IRA means Individual Retirement Account. This is an account kept by an individual while in active service to be used for investment purposes or other uses after retirement.
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However, the IRA account can also be opened using means of exchange value aside from the traditional national currency – money.
You can sustain an IRA account by converting your cash to purchasing gold. This way, it’s sure of a higher value because gold appreciates.
Also, you keep a gold IRA as a tax advantage as tax is not charged until withdrawal.
The gold to be used in sustaining this IRA account is not just any gold, it’s gold that must meet certain requirements and standards as prescribed by the IRS – a US federal agency that is saddled with the responsibility and duty of collecting taxes. Examples are precious metals, silver, platinum, bullion, bars, etc.
For gold to be eligible for IRA and meet IRS standards, it must be in mint condition with a certificate of authority.
- It must be a source of a government’s national mint and meet certain requirements of finesse quality.
- It must be brilliant and have no visible sign or mark of it being in circulation already.
- It must also meet certain weight specifications.
We also have the traditional gold that can be purchased using the money you may have set aside for tax or using your tax payment.
There is a type of gold account that is funded with tax money and does not give an immediate tax advantage as the investor will begin to pay tax when it comes to taking distributions at retirement.
There is also another gold account meant for small business employees and they are only taxed at withdrawal too.
The conversion of cash to gold can be done through a specialized professional authorized by the IRS to do so.
Having an IRA in gold attracts additional costs which include fees charged by the custodian of the gold, the retirement setup amount, and storage fees.
Storage and charges
Storing your gold for an IRA really has no value of appreciation or investment. because when you are ready to cash out, you cash out on an amount less than the capital used in purchasing the gold in the first place.
You are also expected to pay fees and transaction charges like shipping fees, account maintenance fees, storage fees, and initial setup fees and there is a minimum investment amount.
All these expenses are not required when purchasing gold for non-IRA purposes.
It is also required by law to take out a required minimum distribution of gold (known as RMD) and sell them once the IRA holder turns 72.
If you already have coins or gold before opening a gold IRA, you can’t transfer it to your gold IRA as this is known as a prohibited transaction.
So, it’s not really advisable for someone who is looking for a return on investments.
IRA Gold is not for everyone as there are amount specifications and age limits as well. It also depends on the purpose of your investment whether it’s for long-term or short-term use.