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Is a Silver-Backed IRA the Right Option for You? Find Out Here!

Experts say one of the surest signs of an economic downturn is the shift by the majority of people towards silver bullion and other precious metals. When investors start to run away from their tried and tested paper assets you know that there is something bad coming.

This has been a growing trend in recent years, as the global economy is going through a very bad patch that has been compounded by the recent pandemic and, now, the political tension between the world’s most powerful nations.

If ever there was a time to turn to the relative safety afforded by investing in precious metals, it is now. Opening a silver IRA account can help you weather the potentially devastating economic downtown we might encounter very soon.

This article will look at some of the benefits silver IRAs offer and how you too can open a precious metals IRA today!

What is a Precious Metals IRA?

Silver-Backed IRA

A precious metals IRA is a form of retirement savings account that contains precious metals, such as gold, silver, platinum, and palladium bullion bars and coins. It is a self-directed IRA that offers investors full various tax benefits as well as full control over the direction and management of their silver IRA account.

What Is a Precious Metal IRA Rollover?

Opening a silver IRA requires funds needed to purchase precious metals and to cover the various account fees that come with it. One of the ways to fund your account is through a silver IRA rollover.

If you already have an existing self-directed IRA, such as a Roth IRA or Traditional IRA, you can rollover funds from those accounts to your new IRA account. The process works well with other types of retirement accounts, such as a 401(k).

How To Conduct a Silver IRA Rollover

While the process of conducting a silver IRA rollover is easy, it does require the help of a qualified and reliable precious metal IRA custodian. There are so many of these custodians to choose from which is why you have to be very careful when you make your choice.

The first step of your rollover will require contacting the custodian of your 401(k) account, Roth IRA, or Traditional IRA to inform them of your intentions. Naturally, they will be reluctant to let you take funds out but you have to stand fast and resolute.

Your retirement account custodian will then communicate with your new account custodian to initiate the rollover. Keep in mind the following regulations set by the internal revenue service:

  • You are only allowed one rollover per year

  • Any funds that you rollover cannot stay in your bank account for more than 60 days or risk paying a huge penalty

Once the rollover is complete your funds will be transferred to your new precious metal IRA custodian and you will be ready to start buying precious metals, such as gold and silver.

How To Invest in Physical Precious Metals in Five Easy Steps

Surprisingly, gold and silver investments are not that difficult to manage, especially if you have the right custodian to assist you. If you are ready to step back a little from mutual funds and the stock market, and turn towards physical silver and gold, take the following steps:

Step 1: Choose a Silver IRA Custodian

This is, arguably, the most important step you will need to make to determine the direction your gold or silver IRA will take. After all, all of the following steps will be conducted under the guidance of your precious metal IRA custodian.

When choosing your Silver IRA custodian, it is important to do as much research as possible, paying particular attention to the following:

  • Experience and knowledge in critical things, such as IRS rules and regulations, conducting a silver IRA rollover, tax benefits (after-tax dollars, etc.), and the right precious metals to invest in

  • The custodian must be licensed by the IRS

  • Insurance against theft and damage

  • Access to an IRS-approved depository

  • Custodial fees, hidden costs, and all other related payments

Step 2: Fund Your Precious Metal IRAs

When you have settled on your custodian of choice, it’s time to choose how you will fund the account. Besides a silver IRA rollover from your existing IRA account, which we have already mentioned, you can also choose to provide IRA funds through a direct transfer by depositing cash into your custodian’s account.

However, you have to be aware of the added costs of conducting a transfer. The process itself is easy and in no time at all, you will have a self-directed silver IRA ready to receive precious metals.

Step 3: Buy Gold and Silver Coins

When the IRA funds are ready, it is time to choose the best precious metals for your new type of retirement account. Unfortunately, you cannot just add any precious metals to your silver or gold IRA. The IRS has specific rules against that.

The gold, silver, and other precious metals that you add to your silver IRA must meet the IRS minimum fineness requirements, which are 99.9% for silver coins and bars, and 99.5 for gold, platinum, and palladium bullion.

Some examples of gold and silver coins that can be added to precious metal IRAs are:

  • American Gold Eagle Coins

  • Canadian Maple Leaf coins

  • Australian Kangaroo Coins

These coins must be authentic and minted by an approved mint, such as the Royal Canadian Mint. Rare coins are not deemed suitable for gold and silver IRAs.

Step 4: Choose a Depository

You are not allowed to keep the physical precious metals that are part of precious metal IRAs otherwise this will be considered a distribution and when that happens in a self-directed IRA, the holder will be penalized.

