You have done your research and you are asking yourself if a gold IRA is a right choice for you. Now what?
Right now, you are at an inflection point in which you need to make an important decision that will have a great impact on your financial future. If this is your case, they are some elements that you might want to consider before making a decision.
If you have already done your research, allow us to provide you with some of the elements that we consider important for every person to understand before getting a gold IRA.
Know Your Gold IRA
To begin, you should consider what “gold” stands for in a gold IRA.
While it may surprise you, many people contact gold IRA companies without having a clear understanding of what they will be investing in. In this case, gold refers to the actual physical metal instead of any sort of paper asset like gold stocks, derivatives, etc.
In fact, when talking about gold IRAs, not all gold is made equal as there are many restrictions that apply to if it is to be considered IRA-approved. These requirements are set by the Internal Revenue Service’s Internal Revenue Code, which states that the following are permitted:
- Bullion bars and rounds of gold with a fineness of at least 99.9%
- Gold coins with a fineness level of at least 99.5%. These include:
- American Gold Eagle coin
- Canadian Maple Leaf coin
- Australian Gold Nugget coin
- Australian Gold Kangaroo coin
- American Buffalo
Keep in mind that while gold might be the principal component of some collectible coins, they might not be eligible for being held in a gold IRA.
As such, you always want to make sure that they are eligible before completing the purchase, even if the supplier assures you that they are. If the IRS considers that an improper transaction took place, they might count it as a withdrawal and have you incur penalties.
Another topic we have discussed before is that of fees. Due to the nature of gold, this type of IRA will usually result in additional and higher fees than other types of IRA. In addition to this, many custodians can be quite tricky when it comes to transparency.
You should always make sure you understand what fees exist, and how you will pay them.
These fees could include:
- Account opening fees
- Account maintenance fees
- Selling fees and buying fees
- Storage and transportation fees
- Insurance fees
- Transaction fees
Remember that investing in gold through an IRA is all about financial security and as such, avoiding nesting surprises is a priority. Make sure to ask for all fees charged by the custodian and its partners before opening an account!
You should also consider that investing in gold can be done indirectly through paper assets like stocks, derivatives, ETFs, etc. If you don’t have issues with trusting such assets, you might find them a better option than a gold IRA. However, keep in mind that there is always more risk involved when dealing with that type of asset, especially when speculation is soaring.
Gold IRAs are Simple
Eligibility and fees are two of the things that most investors fail to consider before opening a gold IRA. By knowing them, not only are you more likely to make a better decision but also to have peace of mind in the future and avoid headaches. Now that you know this, you should be ready to open a gold IRA anytime you want!
