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What is a Precious Metals IRA Rollover?

 

Thanks to the monumental Taxpayer Relief Act of 1997, individuals who held IRAs are able to change their investment instruments to include a better range of investment types within their accounts. This included the addition of physical precious metals to these accounts for the first time ever. Among these newer products were the additions of major gold, silver, and platinum coins such as American Eagles and Canadian Maple Leafs. The passage of this act permitted taxes to be deferred against the major precious metals gold, silver, platinum, and palladium and a number of their bullion coin and bar types as investments.

This means that you are now able to take matters into your very own hands when you open up a self directed IRA account. This way you are able to buy those precious metals coins and bars that qualify. This will immediately protect you from the continuously devaluating dollar for physical tangible and actually owned precious metals. The best part of it all may be that when you feel ready, you can easily obtain physical possession of such precious metals by taking them as distributions in kind from your IRA account. This way, once you are holding the metals in your IRA account, you are able to entirely sidestep any further exposure to the paper U.S. Dollar and any paper assets which are dollar denominated.

In this type of account, all of the major precious metals including silver, gold, platinum, and palladium may be securely held. The only caveat is that they must be either bars or coins that the IRS specifically approves. Without a doubt, gold proves to be the most commonly purchased and held asset in these retirement accounts. Silver comes in as the second most popular, purchased, and held precious metal in Precious Metal IRAs. These precious metals are then utilized by savvy investors to protect themselves from the ravages of inflation and to offer themselves real diversification for their holdings and overall portfolios.

How Do You Set Up A Precious Metals IRA Rollover?

It is only a simple three step process to open up and roll over an existing IRA over to a Precious Metals IRA rollover.:

• In the first step, you must open an account by contacting an administrator company to set up this new Precious Metals IRA. It is important to make sure that such an administrator is a qualified for the precious metals IRA type. A few days after the application is in, the account will be opened up and be ready to fund.

Step two involves working directly with the administrator of the old company that managed your IRA to start the rollover process to get those assets moved over from the existing IRA to the new one.

• Finally, Step Three is to get the IRA fully funded by the transfer and then to analyze the investments which have been moved. There may be paper assets or gold backed paper assets that you want to change into real physical tangible gold, silver, platinum, or palladium coins and bars.

What Types of Metals Can Be Included in A Precious Metals IRA Rollover?

Metals that may be included per the IRS are those which they approved in the categories of gold, silver, platinum, and palladium. The criteria for approval of the bars and coins in each category is as follows:

  • Gold .995+
  • Silver .999+
  • Platinum .9995+
  • Palladium .9995+

What Are the Rules for Storage of Metals in My Precious Metals IRA Rollover?

The IRS is holding all of the cards in respect to the rules for storage of these Precious Metals IRAs. They mandate that each of these various precious metals must be stored according to a rigorous set of exacting standards. There must be a custodian on the account who stores the metals either via their own in-house facilities specially designated and preferably segregated for containing the precious metals, or alternatively they can utilize a third-party, independent depository to store these metals according to the same set of guidelines.

Specifically, owners of the accounts of these Physical Precious Metals IRAs that are rolled over may not hold or possess their own account or its physical precious metals assets. Instead, either a trustee or custodian must possess and store the precious metals bars and coins. The IRS further mandates that such a trustee or custodian must be either a credit union, a bank, a savings and loan association, or another IRS-approved organization which is permitted to perform the functions of either trustee or custodian regarding these precious metals holdings.

Types of Storage Available for Precious Metals IRA Rollovers

Custodians and trustees alike commonly utilize private depositories to store these types of IRAs. There are two main types of storage for these kinds of Precious Metals IRAs. These are segregated storage locations whereby all of your specific assets are kept separate from those of the other investors, or non-segregated storage facilities, where your assets are intermingled with other investors’ assets.

Points to Consider In a Company as a Precious Metals IRA Rollover Account Custodian

There are several factors to consider when choosing a custodian for your Precious Metals IRA rollover account. These are:

Custodian Reputation – Any custodian with whom you choose to trust your precious metals needs to have an impeccable reputation. Check online with either the BBB, Business Consumer Alliance, or TrustLink to confirm these reputations.

• Custodian Products – It is helpful for your new custodian to offer a great variety of applicable precious metals coins and bars products.

• Custodian Experience Level – It is imperative to locate a custodian or administrator company that boasts a vast amount of experience in handling such investments as gold, silver, platinum, and palladium and in delivering high- quality and expert advice on these metals and their various coin and bar products.

• Custodian Fees – It is always a good idea to obtain the list of fees from the custodian and administrator in advance. Hidden fees can be your bane. Beware those custodians who charge a sliding scale based on the values of the assets in the account. Yearly flat rate fees are fair, while percentages of the balance in the account called scaling fees are not. Remember to ask about setup fees, administrative annual fees, and annual storage fees as well.

• Custodian Buyback Programs – Ask if the custodian or administrator company provides a buyback program and if so do they purchase metals back on the same basis at which they sold them.

Custodian Storage Type – It is critical to know if the precious metals will be segregated or non-segregated, as well as at what place the precious metals will be kept and safeguarded.