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How to Buy Precious Metals Using a Self-Directed IRA

Investing in precious metals is an excellent way to diversify your self-directed IRA portfolio. If you’re already set up with alternative investment options like promissory notes and real estate, it might be wise to consider precious metals as well. Fortunately, the process for acquiring precious metals and holding them in a self-directed IRA is fairly simple.

How to Buy Precious Metals Using a Self-Directed IRA

Open and Fund a Self-Directed IRA

If you’re new to self-directed investing, the first thing you’ll need to do is open a self-directed IRA. There are quite a few benefits to using alternative investments to fund your retirement, and a self-directed IRA is the key to taking advantage of them.

To learn more about the benefits of a self-directed IRA, check out our free guide, How to Make the Most of Your Self-Directed Investment. Then contact the team at iPlanGroup to open your self-directed IRA.

Choose an Approved and Respected Depository

Once your account is up and running, you’ll need to take time to research where you’ll store your precious metals once you’ve completed your purchase. Storing your precious metals at home for any length of time will negate all of your IRA tax benefits and could result in a tax bill and penalties. Choose an approved depository to ensure your investment remains in compliance with IRS regulations.

Choose Your Precious Metals

After you’ve chosen your storage facility, take time to select which precious metal and in what form you’d like to purchase. Check into local markets for gold, silver, palladium, and platinum, and be sure to look at any regulations, laws, or technology news that might relate to your investment.

Purchase Precious Metals Using Your Self-Directed IRA

Once you know what you want to buy, it’s time to purchase your precious metals using your self-directed IRA and have the metals sent directly from the source to your depository. Under IRS regulations the self-directed IRA owner cannot take physical possession of the metal at any time. So be sure you have a plan in place during and after purchase.

Why Does the IRS Regulate Precious Metals?

The IRS regulations regarding precious metals are based on a single factor: fitness. The rules are designed to ensure a level playing field across different forms of precious metals. In other words, the rules are made to ensure an ounce of gold is worth about the same value as someone else’s ounce of gold. This “gold standard†applies to all four precious metals which can be held by a self-directed IRA: gold, silver, palladium, and platinum.

IRS regulations prohibit certain types of investments in a self-directed IRA including life insurance and collectibles. Many precious metal coins fall under the latter category of collectibles, and, therefore, do not qualify for the tax benefits associated with a self-directed IRA. For this reason, it is paramount that self-directed IRA owners understand the rules and regulations regarding precious metals and what does and does not constitute a “collectible.â€

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