A gold IRA or precious metals IRA is an Individual Retirement Account in which physical gold or other approved precious metals are held in custody for the benefit of the IRA account owner. It functions the same as a regular IRA, only instead of holding paper assets, it holds physical bullion coins or bars. The four precious metals allowed to be held in an individual retirement account are gold, silver, platinum and palladium. Investors often use precious metals as a long-term hedge against inflation, to diversify their portfolio.
Gold can be a powerful way to diversify your investment assets, and especially your retirement portfolio. For thousands of years, people have relied on gold as real wealth and as a ''safe-haven'' asset with attributes that simply cannot be matched by any other asset class. Unlike most paper assets, gold held in physical form, pure gold bullion, and gold bullion coins produced by government mints – carries no counter-party risk. As such, when you hold physical gold you are not dependent on anyone else to deliver on their side of a contractual obligation
If you are thinking about investing in stocks or any form of security, you are probably looking to see your money appreciate over time. For some investors, they want to enter the stock market so they lock in on many of the buzz-driven asset valuations currently driving the market's record highs. While this might make sense during the early or middle stages of a market recovering, this kind of investment strategy is a dice roll during the latter stages of a recovery. You just don't know when the bottom of the market will drop. This is precisely why any gold IRA trumps the competition. This type of IRA provides you with security against market crashes while giving you the means to come out of a market crash a winner.
There are a few things that make a gold-backed IRA different from other plans. For starters, these IRAs are self-directed. This means you make the decision as the account holder. A related difference is how you maintain assets. Stocks exist in the digital world; gold doesn’t. You have to actually keep physical gold and arrange storage for the gold through an investment firm (called the custodian or trustee by the IRS). As a result, you will have to pay a custodian fee that can cost $100 to $200 a year. You also have to buy certain types of metals. Gold, for example, must be in the form of 24-karat gold bullion bars with weights between 1 ounce and 400 ounces.
If you are the person who has always wanted to manage your accounts without being bothered by inflation or the failing economy, then gold may be the way for you. An investment in gold is insulated from the ups and downs of the economy. History has proven again and again that the only reliable investment is gold. When the markets collapse, when the currency falls, when you lose your hopes, gold doesn’t lose its shine. On the contrary, during the times of economic slumps, the value of gold seems to rise meteorically.
There are a few things that make a gold-backed IRA (link) different from other plans. For starters, these IRAs are self-directed. This means you make the decision as the account holder. A related difference is how you maintain assets. Stocks exist in the digital world; gold doesn’t. You have to actually keep physical gold and arrange storage for the gold through an investment firm (called the custodian or trustee by the IRS). As a result, you will have to pay a custodian fee that can cost $100 to $200 a year. You also have to buy certain types of metals. Gold, for example, must be in the form of 24-karat gold bullion bars with weights between 1 ounce and 400 ounces.
