Stocks and bonds aren't the only things you can hold in a tax-advantaged retirement account. You can also own gold thanks to gold IRAs. These retirement savings accounts enable investors to hold gold bars, coins and precious metals-related stocks in a tax-friendly account. Gold IRAs can also include exchange-traded funds or ETFs, precious metals mutual funds and precious metals commodity futures.
Similar to traditional IRAs, with a gold IRA, you invest money and let it grow until you start using it in retirement. If you withdraw funds before age 59.5, there's a 10% penalty, plus the money is treated as regular income. With a gold IRA, contributions are made with pre-tax money. With a Roth gold IRA, you pay taxes on the money invested, but all the gains are tax-free.
This year, you can contribute up to $7,000 in a gold IRA. If you are 50 or older, you can invest an additional $1,000 per year thanks to catch-up provisions.
What makes a gold IRA unique is that investors purchase and store physical gold in an Internal Revenue Service-approved facility such as a bank, or with an IRS-approved third party. The gold IRA must be held separately from a traditional retirement account, based on IRS rules.
Gold Is In Demand
Gold IRAs have been around since 1997 when the Taxpayer Relief Act was enacted, broadening the permissible types of investments that can be held in an IRA to include U.S. gold and silver coins minted by the U.S. Treasury Department. Since then, gold has been getting a lot of attention from institutional and retail investors, driving the price of gold to record highs. At last check, gold was up 15% year-over-year and is 81% higher over five years.
Gold is attractive to investors because it tends to hold its value amid economic and political strife. It is also a way to diversify beyond stocks and bonds. By investing in a gold IRA, regular investors can access the yellow metal without worrying about storing gold bars and coins in their homes.
How To Set Up A Gold IRA
When it comes to setting up a gold IRA, investors have to work with specialty custodians or firms that can handle all the paperwork, purchase the gold and store it for you. Since it’s not as straightforward as buying a stock-based IRA, it’s important to select a reputable dealer that has a track record in the industry. Lear Capital is one example. It has been serving the precious metals market since 1997.
The company makes it easy to open a gold IRA thanks to its streamlined process. It takes about ten minutes to complete the application and open an account – a process the company will walk you through. For an application with Lear Capital, the IRA is set up within 24 hours. If you have money to roll over from another IRA, Lear Capital will take care of the tax-free rollover for you.
Once the funds are transferred into your precious metals IRA, let the gold buying begin. To ensure you're getting the best price, Lear Capital offers its price-match service. If you find a metal at a lower price, Lear Capital will beat or match the price.
All of the hard assets you buy through Lear Capital are securely stored at what Lear says is a state-of-the-art, IRS-approved, insured private storage facility. Once you are age-eligible to take a mandatory distribution, you can take physical possession of the metals or liquidate your assets.
Not All Dealers Are The Same
There are several gold IRAs on the market but buyer beware, not all dealers are created equal. When selecting a firm to set up a gold IRA with, go with one with a good track record, that is licensed, bonded and accredited and offers top-notch customer service. Lear Capital checks off all those boxes and is known in the industry for its customer service.
Lear Capital empowers investors by providing access to easy-to-use but powerful investment tools, calculators and resources on its website to help you better prepare for retirement. Take Lear Capital's Smart Suite tool, for example. It helps investors figure out how much money they will need in retirement with inflation taken into account. There is also the Required Minimum Distribution calculator, which tells you how much you need to withdraw from your gold IRA each year to meet IRS rules. The company also boasts a Trustpilot score of 4.8, underscoring how satisfied customers are with its service and support.
Gold is shining bright as investors seek ways to diversify and ride out any economic and geopolitical malaise. Gold IRAs not only provide investors with the ability to get that exposure in their portfolio but in a tax-smart way. Are you interested in learning more about Lear Capital's gold IRA? Click here.
Featured photo by Mathieu Stern on Unsplash.
This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.
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