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Precious Metals Backed IRA And Why You Need One

If a precious metals-backed IRA is not on your radar for 2023, you haven’t been paying enough attention over the last couple of years.

The global economy has not been right ever since we emerged battered and bruised from our battle against the covid-19 pandemic.

While initially, most people attributed the struggling economy to the normal recovery period expected after such a global disaster, it soon became evident that what we were witnessing was, perhaps, the beginning of a severe economic depression.

Shrewd investors turned back the pages of history and realized that if this was going to be another period of economic uncertainty, buying gold coins, and lots of them, was the only refuge.

This brings us to the issue at hand; why you need to purchase precious metals fast before it is too late. If you already have an active and fully funded retirement account then you are already halfway there!

A simple rollover with one of the best gold IRA companies of 2022 assisting you will help secure your retirement funds against whatever 2023 has in store for us.

Add Stability to Your Retirement Accounts Portfolio

Precious Metals Backed IRA

When you think of your retirement, you probably imagine spending time with your significant other doing all the things that make you happy.

However, that will not be possible if your entire retirement account is reduced to nothing because of inflation and stock market volatility.

While you cannot control when and how the US dollar will rise and fall, you can take steps to stabilize your retirement portfolio against any eventuality. In terms of stability, has there ever been a more stable investment option than gold and silver?

No matter how bad the economy gets, people will continue to buy and sell precious metals which is great news for those smart enough to have a gold IRA. The more physical gold you have stored somewhere, the fewer sleepless nights you will have.

The good news is it only takes diverting about 10% of your retirement account savings toward a gold IRA to stabilize your funds. That means you can still leave a significant chunk of change in your 401(k) while exploring alternative investments.

What Are Precious Metals IRAs?

Precious metals IRAs (also called gold IRAs) are self-directed IRAs that are backed up by the value of their precious metals. In other words, instead of your retirement savings being valued according to the US dollar, they will be valued according to the day’s price of gold, silver, platinum, and palladium coins and bars.

These accounts are managed by gold IRA companies that have been vetted, licensed, and approved by the IRS to act as gold IRA custodians for precious metals IRA investors.

This also means that your precious metal IRA will be subject to IRS rules and regulations just like any other government-approved retirement account.

As a self-directed IRA, your gold IRA will come with a lot of tax benefits that are similar to a Roth IRA or traditional IRA.

As long as you use only IRS-approved gold and silver products and you refrain from making any withdrawals until retirement, these tax benefits will remain open to you.

Is a Precious Metals IRA Right for You?

With so many alternative assets that one can choose to invest in, why would you settle for buying gold bullion bars and coins under the watchful eye of the IRS?

Well, a gold IRA may indeed not be the best solution for everyone. This is why you need to look carefully at your financial goals and see if they will not be hindered by opening a precious metals IRA.

Before you decide to look for the best gold IRA companies that can help you open a precious metals IRA, ask yourself the following questions:

  • What are my financial plans for 2023?

  • Does my retirement account have enough money to rollover to a self-directed gold IRA?

  • Am I OK with not being allowed to keep my gold and silver?

  • Do I have the right gold IRA Company for the job?

  • How much time do I have left until retirement?

  • Have I understood and am willing to adhere to the IRS regulations?

Only after you are clear on all these points can you even think about approaching a gold IRA company and requesting a precious metals IRA account.

In most cases, a gold IRA is a viable option for most gold IRA investors to consider because there is no need to divert all your funds; just 10% will do.

Also, diversifying your retirement funds is something you should be doing anyway, and gold IRA companies such as Augusta Precious Metals are ready to help to make the process easier.

National Economy vs. Your Precious Metals Backed IRA

An interesting relationship exists between the National Economy (the US dollar) and the price of gold and silver. It seems that whenever the economy is suffering and inflation is particularly high, the demand for gold coins and other precious metals goes through the roof.

This inverse relationship is not a figment of the imagination as well because history has the facts to prove it. When looking at the United States, the World War II period is a time that had very poor economic growth and high demand for gold.

We do not even have to go back that far either. Between 1994 and 2008, the US had a total of eight very difficult years in which inflation was over 5%. These years, coincidentally, had the highest gold demand in recent times.

The same pattern seems to be emerging recently as well, which is why every day there seems to be new gold IRA Company popping up. Investors are anticipating a tough year ahead and as such, the demand for gold is slowly rising.

Whether or not these patterns are a sign of a major economic meltdown, such as the Great Depression, or something a lot less severe remains yet to be seen.

However, by the time 2023 rolls around, it would be better to have a few precious metals to fall back on just in case.

How Can Physical Precious Metals Protect Nest Eggs?

The value of precious metals when it comes to securing your retirement accounts has long since been known by gold IRA companies. They have made the best of that knowledge by providing investors with a wide range of options to secure their financial futures.

Apart from the fact that they are very expensive, what else do you know about precious metals that would make them great investment choices? Read on to find out some of the benefits of a precious metal IRA:

Tax Benefits

The one thing every investor dreads is seeing their funds depleted every time they have to pay taxes. If you make the wrong choices, the tax payments alone can be enough to eat away at your savings.

As an example, gold IRAs allow you to take certain tax deductions on your investments, just as you would do with a traditional or Roth individual retirement account.

In a Roth gold IRA, investors will have to pay taxes upfront, meaning your deductions and tax benefits will be applied when you fund the account.

With a traditional gold IRA, your contributions will be tax-deferred, meaning you will only pay taxes when you make withdrawals.

Both of these options are great choices and all you need to do is decide which one is more suited to your needs.

Diversify Your Portfolio

These days, with the economy full of so much uncertainty, it’s better to have your money spread out over different investments than to focus on one asset. That is the golden rule that all precious metals investors live by.

