The Benefits of Opening a Gold IRA Account

Why Open a Gold IRA Account

There are four different precious metals which are typically purchased as an investment: silver palladium, gold and platinum. Silver is another sound investment but with a spot price of about $20 an ounce, a wealthy investor would have to buy several hundred pounds to achieve a goal of 20% in his or her portfolio. The price of storing that much silver would take a large amount of the investor’s retirement fund so while silver is quite stable, it isn’t very practical. Palladium is worth substantially more than silver but its spot price fluctuates wildly and it regularly decreases by up to $25 an ounce in a single day. Platinum is more rare than gold but it’s less stable that palladium and sometimes it’s spot price can actually drop below the spot price of gold. Therefore, gold is the most practical of all the precious metals to roll over into a gold IRA account. There are several benefits to opening a gold IRA and knowing them is essential for any wise investor.

Safe and Easy Tax Relief

Congress passed the taxpayer relief act in 1997, allowing the inclusion of the four precious metals into an IRA. A precious metals IRA is no more than a self-direct IRA except the investment can consist of gold, silver platinum and palladium. Not all gold is allowed as a precious metals IRA investment so knowing what gold is permitted is vital. Gold bullion and 24 Karat bars can be included into a precious metals IRA. However, these bars have to have an authentication hallmark from one of two different authorities: the New York Mercantile Exchange (NYMEX) or the Commodity Exchange Incorporation (COMEX).

A Variety of Options

The IRS also allows certain 24 and 22 Karat gold coins to be included into an IRA. The American Eagle, Canadian Maple Leaf and the Australian Philharmonic are the gold coins most commonly included into a precious metals IRA. The gold must also be stored at an IRS approved depository and a storage fee will be charged. Also the gold IRA account, like all self-direct IRAs, must have a custodian, such as a bank or brokerage firm. The custodian will also charge a fee so it’s best to shop around and compare prices and services.

Protection against Inflation

In the year 2008, thousands of people lost their entire life’s saving virtually overnight because they had all or most of their money invested in paper. That means they had no physical assets and all of their worth was invested in stocks and bonds. None of these assets are backed by gold and they are subject to the effects of inflation. Even when the other precious metals declined slightly in value after the 2008 economic collapse, gold actually increased in value. Gold literally is the gold standard and formerly impoverished countries such as China and India are buying every ounce of gold that they can get.

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