If you have not started your retirement savings yet, you have to do it now. Some are not as interested in investing as they think that they do not need it. Actually, if you want to have an independent and comfortable senior year, you have to consider investing, particularly in IRA. IRA stands for Individual Retirement Account; it is a form of pension being given by some financial institutions. It offers tax advantages for your retirement savings.

IRA is a kind of trust that holds assets invested and purchased by a taxpayer’s earned income for his/her eventual benefit as he/she reaches his/her old age.

Actually, more people are familiar with the traditional IRAs where aspiring retirees open an account at a brokerage firm. When you choose this investment, the money you invest will buy bonds, mutual funds and stocks.

Meanwhile, the less familiar self-directed IRA investment option, is the more recommended option, especially if you want to manage your own investment. Self-directed IRA lets you get the same tax advantage as the traditional IRA and it also has the same guidelines as the latter. The only difference in self-directed IRA is you can manage your investment and your investment options are not only limited to what the brokers can offer.

The investment options you have when you choose a self-directed IRA are broad, and this includes assets that you can touch and see like business, cash flow real estate, business and other precious metals, like gold, platinum, palladium and of course, silver.

A silver IRA is just like an IRA that comes with some kind of silver investment included in the account.

Self directed IRA offers investors with a great dispense of investment flexibility. The only investment that is not allowed by the Internal Revenue Service (IRS) regulations are collectibles and life insurance. This means that you can buy silver or any other precious metals of your choice with a self-directed IRA.

The limitations on the collectibles include coins that are being collected because they are made. The IRS only allows a certain type of silver bar and coins whose values are highly dependent on their metal content.

Also, it is your responsibility to follow the regulations set by the IRS for storing and purchasing physical silver.

The prohibition on collectibles includes collectible coins. The IRS allows only certain types of silver coins and bars whose value depends entirely on their metal content. In addition, you must follow IRS regulations for purchasing and storing physical silver.

Providers of self directed Individual Retirement Accounts impose a few restrictions, compared to a managed account that will limit your opportunity to just bonds and stocks or even restrict you just to bank CDs.

Brokerage firms and banks may offer self directed Individual Retirement Accounts, you just have to choose wisely which of them to trust. Apart from the ones mentioned, there are also custodian firms that offer this type of account.

Moving on, under the rules of the IRS, you cannot take possession of precious metals you purchased using an IRA, and neither your account custodian can do that. Most of the time, account providers that grant IRA investment in silver or any precious metals have created an arrangement with a depository to where you can keep your precious metal.

You can fund your IRA by giving contributions. You are allowed to deposit up to five thousand five hundred US dollars every year, and when you reach the age of fifty, your limit goes up one thousand US dollars more because of the program they call “catch up contribution” where you can add up $1000 more from your current maximum contribution per year.

You can choose the type of silver bullion to invest in with your self directed Individual Retirement Accounts (IRA). The IRS allows the Canadian Maple Leaf, Austrian Philharmonic and American Eagle silver coins. You are also allowed to buy silver bars that adheres to the standards for purity of IRS.

You can instruct your IRA custodian/trustee to buy the silver of your choice using the money you have shared to your self-directed Individual Retirement Accounts. As per the rules of IRS, you are not allowed to deposit investment to your Individual Retirement Account. You have to initially deposit cash, then let the account custodian carry out the particular transaction.

Some Good To Know Information

There is a lot of information you need to know about IRA before you can consider yourself as a guru, to help you start with valuable information, read through the terms you can encounter in this type of investment:

Collectible Investments

IRS Publication 590 summarizes the rules for Individual Retirement Accounts, it states that the Investment Internal Revenue Service does not allow investment in collectibles in the IRA. Included in the items they prohibit are gemstones, antiques, rugs, metals and artwork. Also, included on the items they prohibit are coins, but only coins that are collectible, like coins that are rare or old that have high interest to coin collectors, not people who are interested with the coin because of the precious metal content of it.

Allowable Gold Coins

The tax law was very clear in terms of the coins that are allowed in the IRA. Allowable are one tenth ounce, one quarter, one half and one US gold coins and one ounce silver coins that were made by the US Treasury Department, these are American Eagle silver and gold coins.

Other Metal Investments

Apart from silver, you can also invest in specific platinum coins in your IRA, also palladium and platinum bullion. These metals come with more industrial value as they are being used in stimulus converters for autos, but their price has the tendency to follow the activity of gold.

