A gold IRA and a precious metals IRA are two different types of Individual Retirement Accounts. The former holds physical gold bullion while the latter contains IRA-approved precious metals. Both functions exactly like a regular IRA. Here are a few key differences between the two. A gold IRA can help you build a substantial savings fund with little to no hassle. Read on to learn more.
Gold IRA
A Gold IRA is a type of self-directed retirement account that allows you to invest in physical gold and precious metals. Traditionally, an IRA can only be used for stocks and bonds, so it's difficult to add precious metals to your portfolio. With a Gold IRA, you can invest in physical gold, silver, platinum, and palladium. You can buy one-ounce gold bars and invest in the coins.
A new company that has been providing Gold IRA investments for a few years is Lexi Capital. This company was founded by UCLA students in 2010 and provides investors with information about precious metals and personalized portfolio plans. Its services include real-time market analysis and a personalized investment plan. This company has a number of benefits, including a customer-friendly interface that helps you understand gold investments. You can even choose to have your IRA transferred to another company, if you prefer.
Traditional IRA
The IRS allows you to invest in precious metals in your IRA, but only in coins that meet certain standards. Gold American Eagles and Canadian Gold Maple Leaf coins are two examples of acceptable precious metals. Precious metal bars must also meet certain standards, such as 99.9% purity. Moreover, your IRA custodian may have relationships with specific dealers that you can work with to select the most suitable products for your IRA.
While rare coins are not eligible for inclusion in your IRA, you can invest in mining stock or precious-metals-related paper investments. You can also invest in ETFs, commodity futures, or mutual funds related to precious metals. Paper investments may offer higher liquidity and less risk. You may also want to consider an exchange-traded fund if you can't find an appropriate precious metals-IRA.
Roth IRA
While many IRA owners claim that the US Tax Code allows them to keep their metals in their personal possession, the IRS requires them to be held in a custodian or trustee. These entities are banks, federally insured credit unions, savings and loan associations, or other entities that are approved by the IRS. There is a loophole in the US Tax Code, however, that may allow IRA holders to hold precious metals in their own possession. For these reasons, Midas Gold Group does not recommend owning precious metals in this way.
A good way to invest in precious metals through a Roth IRA is to buy the common stock shares of mining companies. Mining companies do not pay federal income taxes on these common shares. The largest mining company is Barrick Gold Corporation, which produces gold in 13 countries. But investing in precious metals through a Roth IRA will still result in taxable distributions, which is why you should seek financial advisors for guidance.
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