{"id":29502,"date":"2023-07-22T15:00:24","date_gmt":"2023-07-22T22:00:24","guid":{"rendered":"https:\/\/www.advantagegold.com\/?p=29502"},"modified":"2023-07-22T15:00:24","modified_gmt":"2023-07-22T22:00:24","slug":"how-does-a-precious-metals-ira-work","status":"publish","type":"post","link":"https:\/\/www.advantagegold.com\/blog\/how-does-a-precious-metals-ira-work\/","title":{"rendered":"How Does a Precious Metals IRA Work?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">A precious metals IRA works almost exactly like the individual retirement account that you may already have.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The big difference is a precious metals IRA is self-directed\u2014meaning you pick and choose what you want to own\u2014and you can own physical assets, as well as paper assets inside of the plan.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You have control over what you want to own and how much.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Are Precious Metals?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Precious metals are rare metals that have a high economic value.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Rare metals are typically malleable, highly conductive, and non-corrosive. They are essential in the manufacturing process of modern technology, such as solar panels, automobile parts, computers, cell phones, touchpads, and electronics.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Known worldwide for their beauty, precious metals are coveted and used to manufacture the finest jewelry and adornments.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Precious metals are also used as currency. From ancient civilizations until now, mankind has found value in precious metals and has formed its finest coinage from metals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The most popular and widely utilized precious metals are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Silver<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Platinum<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Palladium<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">There are many other metals that are widely used, but aren\u2019t considered precious metals. These include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Steel<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Copper<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Aluminum<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">All have a great value and varied uses, but are not rare in nature or valued intrinsically for their beauty.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is a Precious Metal IRA?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In general, precious metals IRA rules are the same as the rules of traditional, Roth, and Simplified Employee Pension (SEP) IRAs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you already own an IRA, it can be transferred tax-free and penalty-free into a self-directed <a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/\"><strong>precious metals IRA<\/strong><\/a>. While most IRAs are paper asset based, self-directed IRAs allow for ownership of physical assets inside the account.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are age 59 \u00bd and own a 401(k) type of plan, or still have a 401(k) type plan from a previous job, you may roll it over tax-free and penalty-free into a self-directed IRA.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors who ask \u201cHow does a precious metals IRA work?\u201d are typically looking to invest outside of typical stocks, bonds, treasuries, and CDs. They often turn to the precious metals IRA to achieve:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Diversification<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hedge against inflation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tangible asset<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tax-advantaged investing<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Eligible Precious Metals\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The IRS has strict guidelines on the precious metals allowed in an IRA. They ensure items meet specifications for purity, origin, and condition.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Coins must meet minimum fineness criteria, be uncirculated, new, and in perfect physical condition. All coins must come from government mints.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bars and rounds must meet minimum fineness criteria and come from approved manufacturers.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Gold<\/span><\/h3>\n<p><b>Gold<\/b><span style=\"font-weight: 400;\"> must be 99.5% pure. Coins are available in 1\/10, 1\/25, \u00bd, and 1 ounce denominations. Bars are available in varied weights, and smaller bars must weigh exactly as stamped. Popular coins for the Gold IRA include the 1 ounce gold American Eagle from the US Mint, and 1\/25 ounce gold Lynx coin from the Royal Canadian Mint. <\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Silver\u00a0<\/span><\/h3>\n<p><b>Silver <\/b><span style=\"font-weight: 400;\">must be 99.9% pure. Coins are typically \u00bc, \u00bd, 1 oz, and 1 \u00bd ounces. Popular coin choices for a <a href=\"https:\/\/www.advantagegold.com\/blog\/what-is-a-silver-ira\/\"><strong>Silver IRA<\/strong><\/a> are the Royal Canadian Mint\u2019s 1 \u00bd ounce silver Eagle and the 1\/25 ounce silver Lynx.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Platinum<\/span><\/h3>\n<p><b>Platinum<\/b><span style=\"font-weight: 400;\"> bars and coins must be 99.95% pure to be IRA eligible.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Palladium\u00a0<\/span><\/h3>\n<p><b>Palladium<\/b><span style=\"font-weight: 400;\"> bars and coins must be 99.95% pure to be IRA eligible.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Considerations When Purchasing Precious Metals IRA\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">So, how does a precious metals IRA work in your favor?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Simply put, owning precious metals in an IRA is one of the safest ways to own metals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The precious metals IRA rules\u2014enacted by the IRS\u2014ensure that you not only own the finest metals in your retirement account, but that they are safely stored.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are also tax advantages that may be available to you as you diversify your IRA portfolio with gold, silver, platinum, and palladium.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Storage and Security\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Rules require metals that are owned in an IRA to be stored in an approved depository.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Depositories are vaults that must meet IRS standards for storage, accounting, safety, and insurance.