Silver and gold bullion are allowed. Bullion is the metal that was made in bar form, instead of a coin.

Trustee

If you want to invest in silver or gold in your Individual Retirement Account, you need to hire an IRA trustee or custodian. The trustee you will hire should be willing to handle the investment on your behalf.

There are trustees who are not willing to hold gold investment because it requires storage. Moreover, the silver should be stored under the trustee’s control to avoid the owner of the IRA from selling and accessing the gold or silver outside of the tax free structure of the Individual Retirement Account.

Storage

As per the law requirements, it is the trustee that needs to control the investments in your Individual Retirement Accounts. This is to make sure that the assets invested won’t be used outside their tax deferred or tax-exempt purposes.

The trustee or the custodian you will choose should provide a physical storage for your silver or gold coins, under his/her control. This can either be through a bank deposit box or a safe.

Other considerations

Expect that the trustee you will hire will bill you for the administrative expenses to your IRA. The expenses will not have a contribution on the maximum allowable Individual Retirement Accounts contribution for both Roth or a traditional account.

For instance, the maximum investment allowed per financial year in Roth account is $5000, and that amount you invest in a custodian in gold coins.

The custodian/trustee will bill you $200 yearly for storage and administration of the coins. The $200 will not be deducted on your maximum investment, hence, the amount you can invest in a year is still $5000.

Now that you know more about a lot of IRAs, the next things you need to know are the pros and cons of working with silver IRA companies.

The Pros And Cons Of Silver IRA

A self directed Individual Retirement Account can either be a Roth IRA or a traditional IRA. With the usual IRA, the account is being funded with pretax US dollars. You only have to pay income taxes when you want to take the money from your account at your retirement age.

So as the Roth, it is funded with post tax US dollars, so there is no immediate tax saving, yet, you can decide on taking your money any time on your retirement without paying any tax.

For both of the IRAs mentioned, your investments will grow without tax while they are in the IRA. Even if you decide to sell the silver, you will not be taxed as long as the gains are kept in the silver IRA.

 

The IRS decides on the limit of contributions you can make every year. Beginning 2018, the yearly limit for Individual Retirement Accounts is five thousand five hundred US dollars across all IRAs, and once you reach the age of 50, the limit will increase by thousand dollars.

To give you more specific explanation, below are the pros and cons of silver IRAs

Pros:

Safety against inflation and chaos

Silver has a safeguard against economic volatility and inflation. While the values of currency may devalue and fall over time, the value of silver has been growing over time. Over the last century, a silver dollar has delivered a tenfold return, compared to the value of dollars which unfortunately fell 90% in comparison.

Investing in silver is like protecting your savings for your retirement in the event that the currency declines.

Diversify your portfolio

Most of the Individual Retirement Accounts are made up of paper assets like bonds and stocks, meaning, they are prone to extreme markets. Meanwhile, silver is sought after and it holds its price very well over time.

Investing in silver is like keeping yourself away from the volatility of paper investments. In case the market crashes, the value of the metal remains and can be stronger.

A good diversified portfolio contains investments that are not related to each other, for example silver coins and stocks. So, one asset won’t get affected with the market condition of the other.

Cons

Returns of silver investments are limited to capital gains

Investing in silver won’t give you dividends, interest or rent. For example, in stock investing, you can credit the yearly dividend check to your Individual Retirement Account, which is growing without any tax until the time you retire.

You also have the liberty to reinvest the money and get to enjoy the benefits of compounding, wherein the interest you earn will also earn interest. Compounding helps a lot in growing your retirement funds quickly.

Compared to silver, the only return you can enjoy from it is capital gain from higher silver value. Just like with any investment, higher value in the future is not 100% guaranteed.

Limiting of holding your silver

One of the reasons why you want to invest in silver is because you can get to own a tangible and real asset. Unfortunately, this is only partially true in this type of investment. Yes, you can invest and buy silver, but the IRS does not allow you to bring it home.

When you invest in silver, you need to hire a custodian or a trustee to hold the silver on your behalf. Actually, hiring a custodian takes you away from the headache of arranging insurance, buying silver, storage of the bullion and physical transport of the silver. They will be the one to find a safe or a third party storage to keep your silver.

But since you are not physically holding the silver, and you do not actually see it, you cannot confirm whether there is real silver in your possession until it is time that you need to sell it to someone else in the future.

