There are several big pluses to investing in a precious metals IRA that many people point to.
Positives:
One reason people choose a precious metals IRA is because metals are a physical commodity. If you own gold in your IRA, you own a piece of that precious metal. This is opposed to things like a share of stock, which only exists on paper (as the company it is a share of only exists on paper, in the end).
Two, it is a limited commodity. There is not an overabundance of any precious metal in the world. Yes, there is more mined all the time, but the total quantity is not growing at a very rapid rate.
Three, having a small allocation to precious metals like gold and silver is a useful part of diversification.
Negatives:
If you are looking to get rich quickly in precious metals, that ship has sailed. A precious metals IRA is for the long haul (saving for retirement). There may still be value increases, but the rocket ship ride that occurred in precious metals happened already over the past few years, and as a result, if you didn’t own precious metals during that period, you missed the rocket ship.
The huge upwards jump and the many recent roller coaster rises and dips in the values of precious metals clearly demonstrates the biggest flaw in investing in precious metals: they are very volatile investments. For example, jumps of 50% in value in a single year are not unusual over the history of precious metals, nor are drops of 50% in value.
What Types of Metals Are Allowed in an IRA?
- Only gold coins that are legal tender with 0.9999% fineness are allowed in an IRA, except for the American Gold Eagle, which has a fineness of 0.9167% fineness.
- Other gold coins allowed to be put into an IRA include:
- American Buffalo
- Canadian Gold Maple Leaf
- Australian Gold Nugget
- Platinum Maple Leafs & non-proof coins are acceptable
- The popular South African Krugerrand is not permitted to be included in an American IRA because its fineness is only 0.9167%.
- The regulations that govern gold contributions to IRAs call for a minimum purity of only 0.995%, most gold bullion bars are 0.9999% pure.
Examples of Precious Metals That Can Be Held
- Gold
- American Eagle coins
- Australian Kangaroo/Nugget coins
- Austrian Philharmonic coins
- Canadian Maple Leaf coins
- Credit Suisse – Pamp Suisse Bars .999
- U.S. Buffalo Gold Uncirculated coins (no Proofs)
- Bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements
- Silver
- American Eagle coins
- Australian Kookaburra coins
- Canadian Maple Leaf coins
- Mexican Libertad coins
In conclusion, precious metals are another tangible asset many Self-Directed IRA investors love. If you stay away from collectible coins, you will avoid prohibited transactions and you have a wide range of metals to choose from.
To learn more about investing your retirement savings directly into precious metals, give us a call at uDirect IRA Services at (866) 447-6598 or email us at info@uDirectIRA.com
