Five Surprising Facts about Precious Metals IRAs
Precious metals IRAs are becoming increasingly popular because of the returns they offer. You can start a precious metals IRA at any age and transfer existing retirement accounts into it. Read more about precious metal IRAs in this article.
Five Surprising Facts about Precious Metals IRAs:
1. The Precious Metals IRA has existed for years.
The federal government established the precious metals IRA in 1997, but it wasn’t until 2003 that the IRS began to allow the account to be opened with precious metal coins and bars instead of cash or stocks.
After a spike in demand from investors during economic uncertainty, the IRS decided that investors could use a precious metals IRA to hold any physical gold or silver.
2. You can buy any gold or silver with your IRA.
The IRS rules that determine what types of metals you can purchase using money from an IRA account have changed several times over the years.
Investors were only able to use a precious metal IRA for coins and bars produced by government mints like the U.S. Mint and the Royal Canadian Mint for many years, but in 2008 that changed to allow investors to use their IRAs with any type of gold or silver bullion produced by a refiner approved by the IRS.
3. The metal must be of a certain fineness.
To invest in gold or silver using an IRA, the IRS requires that the precious metals meet a minimum purity level set by law.
The current bar for standard gold and silver investments is .995 pure bullion, with no less than 99.50% of the entire product being pure precious metal.
4. Gold is the most prevalent metal for IRA investors.
According to a recent article in Forbes magazine, gold has been more popular than silver as an investment choice within precious metals IRAs since 2012. This trend is expected to continue into 2017.
The reason that gold continues to be seen as a safe-haven asset during times of economic uncertainty is likely due to its popularity as a store of value for centuries and the fact that it has held steady in price while other assets decline.
5. There are no taxes on the income from your IRA.
The IRS does not consider any profits made by an IRA to be taxable income as long as those gains were made using money that has been in the account for at least five years and you have reached age 59 ½ or retired before making a withdrawal.
In conclusion, the decision to invest in precious metals is often based on an investor’s perception of what will happen during times of economic uncertainty.