Investing In A Gold
IRA
Having a retirement nest egg that can
withstand the tribulations and uncertainties of the economy is important, and
it is for this reason that many would-be retirees are adding a gold IRA to
their investment portfolio. But what exactly is gold IRA and should you
consider investing in it?
A gold IRA is a type of individual
retirement account that makes it possible for the investor to own physical
gold, silver, platinum and palladium. This allows the investor to diversify
their portfolio away from paper-based assets such as cash, stocks and bonds.
There are certain rules and regulations that govern what gold can be held in an
IRA, and these include meeting the fineness standards of IRS. It is also
important to note that investors do not stash their gold bars in their homes;
rather, they are stored in an IRS-approved depository.
The reason why many investors are
turning to gold is because of the security gold offers as far as inflation is
concerned. If an investor relies on a portfolio that is based on stocks, mutual
funds and so on, they will be badly hit when inflation strikes. Gold prices
usually move in the opposite direction of paper assets in the event of
inflation, which implies greater investment security.
If you are looking to put IRA funds into
gold, you have to establish a self-directed IRA which is a type of IRA that the
investor manages, and which allows investment into a wider range of products.
For a gold IRA, you will need a broker to buy the gold and a custodian to create
and administer the account. Custodians are usually banks, brokerage firms,
credit unions, trust companies and other associations that have been approved
by Federal or state agencies to provide asset-custody services to investors.
The company you choose as your custodian will store or hold your actual gold.
Usually, your custodian will not select
dealers for you. But since the custodians have established relationships with
metal dealers throughout the country the country, you can request that they
share the list of dealers with you. Alternatively, you could approach a trusted
metal dealer and ask them to recommend a good custodian. The bottom line is
that you, as the consumer and investor, get to choose who you wish to do
business with.
When choosing a company, go for one
which is transparent about their charges and one which has a proven track
record. Also, go for a company which is flexible about meeting individual needs
and one that meets all qualifications in terms of licensing and certification.
Now before rushing into setting up a precious metals IRA, it is best to look at the as many as posisble and compare them. There are a number of steps you can take to compare gold IRA companies and it is wise to follow all the steps before taking action.