responsible for minting silver rounds and bars.
Curious about what exactly happens when a coin or round is minted? The video below gives a high-level overview off how the US Mint manufacturers circulating silver.
As seen with gold, silver coins may come in three basic types: bullion (which also lends itself to rounds), numismatic, and proof. Let’s look at each in turn, as well as where rounds come into the picture.
Bullion Coins and Bullion Rounds
Bullion coins are primarily designed and owned to represent a close value of the underlying spot price of their metals, deriving their value from their metal content or weight. Unlike other types of coins, bullion is primarily seen as a store of wealth and its value is primarily derived from its silver content.
Bullion may be minted and backed by the government in the form of bullion coins, or by private mints in the form of bullion rounds. One example of a popular bullion coin is the Silver American Eagle. Since their inception in 1986, the Silver American Eagle has been minted by the U.S. Mint.
As you consider buying precious metals in your IRA, you may look to bullion coins and rounds as an option. They may be placed in your retirement account as long as they meet the eligibility requirements in IRS code. This is something that your Precious Metals Specialist can help walk you through.
When you hear about the coins acquired by collectors, you probably are thinking about numismatic coins, although investors also show an interest in these coins. Like bullion coins, numismatic ones carry wealth-protection and price appreciation properties.
However, this kind of coin can carry price movements beyond the spot price of its metal, since its value is defined not just by its silver content but also its scarcity and condition. Silver coins of the same fineness and weight, when melted down, carry a specific value known as their “intrinsic value.” But different mints, rarities, and importance to collections can give certain coins a higher premium than other ones via “extrinsic value.”
Numismatic silver coins date back from before 1965, when the Coinage Act was passed and began to remove silver from circulation.
Proof coins, or semi-numismatic coins, are usually produced in small batches and were originally intended to check the dies, or parts used to shape the coins.
Over time, they have grown into assets of their own, drawing interest from collectors and investors alike. Minted as collectibles, the premium associated with proof coins can vary, from substantially above spot prices to low enough over spot prices to be comparable to bullion. That’s why proof coins are considered semi-numismatic.
These proof coins are usually minted with a date stamp. They tend to have some distinctive physical features, with a mirrored background and a frosted foreground. They also can be commemorative.
The U.S. Mint backs a version of its popular American Eagle series in silver proof form. The Silver American Eagle proof has been minted every year since 1986, with the exception of 2009, when no silver proofs were minted.
Why would I choose to store my silver as a coin or round?
As you add precious metals to your savings portfolio, keep in mind how each metal may perform differently. Gold and silver can both offer great volatility protection when other asset classes like stocks and currencies fluctuate. But silver prices tend to be more volatile than gold. To try and leverage this, many people choose to diversify the types of metals they buy.
Silver coins and rounds can offer several advantages as assets in retirement savings.
- Brand Recognition – Popular coins and rounds develop a bit of a following, which increases demand and could make it easier not just to sell, but at a good price.
- Liquidity – Given its intrinsic worth as well as its industrial applications, there is an active market for buying and selling silver. Coins and rounds can be easier to transact with than other forms because their individual units are smaller yet tangible.
- Privacy – Given the increased flexibility in the size and scale of transactions involving coins and rounds, these purchases and sales are generally regarded as more private.
- Counterfeit Protection – Birch Gold Group only works with reputable mints and secure depositories. These direct relationships protect your retirement savings, but generally speaking precious metals are susceptible to counterfeiting. Over just the last few years, silver counterfeiting rings have begun to pop up in China. While coins and rounds are susceptible, they do offer a bit more protection than bars, depending on their mint. The US Mint is even considering incorporating security devices into future coins.
- Transport and Fees – When purchasing silver within an IRA, you don’t really face this concern. Generally speaking, it’s easier to transport coins and rounds than bars, to travel with them, and to have them accepted through customs.
What determines which silver coins and rounds are IRA eligible?
Not all silver coins and rounds are created equally. Different purities, sizes, mintages, and market liquidities are all factors to consider. Of course, the IRS has its own rules as well. After all, for you to enjoy the tax incentives benefits of an IRA, you’ll have to play by the government’s rules.
According to the IRS code: to be eligible for placement into an IRA, silver coins and rounds need to have a 99.9% purity, or .999 fineness. Contrast this with gold, which needs to have 99.5% purity (with the sole exception of the Gold American Eagle).
For Birch Gold’s list of eligible silver coins and rounds, please see below:
As always, your Precious Metals Specialist is here for you and can review your list of options for silver to place in your IRA.
Silver can be a valuable tool to building and protecting your savings, especially inside of a precious metals IRA.
Your Precious Metals Specialist can walk you through your options for buying silver. They can also help you through the steps you’ll need to take to set up and maintain a precious metals IRA with silver, gold, platinum, and palladium.