The Tax Payer Relief Act, adopted in 1997, has made precious metal investment possible into Individual Retirement Accounts (IRA's). Accepted metals are now silver, gold, platinum and even palladium, although the most popular kind of investment is in gold. There are many reasons why a gold IRA account is a wise choice for the future.
Money, as it is recognized by the world, consist of pieces of paper or coins. The total amount of money released on the market by a government must not exceed their value in gold. Even if countries can print the amount of money they are willing to, the amount of gold in the globe varies only slightly, as resources are limited. When a currency loses its value, or when stocks decrease in value, the price of gold arises.
This is why many individuals decide to invest in gold when it comes to their individual retirement accounts. It is important to have financial stability once you no longer need to work, so a proper balance between your retirement funds, properties and other valuable assets must be accomplished by then.
There are a few simple steps needed in order to invest in a gold IRA Account, as detailed below:
IRA Account Type
The first thing you need to determine is what type of IRA you have. Even if there is the possibility to make changes, some accounts are not compatible with precious metal investing. Still, the traditional, roth, Simplified Employee Pension (SEP) and Simplified Incentive Match Plans For Employees (SIMPLE) IRA accounts have the option of gold investing.
Finding the Right Custodian
This step is important, because even if there are many expert custodians available, not all of them understand the importance and the implications of gold investing. Look for a custodian with experience in precious metal investment and choose based on recommendations, credentials and expertise.
Funding Your Account
Funding an IRA account with the purpose of gold investment can be made by a simple transfer from your current account or even from a 401 (k) or a company retirement account. A certified custodian will be able to guide you through the entire process, without hassle.
Decide What You Want To Buy
Investing in gold does not necessarily mean buying gold. Another option is to buy gold mining stocks, so discuss it with your custodian and follow their advice, as they will understand the market better.
Keeping Your Gold Safe
This is the most important part when going to invest in gold. It is mandatory to open an account with an IRS-accredited depository in order to keep your gold IRA investment. Personal handling and keeping the gold is prohibited by the IRS, as you are not able to provide insurance in case anything should happen. Also remember that not every piece of gold is in compliance with IRA accounts. The safest method is to invest in gold and silver bullion that has 99.9 percent purity, or coins like the Canadian Gold Maple Leafs, the Austrian Philharmonics, the Australian Kangaroo Nuggets and the American Gold, Silver and Platinum Eagles.
Even if investing in a Gold IRA Account is advisable, a balance between money and precious metals must be kept at all times. The economy sometimes evolves unpredictably, so having multiple options when you retire is advisable. A balance of between 10-20 percent is often recommended by most custodians and gold market advisers, keeping in mind that trade has always been – and will remain – the most profitable source of commerce.