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">World-class depositories, approved for safekeeping IRA eligible precious metals, include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Delaware Depository<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Brinks<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">JP Morgan Chase<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">HSBC Bank<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Not only does a depository keep your metals safe and secure, but it carries insurance that protects your investment from loss.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Tax Advantages\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">All IRAs are designed to provide a tax advantage.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Traditional and SEP IRAs are established with pre-taxed funds. The idea is that when you reach the eligible withdrawal age of 59 \u00bd, you will be generating less income than you were when you were younger. <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When withdrawals are made and counted as ordinary income, the assumption is that you will pay less taxes then than you would pay now.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, pre-taxed IRA contributions may be tax-deductible in the year that the contribution is made.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For Roth IRAs, you contribute with after-tax funds.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When eligible withdrawals are made from age 59 \u00bd, the withdrawn funds\u2014 no matter how much they\u2019ve grown\u2014are tax-free.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consult with your tax professional or CPA for more information and to find the right IRA plan for you.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Diversification\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">For true portfolio diversification, it\u2019s smart to invest in different asset classes.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Physical precious metals allow you to own an asset that is non-correlated to the stock market. They are not directly tied to the ups and downs that the collective stock market can experience.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Physical precious metals are referred to as safe-haven assets. Investors often turn to metals to protect their wealth and preserve their buying power as paper-based assets are failing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Owning physical metals also adds a tangible asset to your portfolio. Even while stored in a depository, you can arrange a visit and you can hold your metals in your hands.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Because they have existed and had value throughout history, it is safe to assume that your metals likely won\u2019t go to zero.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Setting Up a Precious Metals IRA\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Setting up a precious metals IRA is easy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A reputable and well-known company, like Advantage Gold, has trained account executives who will walk you through the process.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your assigned professional will ensure you understand the precious metals IRA rules and help you follow them.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Our staff at Advantage Gold will help you:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Decide which type of IRA is right for you<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Complete the short application<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transfer your current IRA\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Roll-over your eligible 401(k) or like plan<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fund your account<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Choose and purchase your metals<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pick a depository<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Be available to answer questions<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Precious Metals IRA Rules\u00a0<\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You may contribute up to $6,500 to your traditional or Roth IRA, per year, up to age 50. After age 50, you may contribute up to $7,500 per year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You may contribute up to $66,000 or 25% of compensation\u2014whichever is less\u2014to an SEP IRA.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With all IRA types, you may withdraw funds without penalty at age 59 \u00bd. If you withdraw earlier, your withdrawal may be subject to a 10% penalty and will immediately be considered earned income.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SEP and traditional plans have required minimum distributions (RMDs) which begin at age 72. Funds must begin to be withdrawn on a yearly basis and tax liability met. Because Roth IRA contributions are made with after-tax funds, withdrawals have no tax liability and there is no RMD requirement.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Setting Up a Precious Metals IRA\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We\u2019ve spent the last decade helping clients like you. At Advantage Gold, we\u2019re experts at the process and our account executives and award-winning IRA team will walk you through it step by step. <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To get started, simply call us or let us know how to best contact you via the link below.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019re happy to help.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A precious metals IRA works almost exactly like the individual retirement account that you may already have.\u00a0 The big difference is a precious metals IRA is self-directed\u2014meaning you pick and choose what you want to own\u2014and you can own physical assets, as well as paper assets inside of the plan.\u00a0 You have control over what [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":30146,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[127],"tags":[],"class_list":["post-29502","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ira"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29502"}],"collection":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/comments?post=29502"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29502\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media\/30146"}],"wp:attachment":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media?parent=29502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/categories?post=29502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/tags?post=29502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}