Investing in gold through a self-directed IRA

What is Self-Directed IRA?

IRA or Individual Retirement Arrangement is more commonly known as an Individual Retirement Account. This is a perfect tool for individuals to save money and to keep aside money for their retirement days. By enrolling on the retirement account, individuals can benefit from many tax advantages. The term ‘self directed’ is added to state that the individual account owner has complete control over the selection and direction of the individual retirement account investment. The funds from this account can be invested in real estate, precious metals, commercial paper or any unconventional investments.

What is a Precious Metals IRA?

Unlike a mutual fund, a self-directed IRA gives its owners the flexibility of investing in physical precious metals like platinum, gold, silver, palladium coins and/or bullion.The gold is purchased from a metal dealer and stored at a national recognized depository.

Why Gold?

Unlike other assets, gold tends to retain its value.A gold IRA can secure your financial comfort until you are ready to retire and start relaxing. There is absolutely no need to worry when you have a well-defined self-directed IRA plan. Some of its benefits are:

Benefit No. 1: Borderless Currency

As gold is a borderless currency, it tends to become more valuable in times of economic uncertainty. Moreover, there would always be a global demand for the metal and due to its limited supply; its price would also be higher.

Benefit No. 2: Non-Correlating Relationship with Other Assets

As the prices of gold are independent to stocks, bonds and other assets, the non-correlating relationship helpsinvestors create balanced investment portfolios. Furthermore, in the past few years, gold performed better than the real estate market and has done so with very little volatility.

Benefit No. 3: Demand for Gold

The demand for gold will always be high. Gold is not only used as a currency or to create jewelry but is also used for manufacturing of electronic equipment components due to its characteristic strength and durability.

Benefit No. 4: Value will Always be High

Due to its scarcity, gold is a tangible asset of which the value would always increase along with the demand. Currency may weaken or there may be an economy recession but the strength of gold would potentially always increase.

Benefit No. 5: Portfolio Diversification

Investing in gold will bring some diversification to your investment portfolio. This will ensure that no matter what is happening in the economy, you will have gold to fall back on.

How Do You Invest in a Self-Directed IRA?

To invest, all you are required to do so is get in touch with an existing gold IRA custodian company and open an account with them. Once an account has been opened, instruct your IRA to buy gold. The account executive will help you determine how much to buy and how to go about it. You will have to complete a form authorizing the executive to make the purchase and deposit the metal in your account. The IRS requires that the gold that is owned by the IRA to be held by a custodian bank. Your account executive will be able to assist you in working with any such institution. Follow the above-mentioned easy steps, for some excellent tax benefits of an IRA along with the security of owning gold.

We are quite sure after reading the above article; you would be excited about having your own self-directed IRA account to invest in gold. Go ahead and complete the paperwork and formalities to have one. However, do not forget to do some thorough research on how to really invest through a self-directed IRA. For some common mistakes that many people make, read an article named ‘5 worst things you can do to your self-directed IRA’.