Gold IRAs are a type of retirement account that can help you save and invest your money for the future. They’re tax-deferred, which means that all the interest and capital gains accrued in your account will be taxed as ordinary income when withdrawn. In this blog post by RareMetalBlog, we’ll discuss how gold IRAs work and why they might be beneficial to you!
How do gold IRAs work?
You can start a gold IRA by rolling over your existing 401(k) or individual retirement account to an approved gold company. If you already have one, the next step is to open up a Gold Bullion Custodian Account with them, and transfer funds from your current savings account into your new IRA account. As soon as you fund the IRA, they will purchase physical gold for you and store it in a secure bank vault. Withdrawal of funds can be made at any time after seven days have passed since the initial deposit was made.
How do I start?
First, you need to decide if a gold IRA is right for you and your situation. Of course, you can hold real physical gold or other precious metals like silver as part of your asset allocation strategy in an Individual Retirement Account (IRA). But before deciding on what type of account to open, you must know the pros and cons of each.
Different types of accounts:
- a) Gold IRA: an IRA backed by gold and other precious metals.
- b) Self-Directed Precious Metals IRAs: a self-directed account where you can buy, sell or trade physical metal bullion coins and bars. You’re also able to invest in mining companies that mine for these same types of metals.
- c) Gold IRA CD: a traditional IRA that allows you to invest in certificates of deposit (CDs). You can choose between short-term or long-term CDs, depending on your investment strategy.
- d) Exchange Traded Fund (ETF): an ETF is traded like a stock and tracks the price of gold bullion or other precious metals.
If you want to go it alone and do your research, we suggest that you look into what percentage of gold or silver the IRA allows as a single asset class (or “allocation”). You can also learn more about how precious metals are priced by checking out this article explaining paper vs. physical pricing.
In conclusion: Gold IRAs can be a great way to save and invest your money for the future, but you must do some research first to decide if they’re right for you.