A Gold IRA is an Individual Retirement Account that consists of a portfolio that’s made up of precious metals. The Treasury Department states that “any natural person (including any individual, partnership, trust, estate, or corporation) who is a citizen or resident of the United States may establish an IRA.” Essentially this means you can invest in precious metals such as gold and silver as part of your IRA as long as you follow the rules and regulations set by the IRS to do so. In fact, only physical gold and silver can be held in an IRA. Any other investment, such as a stock or bond, would not be allowed because IRAs are limited to physical materials.
How to Set up a Gold IRA;
1. Determine how much you wish to invest in your IRA
The first step to setting up a gold IRA is determining how much gold or silver you need for your investment plan. You can set up an IRA with as little as $1,000. However, you can also utilize the full $5,500 annual contribution limit if you wish. The money is then held in the gold metal and not converted into stocks or bonds. In order to withdraw the funds from your IRA, then they have to be liquidated into another investment.
2. Register your IRA with the court.
After you decide how much money you want to invest into your IRA, ensure that the gold or silver will be held by a qualified custodian. Then register your IRA with the IRS by filing Form 8606. When you have completed step one and two, you’ll then be able to rollover gold and silver into your new IRA account (unless you are using a company that can actually store your precious metals for you.)
3. Create a written record of your gold or silver ownership.
After you’ve completed the steps above, you’ll want to create a detailed record of all your gold and silver holdings. This will account for every coin you have in your possession and how much you own in total. You can use this document as evidence that you own these bars, should any law enforcement officials question you about the legality of these metals when asked. The records can be kept at an attorney’s office or accountant’s office.
4. Take your precious metals to a licensed assay office.
Once you have registered your IRA with the IRS, then you’ll want to take any gold or silver bullion that you own over to a licensed assay office and have it weighed and stamped so that it can be held in a safe deposit box or vault. You will also need to declare, in writing, the amount of gold and silver that you are storing with the IRS on form 8606, which we mentioned above. This will be used for the purpose of reporting.
5. Purchase an IRA custodian.
After you have registered your IRA with the IRS and taken your gold or silver to a licensed assay office where it is weighed and stamped, then you can select a qualified custodian that holds these metals in trust for you. It’s important to note that you cannot keep your IRA metals in a safe deposit box or vault. They need to be held in the account of a custodian for safety reasons. We have access to the best gold IRA companies of 2023 if interested.
6. Select an investment plan that fits your needs;
There are many options when it comes to gold and silver IRAs. There are companies that allow you to actually store your metals in their facilities. These include SteelPadlock.com, Scotia Mocatta, and APMEX. However, this isn’t necessary because your IRA custodian can store the metals for you just as well if you decide to go this route.
It’s also important to note that there are companies that sell gold and silver coins in bulk so those who wish to purchase gold and silver bullion can do so without having to purchase individual bars or coins.
Why should I have one?
There are numerous reasons why you should have a Gold IRA set up for yourself, including:
You can avoid taxes – When you have any type of investment that grows tax deferred in an IRA, you can avoid paying taxes on the portion of your gains that aren’t withdrawn until retirement. This way, you can accumulate wealth without having to pay taxes on a portion of your earnings.