To avoid yourself from getting scammed, it is highly recommended that you do your research before hiring a custodian to manage your silver IRA.

It comes with fees and costs

Once you have found a custodian to hire, the application or filing to buy silver will come handy. But you have to be ready as you will not only pay for the service of the custodian but you also need to pay for the storage fee which most of the time ranges from about $250 up to $500 yearly.

To enjoy interest, you have to wait for the silver’s value to increase so it can cover all the fees you have paid and you can also get investment returns in the end.

When you grow older, it is your responsibility to take care of your future, particularly when you reach your retiring age. Retirement preparation involves a lot of investments, and this investment should start today if you want to enjoy a big yield of returns as you retire.

Taking advantage of the IRA is necessary if you want to get the most out from your earnings. IRA or Individual Retirement Accounts are savings accounts for your retirement that offer tax advantages and a lot of other benefits. You can open this type of account through an online brokerage, a personal broker, an investment company or through a bank.

Some of the things you need to know about IRA are:

– There are 4 types of IRAs, and this include ROTH IRAs, traditional IRAs, Saving Incentive Match Plan for Employees (SIMPLE) IRAs and the Simplified Employee Pension (SEP) IRAs.

– Money or any investments invested in Individual Retirement Accounts cannot be withdrawn before you reach the age of 59 and a half without paying a huge amount of tax penalty, which is 10% of the total amount you will withdraw.

– There are yearly income limitations that will apply to deducting contributions to the traditional IRAs and contributing to the Roth IRAs.

– IRAs are for long term retirement savings accounts. If you decide to take it early, you will defeat the purpose of investing in it by declining your retirement assets.

More about IRAs are silver IRAs. More and more aspiring retirees are interested in silver IRAs simply because they know the value of silver and they also want to invest in other tangible assets and not just on paper assets, like bonds, stocks, etc.

But since Silver IRAs are getting more popular in recent years, there are a lot of confusions surrounding the regulations that govern them. If you are a new investor, you might think that it is just easy to start up and manage it. You might also believe that silver IRAs will allow you to withdraw money from your account and buy yourself silver bars and coins from a shop.

Also, there are some who think that they can keep their silver at home or anywhere they want, and show it to their friends if they want to. There are a lot of specific things about silver IRA you need to know before pursuing it. Failure to learn more about the regulations will end you up disappointed, worse, penalized instead of earning from this investment.

To help you understand more about silver IRAs, reading below is strongly advised.

Rules on Silver IRA Rollovers

Rolling over the fund from a traditional IRA that is already existing should be done according to a specific timeframe. There are two options, one is the administrator handling your old account will connect with a silver IRA administrator or two, the administrator of the old account will give you the balance you asked from your old IRA by check.

If you decide on considering the latter, it is important that you move these funds immediately to the new silver IRA administrator. One of the rules of the IRS or Internal Revenue Service, is that the account owner should finish the financial transfer in just sixty days.

When you failed to follow the 60 day allowance, the IRS will not treat the transfer as rollover but as distributions.

Also, you are only allowed to do the rollover more than once in a year. Although, the limitation does not apply to transfer of funds from an existing IRA to an already existing silver IRA.

Rules On The Silver That Are Allowed

Just so you know, not all kinds of silver counts are allowed in this IRA. There are particular coins that you are allowed to choose from. Coins that the Internal Revenue Service labels as “collectibles” are not allowed to be held in the silver IRA.

If they are certified or graded by one of the accredited grading companies, these coins are also not allowed.

The lowest level of purity for silver coins is 99.9% pure. There is also a permitted list of mints from which the coins can come from. The silver coins that are allowed in the IRA are 1 ounce versions and larger.

Rules On Custodial Maintenance

A custodian or a trustee is an essential part of owning a Silver IRA. The rules are very strict on this requirement. You have to remember that you must not have the silver stored in your custody. To have this type of IRA properly maintained and set up, you are obliged to choose from one of the approved silver IRAs custodians to handle your account and store your silver bars and coins.

If you decide on buying your silver from a shop selling them and then transfer it to your administrator, do not think that the metal will be considered valid, as it won’t be. It cannot be included in your IRA because by doing this, you are not following the rules set by the IRS.

Even keeping the silver for just one day, you are invalidating the inclusions of the silver for the Silver IRA. If you violated this rule, the IRA money you use to get and store the silver will then be considered as a distribution from your account, hence, will be subject to taxes and penalties.

