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What is a Silver IRA

Silver IRAs Description

It can come as a surprise to people to learn that silver has the greatest demand and most applications of the various precious metals. There are even hundreds of industrial applications for silver, ranging from electrical wires, to jewelry, to medical devices, to silverware. When precious metals make a move higher, silver is the one has the greatest chance of making the largest percentage gain. Combine this with its age old appeal as a safe haven precious metal and it helps to explain why it has always been a good choice for savings towards retirement. This is where Silver IRAs come into the picture.

Silver IRAs are special self-directed IRA accounts that give you the opportunity and ability to hold certain forms of bullion silver within them rather than the usual paper kinds of investments and forms of silver. This capability sets silver IRAs apart from the traditional forms that usually are comprised of mutual funds, stocks, and bonds. The weakness in these traditional IRAs is that these types of investments are all dollar denominated, meaning that as the dollar goes down, the values of these investments decline as well. This risk is in addition to the possibility of such paper investment stocks and bonds declining on their own. The dollar can be and is often manipulated in value to suit the will of the central bankers and policy makers, which can hurt your retirement prospects over the long term. The good news about a silver IRA is that when you hold this metal tangibly, no one is able to create new supplies of silver on a computer screen or to deceptively inflate away its value.  Regardless of how the dollar performs over time, you will be able to sell your tangible silver possessions at the international price for silver. This means that if the dollar takes a significant tumble, you will receive more dollars for your silver when you sell it.

Silver IRAs Process

Opening up a silver IRA is not any more difficult than establishing a regular kind of IRA. Among the main differences between Silver IRAs and other traditional types of these accounts is that you are able to hold silver and other precious metals within these accounts, provided that you acquire and store them by the IRA rules set out by the IRS. It is important to realize that most kinds of IRAs can not hold physical silver. This makes it essential to talk to the IRA administrator which you are considering to make sure that they work with Silver IRAs so that you do not have any problems once you open up the new IRA or rollover your existing IRA to a new Silver IRA.

Whether you are setting up a new IRA or rolling over an existing one to a new one, you will have to create the account with a Silver IRA administrator. After you have done this, you can pick out the types of silver coins or bars that you wish to have in the new account. IRS rules do not permit every silver coin or bar on the market to be obtained for these accounts. After the Silver IRA account is opened and funded with the tangible silver holdings, the IRA administrator will furnish you with periodic reports on the value of your account holdings. Meanwhile your physical silver will be securely held and guarded by a vault custodian who works with the administrator to assist in transferring silver in or out for any deposits, sales, or withdrawals that you order.

Silver IRA Rules

There are two primary regulations with Silver IRAs that pertain to the kinds of silver you can hold and the places you are allowed to store it. Both coins and bars must be made out of .999 fineness of silver and must be from an IRS approved mint. Among the few that make the cut for silver coins are Canadian Silver Maple Leafs, American Silver Eagles, and Austrian Silver Philharmonics. The bars must also be .999 fine silver and be from a recognized and approved manufacturer. That is why it is so important to know which ones you can select from before you give orders to purchase them. This is an area where a good administrator can help advise you.

Storing your Silver IRA metals is the second important rule. You should know that you can not simply put them into your safe at home. The IRS has a specific set of protocols surrounding storing your silver. You must have an approved third party custodian who holds these Silver IRA pieces. Fortunately there are a number of reputable ones that can help you with this.

Silver IRAs Pros

Independent Assets

Silver IRAs are not at the mercy of inflation, interest rates, government money printing sprees, or currency manipulation. These are factors that affect other investments that are dollar denominated. If the dollar goes down with time, as it has almost continuously in the past in hard asset terms, then when you sell your silver you will simply receive more dollars for your tangible silver assets. This is how silver protects you from hidden dangers to your retirement account.

• Diversification

Silver IRAs provide you with a real diversification for your retirement portfolio and assets. As a time-tested hedge against inflation, they help to provide you with stability and appreciation in a portfolio when other paper assets are declining. This is why a larger number of investors are interested in protecting themselves from economic instability that comes from rising government debt levels, potential government bankruptcies, and declining dollar values.

Physical Silver Distributions

It may be the biggest advantage for a Silver IRA that you have two ways to settle your silver when you want to get a distribution. You can sell your silver holdings for fair market value and withdraw the funds in cash. More uniquely, you are able to request a distribution of your physical silver be delivered to your home. These are the only kinds of IRA accounts that will let you bring home physical silver to keep as a protection against your future retirement value or to sell yourself whenever it suits you.

Silver IRAs Cons

Difficulties in Physically Transferring

Paper silver holdings are simply and easily transferred with a few mouse clicks as numbers on a screen these days, but physical silver has to be transferred the old fashioned way from the vault to either your home or the buyer. This requires some time.

• Time Delays in Selling 

There is some time involved in selling physical silver holdings that are in a third party vault. Paper silver investments are sold with the touch of a computer key or a few mouse clicks.

Greater Commissions for Physical Silver Transactions

The commissions and fees for selling a paper silver investment is often less expensive than the cost to sell physical silver coins or bars.