The only option is o choose an IRS-approved silver and gold depository, such as the Delaware depository. If you chose good precious metal IRAs custodians, you will likely be given some good options for storage.

However, this will mean you have to pay additional fees for the storage facility, as such; you will need to choose one that meets your budget and offers additional perks, such as free transportation of your precious metals.

Step 5: Invest in More Precious Metals

Now that your precious metals IRA is up and running, it does not mean you can just forget about it and allow your investment to sit for years. You have to continuously invest in more and more precious metals.

If you have the funds, you can even open more than one IRA account so that you can further diversify your portfolio and spread the risk even more. The key is to keep buying precious metals every chance you get.

By the time you retire, you will have built up a sizeable retirement account balance that will be able to sustain you for years to come.

Rules for Silver IRAs

Silver IRA Rules

As long as you earn taxable income, or your spouse is a wage earner, you can open a precious metals IRA. However, there are specific rules set by the IRS that you need to be aware of, such as:

  • The maximum yearly contribution limit for IRAs is $6,000 (or $7,000 if you are above 50 years old)

  • There is no limit to the number of precious metals IRAs you can have

  • Transfers and rollovers from existing IRA accounts have no maximum dollar amount

  • Only one gold IRA rollover is allowed per year

  • You cannot add the gold and silver that you already own to a precious metals IRA

Seven Reasons to Invest in a Silver IRA

Having a self-directed IRA is not enough if you want to secure your retirement funds in the long run. You need the added safety net that only silver and gold IRAs can give you.

If you have never before considered investing in silver and gold coins, perhaps the following benefits of having a silver or gold IRA will change your mind:

Financial Security

Nothing gives you more financial security than having physical gold and silver in your safety deposit box. No matter what happens in the global economy, you will rest assured that your retirement funds are secured.

This is because precious metals have a history of being able to withstand turbulent times, such as the Great Depression and the World War. As such, in the face of such economic uncertainty, it is wise to put your trust in precious metals IRAs.

Accessible To Everyone

As long as you earn an income, or your spouse does, you can approach a silver IRA company and start a precious metals IRA. This makes this form of investment one of the most accessible there is.

You can even find a gold IRA company that allows a minimum investment that is as low as $10,000. However, when dealing with some of these precious metal custodians that offer great fees, you should be careful because the world is full of scammers.

Portfolio Diversity

One of the main reasons to take some of the money that was going towards paper assets and use it to buy gold, silver, and platinum coins is so that you can diversify your portfolio. Every investment carries its own risk and the same applies to precious metals investments.

However, by diverting as little as 105 of your retirement funds towards precious metals, you are guaranteed that even if the worst were to happen, you will not be left with nothing because you are covered by a wide range of different investments.

Growth Potential

Ever since the world began appreciating the value of gold and silver, precious metals have continued to grow and it looks like they will continue that way for many more years to come.

The demand for gold and silver has increased drastically over the last few decades, with countries like China and Russia spending billions to acquire them. Italy has even vowed to not spend any of its gold no matter how desperate the situation may be.

This behavior by some of the world’s most powerful nations should be enough to convince you that gold and silver are the future.

Tangible Assets Have Intrinsic Value

Unlike other forms of investment that are based on speculation and market trends, silver is a tangible asset that has very important real-world applications.

In medicine, it is considered one of the most powerful naturally occurring antibacterial agents. Silver is also important in photography and the manufacture of solar panels. This means the demand for silver will continue to increase.

Tax Benefits

Just like all self-directed IRAs, a silver IRA comes with a lot of tax benefits that make it a worthwhile investment option. Paying taxes on your retirement accounts is one of the biggest expenses that you have to deal with and if not handled properly, it has the potential to severely deplete your funds.

As long as you decide to withdraw the funds from your silver IRA after you retire, you will not be taxed before that time and you will not have to pay any penalties. This means investing in a silver IRA is a long-term decision, not something you can change your mind on at any time without cost.

Easy To Liquidate

In times of emergency, when you desperately need some extra cash, would you rather have your funds tied up in real estate or readily available in the form of precious metals?

It is much easier to sell gold and silver to a precious metals dealer than it is to find a buyer for your house. This makes this form of investment one of the easiest to liquidate and one which is guaranteed to always have a long list of buyers waiting to purchase all you are willing to sell.

Open a Precious Metals IRA Account Today!

If you haven’t already opened a silver IRA, you are wasting too much time. The economy is getting worse and worse and there is no telling where it will end. A self-directed IRA based on silver is one of the best ways to protect your retirement accounts.

Find a reliable silver IRA custodian today and begin preparing to invest in precious metals!