If something were to happen to your paper assets, you will have some funds tucked away in various gold IRA companies to rely on.

Also, if the disaster you are anticipating never comes around, you still have the value of the gold and the gains your gold IRA account has made to make the investment worthwhile.

Protection Against Stock Market Volatility

When bad news hits, some of the first people to feel the pinch are those invested in the stock market. The industry lives and dies at the whims of the public, and as such, the stock market is very volatile.

The last thing you want when it comes to long-term investments is to have to worry night after night about how the markets will perform the next day.

With precious metals, once you have safely deposited them, you can forget they are even there without a care in the world about how the economy will affect your investments.

Hedge Against Inflation and Declining Dollar

At times of great economic problems, investors usually turn to precious metals like physical gold, silver, platinum, and palladium to safeguard their investments against the effects of inflation and deflation.

This is because gold and other metals have proven to be very resilient when it comes to the effects of inflation to the point that their value even increases at such times.

In all likelihood, 2023 is going to see high levels of inflation across the board, which means your task right now is to find gold IRA companies that will help you protect your funds against the coming storm.

High Global Demand

If you look at some of the world’s leading economies in terms of gold reserves, you will see that over the last few years, even with the millions of tons of gold these countries have, they are still buying more gold than ever before.

This is because gold is a finite resource whose rarity makes it very valuable. Countries like Russia and China have dedicated a lot of money to make sure that they have enough gold for whatever eventuality the future may bring.

The importance of precious metals in industry and technology also means that their demand will always be increasing no matter what. This makes them some of the most reliable forms of investment on the market.

Highly Liquid

When you are faced with an emergency, the last thing you want is to spend time searching for a way to liquidate your assets and get your hands on some cash. With gold and silver, there will always be a willing buyer waiting to take them off your hands at a moment’s notice.

Most reputable gold IRA companies also have to buy back options that they use to entice clients to their portfolios. This means if you want to sell your gold, your gold IRA custodian will be ready to buy it back from you at a very good price.

Setting Up Your New Precious Metals IRA Account

Setting up a gold IRA account is very easy once you understand the required steps and find a suitable custodian. The only thing that is difficult for most precious metal investors is to understand the IRS rules. However, your gold IRA company should be able to help you there.

To set up your gold IRA accounts, simply follow these easy steps:

Find a Reputable Gold IRA Company

A good gold IRA company is easy to spot if you know what to look for. The following are the signs of a reputable company:

  • Knowledge of IRS rules and regulations

  • Works with reliable and affordable IRS-approved depositories

  • Affordable account setup fees and other associated costs

  • Many years of experience working with physical precious metals

  • IRS licensing and insurance for all its precious metals

  • A wide range of precious metals to choose from

  • A good reputation for honesty, integrity, and excellent customer service

Once you have ticked all these boxes, you can proceed, knowing that your precious metal investment will be in good hands.

Fund Your Gold and Silver IRA

When it comes to funding your account, the most favored option by the best gold IRA companies is to conduct a gold IRA rollover. This simply means diverting some funds from an existing IRA to your gold IRA.

However, there are certain rules that you need to follow, such as the fact that you are only allowed one rollover per year. If you do the rollover and the money goes into your bank account first, it cannot stay there for more than 60 days.

If you find you are unable to do the rollover, a direct transfer is the next best thing. This is usually the preferred option for most investors that do not have access to a 401(k) or another type of retirement account.

Buy Gold Bullion and Other Precious Metals

Once your money is safely in your custodian’s account it’s time to buy precious metals. These must be IRS-approved coins and bars, with a purity of the highest standards (99.5% for gold, platinum, and palladium; 99.9% for silver).

Consider the following examples:

  • American Eagle and American Eagle Proof coins

  • American Eagle platinum coins or bars

  • Credit Suisse bars made by an NYMEX or COMEX-approved refinery

  • Platinum or palladium Canadian Maple Leaf coins

  • Platinum and Palladium bars minted by an NYMEX or COMEX-approved refinery

  • Canadian Maple Leaf coins

  • Austrian Philharmonic coins

  • Canadian Polar Bear & Cub coins

  • British Britannia (2013 and newer)

  • Australian Kookaburra coins

  • Australian Kangaroo coins

  • Chinese Panda coins

Pay Your Storage Fees

As much as you would want to keep these coins and bars, the IRS will not allow you to do so. You will have to find an IRS-approved depository, such as the Delaware depository in Wilmington.

Such a storage facility is the safest place for your precious metals, but it will come at a cost so be prepared to pay some storage fees on top of the custodial fees you would have already paid.

Continue Investing in Precious Metals

Having a few precious metals in your gold IRA account is great but you can still do a lot more. Investors with experience in alternative investments recommend going up to at least 10% of your retirement portfolio.

If you have not reached that point, then there is no need to hold back from investing a lot more. After all, this is a tax-advantaged account, so you have nothing to lose by investing as much as you can. Your financial advisor will be able to advise you on how much you can diversify.

Required Minimum Distributions

Just like an ordinary self-directed IRA, your gold IRA is subject to IRS rules regarding minimum distributions. These will differ from one account to the next and you will need to find a qualified tax expert to assist you.

Invest in Physical Gold and Silver Bullion Today!

There is a reason why gold IRA companies such as Augusta Precious Metals have been witnessing record business over the last year or so. It is because the economic outlook is very bleak, not only in the US but all over the world.

A lot of people have been running towards the safety of gold IRAs and for once following the crowd is a good idea. Your number one investment objective for 2023 has to be securing your funds against inflation, and what better way to do that than opening a gold IRA account?