Precious Metals for Your IRA
by Ann Siford, Manager of Professional Network at Equity Trust Company
Precious metals have long been considered one of the few ways to protect assets from high inflation and economic uncertainty. Clients are investing their IRAs in gold, silver and more…
The only thing certain about today’s market is its uncertainty. To mitigate this questionable time, more clients and their advisors are seeking precious metals as an asset class to further diversify their retirement portfolio. Precious metals are often attractive to investors because of their liquidity.
A self-directed IRA can hold gold, silver, platinum and palladium bullion which meet minimum fineness requirements. This extensive range of approved precious metals provides clients’ portfolios with added diversity and more opportunity for extraordinary tax-deferred or tax-free growth for retirement savings.
Many are familiar with Gold Eagles as an approved investment by the IRS, but the list of eligible gold coins extends to gold coins that are at least .995 fine (99.5% pure) and legal tender coins. This provision makes Canadian Gold Maple Leaf coins, Australian Kangaroo/Nuggets and Austrian Philharmonics; Credit Suisse – Pamp Suisse Bars .999; and U.S. Buffalo Gold Uncirculated coins (no Proofs). Additionally, bars and rounds produced by manufacturers accredited by Nymex/Comex, LME, LBMA, NYSE/Liffe/CBOT, and ISO-9000 or a national mint for bars are acceptable. The minimum finenesses for all bars are: Gold .995+, Silver .999+, Platinum .9995+, Palladium .9995+. Coins, including the American Eagle, that have undergone “certification” (also known as slabbed coins) are not acceptable in IRAs at this time.
Eligible silver coins include Silver American Eagles and silver that is at least .999 fine such as Royal Canadian Mint's Silver Maple Leafs, Australian Kookaburra coins; Austrian Vienna Philharmonic coins; Canadian Maple Leaf Coins; and Mexican Libertad coins.
Platinum American Eagle coins; Australian Koala coins; Canadian Maple Leaf Coins; Isle of and Man Noble coins are acceptable investments within an IRA. Platinum and palladium bars and rounds meeting the fineness requirements noted can also be held within eligible retirement accounts.
Presently, the unapproved precious metals include:Austrian 100, 20 and 10 Corona; Belgian 20 Franc; British Britannia, Chilean 100 Peso; Columbian 5 Peso British Sovereign; Dutch 10 Guilder; French 20 Franc; Hungarian 100 Korona; Italian 20 Lira; Mexican 50, 20, 10, 5, 2 ½, and 2 Peso; Rare or Collectible Coins; South African Krugerrand; Swiss 20 Franc; and 90% American Coinage.
Process Requires Custodian and Storage
Investing in precious metals with a self-directed IRA is similar to traditional investing in precious metals with a few exceptions, including that most traditional custodians cannot hold the asset within the retirement account. Clients also cannot personally hold the investment, as the IRA “owns” the asset and is required to hold the asset. Therefore, most custodians will provide storage facility services as part of their offerings to meet this requirement.
Once your client establishes a Self-Directed IRA account with a custodian approved to hold precious metals, the advisor or client purchases the precious metals from the broker or dealer of their choice. Upon receiving an itemized invoice showing the type and quantity of precious metals purchased and the respective purchase price, the client or designated representative signs the invoice along with any required direction of investment forms for processing by their custodian. The custodian will then remit payment to the broker/dealer.
As clients increasingly look for options to market volatility and explore alternative assets, precious metals investing is one option that offers liquidity, control and diversification for a client’s portfolio.
Ann Siford is Manager of the Professional Network at Equity Trust Company, a custodian specializing in the investment of retirement funds in alternative assets. The Professional Network provides professionals in the self-directed retirement account industry with educational resources, access to expertise from peers and industry experts and targeted promotional tools to aid in expanding their business.
For more information on the Professional Network, contact Ann at 1-888-382-4727 x255 or visit http://www.trustetc.com/pronetwork to sign up.
Disclaimer: Equity Trust is a passive custodian and does not provide tax, legal, or investment advice. It does not endorse or recommend any contributor, company, or specific investments. Any information communicated by Equity Trust Company is for educational purposes only and should not be construed as tax, legal, or investment advice. Whenever making an investment decision, please consult with your legal, tax, and accounting professionals.