A New Retirement Savings Trend Emerges

Guide to Precious Metals IRAs

Stock brokers and investment advisors typically won’t mention it (for reasons described by Money Metals columnist Guy Christopher), but it is simple to own something other than the run-of-the-mill paper assets they are paid so handsomely to sell into your retirement account. Nevertheless, word is getting out. Each year more people take the exit and open a self-directed IRA where they can hold tangible assets -- most often physical precious metals and real estate. As these self-directed IRA accounts gain in popularity, the firms providing them are improving the speed and convenience for customers making the switch. It is now possible to establish an account with firms such as Goldstar or New Direction IRA completely online -- no need to even print or mail the forms. Here is how a precious metals IRA works:

1. Pick a custodian and transfer funds -- tax free. There are a growing number of providers. We recommend using one of the well-established firms who can offer good customer support and nice tools (such as online enrollment). You’ll provide instructions for transferring funds from wherever your retirement account is currently held.


2. Lock pricing on the bullion products you want to hold, then complete a short one page form with the transaction details.


3. Choose where to store your metals. IRS rules require the assets in your self-directed IRA be held by a third party. The dealer will ship your metal directly to the depository you choose.

The fees for most accounts will be around $200 per year -- including the cost for storage. Larger accounts (in excess of $100,000) or accounts with many transactions may cost a bit more. That makes these accounts affordable for just about anyone. Holding gold, silver, platinum, or palladium bullion in an IRA is a great option for lots of investors who are worried about a significant portion of their wealth being invested in paper, be it stocks, bonds or cash. However, they will not make sense for everyone. A precious metals IRA may not be right for you if privacy, portability, and control of your metals are your top priorities. The value of your IRA accounts will be reported to the IRS annually and the metals will reside in a third-party vault. For these reasons and others, it is always a good idea to hold at least a portion of the metals you own directly. For those with IRAs heavily invested in financial assets, right now looks like a great time to switch at least some of those funds into hard assets. Paper assets currently sit very near multi-year highs. Stocks, bonds, and even the beleaguered dollar have all seen big gains in recent years. Only the most ardent bulls expect that run to continue indefinitely. Clearly the relative valuations are reaching extremes. Could this ratio widen even more? Yes. Would we bet on it? Not likely.