Another reason to convert your IRA to gold is that it offers more flexibility than other retirement accounts. With a traditional IRA, you’re limited to investing in specific types of assets. With a gold IRA, you can invest in physical gold, giving you more control over your retirement savings. The next thing to consider when owning a gold IRA is that gold in and of itself does not make money like a stock or a bond.
Once you’ve filled out the required paperwork and opened your account, you’ll need to fund the account (details below), choose which gold and other metals you want to invest in (only certain are eligible under IRS rules), and then instruct your account manager to buy the metals on your behalf. When making a transfer, your current IRA custodian transfers the money directly to your Gold IRA custodian, and no cash is withdrawn from the account. One important reason not to put all your eggs in the gold basket is that gold can be incredibly volatile. Next Avenue asked the agency about these ads and received the answer: “The IRS cannot comment on the allegations made by a particular IRA promoter, but the agency is warning taxpayers to be wary of anyone who claims that gold in your IRA can be stored at home or in a safe.
We can’t definitely tell you whether or not you should absolutely convert your IRA to a gold IRA. For this reason, even investors who generally prefer gold, such as Russ Kösterich, portfolio manager of the BlackRock Global Allocation Fund, advise you to treat precious metals with the same care as any other physical asset, such as real estate. As with any other IRA, you’ll actually need to sell some of the gold if you want to reap the cash payout on your prudent investment. However, the company’s transaction agreement states that the spread on coins and gold bars sold to IRA customers “was generally between 17 and 33%.
To open a gold IRA, which is technically referred to as a self-directed IRA, you’ll need to find a company that specializes in these types of accounts. But are precious metal IRAs really a wise choice? Next Avenue spoke with pension and investment professionals and found plenty of reasons to be cautious, including high costs, relative volatility, and a mixed investment balance sheet. The company then helps you convert that money into precious metals by selling you gold or silver coins or precious bars. Your representative or IRA manager will arrange the transportation and storage of your gold for you until you’re ready to transport it.
The advantage of gold ETFs is that you can buy and sell stocks just like stocks and hold them in a traditional IRA or 401 (k). No special account is required.
