Are Gold and Silver-Backed IRAs a Good Investment?




Gold And Silver Backed IRAs

It is always a good idea to have your retirement portfolio diversified to minimize the risks. Individual Retirement Accounts provide you with several investment options, and investing in Gold or Silver IRAs is certainly one of them. In recent times, people who depended solely upon “paper stocks” were often made to suffer losses due to fluctuations in the economy, and the resulting volatility of the U.S. Dollar. Precious metal investment plans can indeed provide a viable alternative. This is especially true if it is a long-term investment, which typically are retirement plans in most cases.

Investment in gold and silver-backed IRAs is not exactly the same as investing in physical silver, platinum, palladium or gold. In a way, they still are “paper assets”. They are still a far more stable option when compared to other traditional “paper stock” investments. Here is an examination of some reasons why.

If you set up a self-directed account that allows precious metals, you can invest in physical and non-physical forms of silver, gold or other precious metal products. However, even if you invest in so-called physical “real” silver and gold, you do not actually get to hold them in your hands. Rather, you channel money into your Individual Retirement Account. Diligently select a dealer in valuable metals, and then communicate your selection to your custodian or trustee service. After that, the purchase will be done by the trustee on your behalf with your money. Once the gold or silver bullion (bars, ingots or coins) have been purchased, they will be stored inside vaults of a trusted depository service.

Many people enjoy this process as it saves them from many hassles that are associated with acquiring, transporting, insuring and safekeeping the metals. Here, the account custodian will perform all of the tasks for you for a nominal fee. Also, you must keep in mind that if you decide to close your account, you may not withdraw the metals. The metals will be sold by the custodial company and you will be offered an equivalent amount in cash.

On the flipside as was mentioned earlier, this is not an investment in real “physical” gold, platinum or silver. Although the real metal products are bought by your money, you will not be able to physically touch them or be able to redeem them yourself. The products are also twice removed from you – the legal custodian of the assets is the trust company, and the products are kept stored with another depository service. With that being the case, the money you invest for the purchase is 100 percent tax free since it is an IRA investment. This is a definite advantage over personalized investment on valuable metals. In addition, it saves you the trouble of acquiring and managing the metals yourself.

Why are gold and silver-backed IRAs a good investment? One main advantage is because they are typically self-directed accounts, meaning that you are permitted to invest in other things as well. For example, you may also invest in real estate or stocks, gold exchange-traded funds (ETFs), investment in mining companies and the like. This means that you can diversify your portfolio within the space of a single retirement account. This is another valid reason for the popularity of silver and gold-backed IRAs.