Individual retirement accounts (IRAs) are very popular types of investments for retirement. There are two main types of IRAs, which are traditional IRAs and Roth IRAs), and these accounts offer tax benefits for investors. If you have an IRA, you will be free to purchase a variety of different types of investments, including stocks and mutual funds, but you may also be able to use your IRA investment to buy gold. Here are several things you will need to know before you decide to do this.
Which Type Of Gold Should You Buy?
When it comes to buying gold, there are two main types. The first type is physical gold, and this type is available in bars, coins, and jewelry. The second type is gold stock. Buying gold stock offers a way to invest in the gold market, without owning the gold itself. The prices of gold stock tend to fluctuate with the market, and they are based on how well gold mining companies are doing.
If you want to invest some of your IRA money into gold, you could choose either type; however, buying gold stock will be a lot easier than purchasing actual gold bars or coins. Buying gold bars and coins is an option though, but it will require some extra steps, and you will be limited as to what types of gold you can purchase.
What Steps Are Needed To Buy Actual Gold?
An IRA allows you to choose where your money goes, and one of your options is to buy gold with the money. When you do this, you will need to take a few extra steps, which will include:
- Choose an IRA trustee (also called an administrator) – This is a person that works for an investment firm, and he or she will be the person responsible for setting up your IRA account.
- Select the types of gold you want – When you purchase gold as part of your IRA investment, you will have limits and restrictions. One of these is that the gold must be 99.9% pure, and this goes for coins or bars. If you want coins, one option you could choose is American Gold Eagle Coins. There are other choices too, and your IRA trustee can help you find the right ones for your needs.
- Determine how much to buy – One important step in investing is making sure your portfolio is diversified. This method involves investing in a variety of different things, and gold could be one of those things. Your IRA trustee can help you determine how much gold you should buy to keep your account diversified.
These are the main three steps you will need to take to invest in gold with your IRA money. Before you make this decision, there are several things you should know first.
What Else Should You Know About This?
The biggest thing you should know about this type of investment is that you will not be able to store the gold yourself. The trustee handling your account will have to take responsibility for storing your gold for you. The trustee takes on this responsibility when he or she assists with this type of investment purchase. When you take withdrawals from your IRA, you will then be able to retrieve the gold you purchased.
Gold has been considered a valuable metal for many years, and it is not likely that gold will ever lose its reputation for this. If you are interested in purchasing gold for your IRA or for any other reason, you may want to talk a company that buys and sells gold.