Precious Metals IRAs – They’re Easier Than You Think! (25/9/2017)

Many invest in precious metals to diversify their portfolios and hedge against global turbulence. Volatile markets and an ever-evolving political climate have produced a new awareness of alternative investment options and the peace of mind provided by physical asset ownership. Individual retirement plans have also emerged as popular vehicles for promoting long-term financial success. Some may not know that precious metals can be incorporated into self-directed IRAs.

The precious metals IRA tool for investing has grown dramatically in popularity over the past five years. Adding IRS approved metals to an IRA will involve minor considerations, but transaction procedures have become more efficient and technology has developed to empower investors like never before. Furthermore, IRA providers like New Direction IRA are available to support investors through every step of the process.

You would begin by opening and funding the self-directed account of your choosing (Traditional IRA, Roth IRA, etc.). Each account type offers unique tax benefits, so you’ll want to conduct your due diligence and determine which account will better suit your overall approach. Once established, you may fund your plan with a transfer or rollover from another retirement account. You may also deposit personal funds via contribution.

Now that your IRA is funded, you, the account holder, choose the particular products that you would like your account to acquire.

Choosing the Items

Sprott Money offers a wide variety of familiar and IRA-eligible items. Such items include coins, bullion, and even proofs. Specific purity requirements exist for allowable items, but many products satisfy the minimums:

• Gold: 99.5%
• Silver: 99.9%
• Platinum: 99.95%
• Palladium: 99.95%

Gold American Eagle coins fail to meet the purity minimum for gold, but they may still be owned by an IRA per the Internal Revenue Code (IRC). Collectibles are key exceptions; they are not allowed in your IRA.

Making the Purchase

When you use your personal money, you pull out your wallet to purchase coins. When you buy with your IRA, you pull out your computer or phone. Because your IRA’s money is held in your self-directed IRA, you must authorize your IRA provider to allocate IRA cash to complete the precious metals transaction. This authorization may occur as part of opening an IRA through the online IRA application or via a specific Buy Direction Letter. You’ll also need to submit a Depository Election Form, which is a simple one-page document that allows you to designate your preferred facility and method of storage. Upon submission of these materials, you may contact your Sprott Money representative to determine the terms of the purchase just as you normally would.

Once we have been notified of your purchase agreement, we’ll wire the funds to Sprott Money, establish the storage account on behalf of your plan, and await delivery confirmation from the depository. Once confirmation is received, we’ll update your myDirection® portal to reflect your holdings and provide up-to-date fair market values of your items.

Receipt of Items

Please note, the IRC prohibits individuals from personally holding IRA-owned precious metals, thus the choice of a depository or qualified third-party trust entity. While personal possession may provide a particular level of comfort, storage facilities today feature state-of-the-art security and insurance as well as other attractive features. New Direction IRA has maintained relationships with a number of depositories for many years to meet the needs of account holders.

Future Transactions

As with personal investments, you may purchase additional items or sell/exchange current holdings on behalf of your plan at any time. Many of these transactions may be initiated online through your myDirection® portal in the same manner as a purchase. Also remember that you’re under no obligation to sell your metals prior to distribution. You have the option of distributing your physical assets in kind, at which point they would become your personal property.

Supplementing your personal investments with tax advantaged IRA precious metals is easier than ever. Streamlined processes continue to advance and the Precious Metals Asset Team at New Direction IRA can assist you every step of the way.