A Guide to Gold IRA's

Gold is constantly in the news now and is all the buzz on financial reports. Why? Because gold is one of the few commodities that has never been worthless. The prices range up and down, but gold has always had intrinsic value, since it was first discovered and utilized by mankind thousands of years ago. Man has always been fascinated by gold – not just for its natural beauty, but also for its malleability. Through the centuries, gold has been fashioned into jewelry, amulets, chalices, totems, and adornments for tombs. It’s synonymous with wealth and quality. Why do people invest in gold and collect gold coins? Gold is not a renewable resource. The earth holds only so much gold, and over thousands of years of mining, a relatively small amount has been discovered and removed. No one knows for sure exactly how much more gold the earth may have hidden, but we do know that it’s a finite amount. No more of the precious metal will ever be made. Herein lies the main reason as to why gold is so valuable. In fact, most financial gurus recommend a portfolio with 10-20% in gold or other precious metals. Apart from all the above, gold also has common-sense value. Historically speaking, gold has always been an extremely valuable asset in times of economic downturns and other sorts of trouble. For one thing, it’s a wonderful hedge against inflation. Generally speaking, as the value of the U.S. dollar drops, the price of gold goes up. Gold provides a safety net in times of war, political upheavals, and huge national debts. Gold coins are highly valued by investors and coin collectors alike. There are many types of gold coins from which to choose, including rare old coins. Holding such coinage is like holding a piece of history in your hand. They have two kinds of value: one because of their precious metal content, and another because of their history and rarity. Investing in a gold IRA More and more people are investing in gold and are finding more ways to invest in gold. Many are turning to gold-backed Individual Retirement Accounts, or IRAs. This could provide a stable investment for your retirement years. For example, if you had invested the same amount of money ten years ago in Dow-Jones stocks and in gold, your gold would have returned 320%, while your stocks would have earned only 14%. Had you invested in gold proof coins, you would have earned almost a 435% return. Investing in a gold-backed IRA isn’t as difficult as you might think. Your current individual retirement account might be eligible. In accordance with the Tax Relief Act of 1997, some IRA plans allow you to add gold assets, while others don’t. Your IRA custodian can tell you whether or not your account allows gold investments. If your retirement account doesn’t allow you to add gold to your IRA, you can open a new IRA and include gold assets. Your account custodian can instruct you as to exactly what is required and explain the fees structure to you. Be sure to choose an IRA custodian who has a lot of experience with gold and other precious metals. What type of gold is permissible in a gold IRA? Not all forms of gold are allowed in an IRA, per the Internal Revenue Service. Gold bullion bars that have a purity of at least 99.5% are acceptable. Gold coins can be purchased, also. They have to be 99.5% pure and be legal tender. One of the most popular gold coins for IRA investments is the gold proof American Eagle, coined by the United States Mint. In addition to gold bullion and gold coins, you can purchase gold mining stock to back your gold IRA. With this choice, you won’t actually own gold. Instead, your investment returns will be based on the profits or losses of gold mining companies. Gold isn’t the only precious metal you can use in an approved IRA. The 1997 law makes it possible to back certain traditional IRAs, Roth IRAs, SIMPLEs, and SEPs with platinum, silver, or gold. Will I keep the gold myself? If you make the decision to open a gold IRA, you won’t hold the gold. Instead, your gold will be stored in a depository. If you were to accept the physical gold, the IRS would view it as a distribution, which would result in penalties and taxes. Of course, you want to avoid these whenever possible. Approved depositories charge nominal fees for storing your gold. Many charge between $50 and $100 for the first year’s storage fees. How is a gold-backed IRA like other IRAs? Your gold-backed IRA can be much like other IRAs. You’ll have a voice in certain decisions regarding your account, including selling your gold if you wish to do so. You can then use the money from the sale to make other investments. Also, like other types of IRAs, your gold-backed IRA is usually protected under the law in most cases involving lawsuits and bankruptcies. Although the laws regarding IRAs vary somewhat among different U.S. states, most judges will not allow your IRA funds to be seized or garnished if they’re needed to support yourself and your family after retirement. In the case of smaller IRA accounts, federal law will trump state law. The U.S. Supreme Court, in a 2005 ruling, stated that any IRA with a worth less than $1,000,000 is exempt from an estate in the case of bankruptcy. Can I sell the gold in my gold-backed IRA? Should you decide to sell the gold in your gold IRA, the custodian of your account will help with this. He can place your gold on the market for you, and you can use the proceeds from the sale of your gold investment to buy stocks, bonds, mutual funds, or money market accounts. Save money on opening a gold IRA The fees charged by institutions for opening and managing your account range fairly widely. Fees are also charged every time you make a transaction. These usually range from $25 up to $50 for each time you make a purchase or a sale. If you’re making regular transactions, you’ll save a substantial amount in these fees alone by doing some comparison shopping. If you’re ready to open a gold IRA along with another type of account or two with the same financial institution, ask about having some of the fees waived for the first year