The Benefits of Having a Physical Silver IRA




Physical Silver IRA

An Individual Retirement Account is known as an arrangement made in the form of a trust account for taxpayers and/or beneficiaries, or an annuity for individuals purchased through a contract from a life insurance company. There are many types of IRAs, such as the traditional and Roth, SEP, SIMPLE and self-directed. Prior to 2001, the funding was very strict for retirement accounts. Nowadays, the restrictions are much more relaxed and almost all retirement plans and funds can be rolled over into an Individual Retirement Account. Funding usually comes from cash or cash equivalents, which may include assets such as rare coins or baseball card collections. Due to the historical popularity of silver, having a physical Silver IRA is highly advisable.

Silver IRAs are funded by a collection of either physical or non-physical silver. Silver comes second in value to gold and it continues to rise. After 2001’s Economic Growth and Tax Relief Reconciliation Act, relaxed rules on funding made conversion of paper assets into silver and gold possible. The conversion creates a physical precious metals Individual Retirement Account – also considered self-directed, giving the account holder full control over the silver bullion. The silver is limited to American Silver Eagles, Proof Silver American Eagles, Canadian Silver Maple Leafs and Austrian Silver Philharmonic Coins. As for bars, a 10 oz Pamp Suisse, Credit Suisse and the 100 oz Johnson Matthey bar are all acceptable for funding Silver IRAs.

The main benefit of adding silver to a retirement account would be the avoidance of depreciation. Many paper assets depreciate over time while silver’s value has been steadily increasing. Another benefit is that silver is an authentic form of currency and is incapable of being changed by central banks or the government. Silver’s value is also unchanged by the current economic status of the world. In fact, it is one of the few currencies that has flourished – even in the roughest of times, unlike the value of the dollar which has been falling because of the decline of the market.

There are some risks involved with having a precious metals retirement plan. These risks include custodian theft and custodian bankruptcy. With all retirement accounts, the money must be held by a broker who becomes the custodian of the account. Unfortunately, this leaves opportunities for the custodian to cash out accounts and simply vanish. Also, there could be the chance of bankruptcy happening within the company the broker works for. There is also the confiscation risk, which became a fear in early 2012 when the federal government put thought into forcing investors to put their Individual Retirement Accounts toward government bonds.

Although there are both risks and benefits to having a physical Silver IRA, the benefits tend to outweigh the risks in value. Individuals who want to set up a successful retirement fund should look into converting their assets into precious metals to insure that the value of their retirement account increases. And with the risks involved, it is best to do thorough research before initiating any investment plan and background checking the company through which it is handled.