Silver Investments 101: All the Silver IRA Rules You Need to Know

Most people see precious metals as something outrageously expensive they can’t get, but the truth is they are within the range of many people. You can even create a precious metals IRA and benefit from what these assets offer.

People looking forward to creating a precious metals IRA can invest in gold, silver, palladium, and platinum. While all those options could be a decent choice for you depending on what type of investor you are and your goals while creating a precious metals IRA, we are here to talk about silver.

Setting aside gold, silver is the most mainstream precious metal for people managing a precious metal IRA. Therefore, getting silver for a silver IRA is not that complex. You need to understand all the rules for investing in silver before creating an individual retirement account.

If you want to create a Silver IRA but need to know the different restrictions and rules of managing a silver retirement account, you’ve landed on the right page. Dive into this page to learn how precious metals IRAs work and the benefits of investing in silver.

Table of Contents

What Is a Silver/Precious Metals IRA?

Although people call it a silver IRA to emphasize it focuses on silver, investing in a silver retirement account is the same as doing it with other precious metals. Therefore, opening a gold retirement account is the same as creating a silver IRA.

With that being said, precious metals IRAs are individual retirement accounts that allow you to add precious metals to them, and this is the only difference between them and traditional accounts.

People open a precious metals IRA to diversify their portfolio or have a hedge against inflation. Naturally, the benefits precious metals offer come with various requirements, and one of them is you need to pay storage fees when getting physical precious metals.

You also need to find a reliable storage facility that is fully insured and ensures your precious metals won’t suffer any harm. Investors can buy silver in different presentations, so they can buy silver bullion bars or silver coins.

Benefits of Owning Silver

As we mentioned before, creating a precious metals IRA comes with many benefits. All precious metals have different features, and silver is no exception to that. These are the main benefits of opening a silver IRA account:

Portfolio Diversification

The first benefit of investing in precious metals or silver is you promote portfolio diversification. You may not be familiar with this term if you haven’t studied how a precious metal IRA works in the past or if you’ve never been into investments.

Your investment portfolio shows your collection of assets, stocks, mutual funds, currencies, and precious metals. If you only invest in one asset, and that asset loses its value, you will end up losing a lot of money. Diversifying your portfolio means having different assets at hand, and precious metals are perfect for that matter.

Precious metals have always been popular for being safe investments, and they will keep their value even if the others fall short.

Hedge Against Inflation

One of the reasons precious metals are that good for portfolio diversification is they work as a hedge against inflation. What does that mean? In a nutshell, inflation doesn’t affect the silver you buy, so your silver coins or bullion bars will stay as worthy as they were when you bought them regardless of how much inflation affects currencies worldwide.

This doesn’t mean the value of silver doesn’t change every now and then since all assets on the market are volatile to some degree. However, they are not close to being as volatile as currencies or cryptos.

Why is silver less volatile than currencies and other assets? Because it’s a physical asset, which gives it intrinsic worth. Even if interest rates are low at the time, silver will hold its value.

Simple Resell Process

Investors often struggle to profit from the assets they buy due to the demand for them decreasing. You will never have this problem when buying silver since there’s always a high demand for precious metals. These assets protect people from inflation and economic crises, so there’s always someone looking forward to buying silver coins or bullion bars.

Diversity

Whether you open a gold IRA or a general precious metals IRA account, you have a wide variety of options available on the market. Investors can choose between four precious metals and all their types and shapes. If you, for example, open a gold IRA, you can still choose between gold bars, gold coins, gold jewelry, gold leaf, and gold nuggets.

Do you prefer going for silver rather than gold IRAs? You have precious metal bullion bars, silver coins, ETFs that own silver, and silver mining stocks. Choose the one that best suits your investment plan!

Is Investing in Silver Better Than Investing in Gold?

As we mentioned before, people opening precious metal IRAs have gold and silver as their top investment options. This has led investors to wonder which of the two is best for a precious metal IRA.

Regardless of that, it’s not like any of the two is better than the other since both are useful for different situations.

Gold, for example, is less volatile than silver, so it’s a safer investment overall and a better option for portfolio diversification. However, silver is more affordable than gold, and that makes it easier for people working on a budget to invest in it.

Additionally, silver has more utility than gold, so profiting from silver is a more straightforward process than the one you have when buying gold.

Now, should you invest in gold or silver? Well, if you want to diversify your portfolio and go for a slow investment strategy, gold is better for you.

Physical gold may be more expensive than silver, but being less volatile allows you to make slow moves and take time to invest in more assets. On top of that, gold works as a countercyclical investment, which means it increases its value when mainstream assets lose theirs.

Are There Any Drawbacks to Investing in Silver?

Everything in life has some drawbacks, and that includes investing in silver. It’s worth noting you may face the same disadvantages of investing in silver when investing in other precious metals. Regardless of that, there’s not any disadvantage that could represent a major setback to opening self-directed IRAs or precious metal IRAs over a traditional IRA.

Restrictions

Whether you open a self-directed IRA, Roth IRA, or traditional IRA, you will have to face some restrictions. As for precious metals, they need to meet some requirements to be accepted by STRATA and qualify as IRA funds. This means you need to find a precious metals dealer with products that meet those criteria.

These are the IRA requirements for precious metals:

Gold has to be 99.5% pure.
Silver has to be 99.5% pure.
Platinum has to be 99.95% pure.
Palladium has to be 99.95 pure.

Besides that, people need a self-directed IRA custodian to manage their retirement funds.

Fees

Fees may be the main disadvantage of creating silver IRAs since a percentage of your retirement savings will go away when you start paying them. Firstly, you need to find a decent storage facility.

Many precious metals dealers offer storage options, but you need to pay for that. You can’t forget about transaction and custodian fees though they are not as expensive as storage ones. Liquidations need people to pay a cash-out fee, and you need to handle a one-time setup fee to open your account.

Looking to get started? Here’s our list of Silver IRA firms.

How to Create a Precious Metals IRA

As we mentioned before, the process to create a gold IRA account is the same as creating a standard precious metals IRA, so don’t worry about that. The first step is to choose a self-directed IRA custodian to hold your account. You can pick any entity approved by the IRS as a custodian. As long as you follow IRS rules, you won’t have any problems to store precious metals.

Getting a self-directed IRA custodian also allows you to invest in other assets aside from gold, silver, platinum, and palladium, such as real estate.

After that, you need to find a decent precious metals dealer to sell platinum coins, silver coins, gold bullion, or any other assets you want. Some precious metals dealers offer different features, such as financial advisors, storage facilities, or educational resources, so go for the one you like best.

You need to make an investment plan before you purchase precious metals. Decide if you want to go for silver or gold and the financial moves you want to make before investing in anything.

We recommend you hire a financial advisor to handle the silver or gold IRA paperwork and tell you everything you need to know about managing IRA funds and storing precious metals.

Wrapping Up - Learn More About Physical Precious Metals on Our Website!

There are many ways to build a strong portfolio and individual retirement account, and precious metals like gold, silver, platinum, and others are one of the safest and best ways of doing it! You don’t need to be an experienced investor to learn how to buy silver, so don’t be afraid to try it!

Do you want to learn more about precious metals and retirement accounts other than traditional IRAs? Read more investment-related articles on our website! We have information about income tax requirements, Roth IRAs, assets like Canadian Maple Leaf Coins, and buying precious metals in general, which will greatly benefit all precious metals investors.