Strategic planning is one key to ensuring a comfortable retirement and maintaining a diverse portfolio is part of the process. For most people, that means opening at least one individual retirement fund (IRA). Traditional IRAs only allow account-holders to invest in securities such as stocks, bonds, and ETFs, so how is it possible to invest in a gold IRA? This article will offer some insight.
Self-Directed IRAs and Gold
The only way to include physical assets like gold in a retirement account is to set up a self-directed IRA. These accounts allow investors to purchase IRS-approved tangible assets, including gold and other precious metals. Banks and traditional brokerages don’t manage self-directed gold IRAs.
Steps to Open a Gold IRA
The process of opening a gold IRA is somewhat different from starting a traditional individual retirement account, but it’s not difficult. Investors can find a top rated resource for gold and other precious investments and open new accounts online. Follow the steps below to get started.
1. Choose a Company
The first step is to find a firm that specializes in gold IRA management. They’ll assist with everything from starting the account and transferring funds to purchasing the metals and ensuring that they get shipped to the right approved storage facility. The company may also be able to act as an account custodian, handling paperwork and IRS compliance.
2. Open an Account
After choosing which company to work with, an investor can start filling out the paperwork to open an account. Gold IRAs can be either traditional or Roth IRAs, so do some research first to determine which will be the best option. To open an account, an investor must provide proof of identification such as a driver’s license or state ID and details about existing retirement accounts if they want to transfer money from 401(k)s or other IRAs.
3. Fund the Account
Once the new account has been opened, investors can fund it. The money placed in the account will be used to purchase precious metals or gold-related assets. The three options for funding the account are:
- Cash contributions, including checks and wire transfers.
- Rollovers from existing retirement accounts.
- Direct account-to-account transfers.
Most investors choose direct transfers. This method for funding accounts minimizes hassles and the potential for costly penalties.
4. Select the Metals
Investors can begin purchasing gold, silver, or other precious metals as soon as the money clears. However, they should note that the IRS has strict regulations about the types and purity of metals that can be held in self-directed IRAs. In some cases, gold IRA firms sell IRS-approved metals, making it easier to purchase bullion or coins.
5. Monitor Performance
Account custodians manage gold IRA investments, but most offer some way for investors to monitor performance. An online dashboard may be available, for example, or regular updates could be provided via the account custodian.
The Importance of a Diversified Retirement Portfolio
Investing in a gold IRA is one of the best ways to diversify a retirement portfolio. Physical assets act as a hedge against inflation and offer protection in the event of a market downturn, so they’re a must-have for anyone who takes saving for retirement seriously. Get the process of investing in a gold IRA started today by contacting a specialist who can help with setting up and funding an account.