If you want your IRA account to operate and progress, you need to allow the IRA administrator to take charge of literally all the transactions on your account on your behalf. You can give them the sell and purchase orders and they will be the one to buy the silver and once obtained, they will send it to the 3rd party depository you chose, where it will be stored and insured.

Some of the silver IRA administrators are accredited as depositories as well, but this is not as usual. Most administrators are working with one or few of the major, accredited national depositories. There are only a few things you are directly involved in your silver IRA, and these are, giving orders to your administrator so they can work on distributions, disposals, and acquisitions. There is also a chance that they may give you advice for transactions as such.

On the side of the depositories, they also have rules they need to adhere to in order to comply with the regulations set by the IRS for Silver IRAs.

Before they can be considered as IRA storage facilities or vaults, they need to be approved by the IRS first. They need to charge yearly storage fees, so they can take IRAs. They are obliged to hold silver metal in vaulted locations that are insured until the time you decide on selling your silver.

Rules About IRA Distributions and Contributions

Contributions are being handled with Silver Individual Retirement Accounts same as how traditional IRAs are being handled. The contribution rules in the IRS are the same. For any year, a limit is applied on up to how much you can only contribute on that specific year.

In the year 2015 and 2016, the dollar limit amount is five thousand five hundred dollars for silver IRAs, which are actually self directed IRAs, and the same limit goes with the rest of the other forms of IRAs.

There is actually a provision given to individuals who are not up to date with their investment and are more than 49 years of age. This being the case, the limit increases to $6500 every year, and this is to give assistance to those who want to catch up with their retirement savings. In the case that you exceed more than the $6500 mark, the exceeded fund will be taxed at a rate of six percent every year until the time you withdraw your money.

In terms of the rules for distribution for Silver IRAs, the rules are just the same compared to all other IRAs. At any time you want, you can sell your silver without any penalty, as long as the funds of the silver remain in your IRA account.

If you decide on selling your silver, then take the funds as a distribution before your reach your retirement age, then it will be treated as a distribution and will be penalized and taxed as early withdrawals.

These Individual Retirement Accounts will also allow you to have your custodian send the silver to your house. This will also be considered a distribution and the taxes of it will be based on the amount of the silver on the time you will take the silver out of your silver IRA.

Soon, when you decide to sell your silver, all and any gains will be taxable at a capital gain rate of 28%.

Now that you know much about silver IRA, you are now ready to invest in it. Make sure to follow the regulations set by the IRS as through this, you can enjoy all the benefits you can get from this investment.

Are you thinking about adding diversity to your portfolio? Right now, it’s the perfect time because inflation is running rampant and it’s an excellent hedge against it. Gold is considered a safe haven keeping investor wealth protected during tumultuous times.

It’s never easy to come up with the right investment strategy if you ignore precious metals investing including gold, silver, platinum, and palladium. Without these investments in your portfolio, you risk profitability during times of inflation and economic turmoil. You also need to add a fair balance to your risk and reward ratio.

That said, learning how to invest in gold should always be a top priority on your to do list. Why? I’ll tell you why gold is valuable, why it’s a good investment, and share some of my favorite gold investing touch with you today.

Keep reading to discover more.

The True Value of Gold As an Investment

Many investors often wonder why gold is valuable and this is especially true in the beginning. Historically speaking, there is a huge demand for gold and there has been for many millennia. 

Right now, half the gold in the world is used to create jewelry. Around 40% of the gold is used to meet the demands of investing in physical gold like gold bars and gold coins. The technology industries including the medical industry have a major use for gold and silver, which makes up the last 10% of the demand.

As you can see, it isn’t surprising that gold is such a valuable and popular investment. And it shouldn’t shock you that the value of gold continues to increase precipitously over the decades.

Are you convinced that the world considers gold a valuable commodity? You bet your bottom dollar it is and it’s going to remain that way for many years into the future. That’s what makes it such an incredible investment opportunity. This is especially true during times of economic strife and massive inflation.

The Reasons Why Physical Gold Is an Incredible Investment

Before I share my reasons with you below, please keep in mind that whenever I say gold is a great investment, I’m always talking about physical gold in the form of coins, bars, and rounds. Paper assets like gold stocks in gold ETFs certainly have their place, but they aren’t nearly as valuable as the true physical commodity.