To safeguard yourself against turbulent market conditions, it may be wise to dedicate a portion of your retirement account(s) to physical gold. Diversifying your portfolio is almost always a smart decision, and precious metals typically hold their value better than cash during high inflationary times like the ones many analysts expect us to experience once interest rates begin to rise.
With a Gold IRA, savings are invested in physical gold coins or bars. When you reach retirement age, the holder can either have their metals sent directly to them or be exchanged for cash.
When doing any type of investing, it’s important to do your research, know the right time to buy, how to manage your account, and what services are available to ease the process. Understanding these aspects can save you (and make you) heaps of money in the long run. Here are seven secrets to saving money on a Gold IRA or 401(k).
1. Make Sure a Gold IRA is Right For You
While it’s great to diversify with a Gold IRA, it may not be a good idea if you have a low account balance. Why not?
When you purchase gold for your IRA, the physical coins and bars are held at an ultra-safe and secure depository that’s approved by the IRS. Depositories charge both an annual account fee and a storage fee. Low balances may not be able to overcome these fees, even if the gold price is on the rise. In this case, a Gold IRA might not be right for you. Also, if the money in your retirement account is money you plan to live on in the coming months, gold may not be right for you.
2. Take Advantage of the Internet
Do a fair amount of research when it comes to investing your precious nest egg. While there are many services to help you through the process, knowing how the process works will provide an extra layer of protection against bad investments.
Finding the right dealer is a crucial part of the process. Use the Internet to search for a company with experience in the market. New firms haven’t been tested in unsavory markets, so experience can make all the difference.
You can also find reviews of dealers done by previous customers. Check out the Better Business Bureau and TrustLink for testimonials and other investors’ experiences with various gold IRA dealers.
3. Be Aware of Your Emotions
It’s exciting to be investing in gold. You can physically handle your asset. It’s not just a digital number on a screen. And you always know the cash value of the gold you purchased.
However, don’t let emotions cloud an otherwise monumental investment opportunity. Gold can be a very emotional asset, since its worth is often tied somewhat to the activities of politicians and the policies they set. Make sure your desire to invest in gold is based in facts, not emotion.
4. Watch the U.S. Mint’s Proof American Eagle Release Schedule
If you plan on holding your gold for a couple of years or more, you might consider using some of your IRA monies to buy American Eagle Proof gold and silver coins. These are the only collectable coins allowed inside IRA plans, and the U.S. Mint produces a limited number of these coins each year. Once the year’s supply runs dry, second-hand market prices tend to skyrocket. To avoid paying excessive premiums, find out when the U.S. Mint plans to release its next batch of Proof coins, and get in early.
5. Transfer vs. Rollover
When switching funds to a Gold IRA, you have two options: a rollover or a transfer.
When conducting a rollover, you can either opt for a direct or indirect route. With an indirect rollover, the funds are cashed out in a check and you have 60 days to re-invest them in another retirement account, or face lofty tax penalties. With a direct rollover, you never gain control of the funds and they are sent directly to your new retirement account. Either way, you must report the transaction to the IRS.
A transfer doesn’t involve any of those details. The funds are sent from one custodian to another, there’s no extra paperwork at tax time, and the IRS doesn’t have to be notified. Transfers are recommended as a hassle-free way to make the move to a Gold IRA.
6. Buying Bullion or Buying Proofs?
Answering this question is an important part of your investment strategy. The decision to buy bullion, Proof coins, or both is one that could make or break your golden years.
Long-term investors typically buy Proof coins, because they could grow in numismatic value as the years pass and they could be exempt from a potential government freeze of the gold market. The U.S. Mint only manufactured 35,000 one-ounce gold Proof Eagles this year.
Short-term (1-24 month) investors tend to gravitate to bullion as it has a lower premium which allows for faster exit times. If you buy bullion, the 24-karat Credit Suisse gold bars are recommended because they are pure gold and have the absolute lowest premium among IRA-approved gold. Bullion coins like Maple Leafs are pretty, but cost more while still buying back at bullion bar prices.
Warning: PCGS/NGS certified Proofs will NOT be accepted by IRA depositories.
7. Use the Certified Gold Exchange
On average, our clients save 2% over other discount gold dealers. We cover your 1st year IRA fees ($325) for IRAs over $50,000, and we provide experienced service to licensed dealers, institutions, and household investors.
More than two decades of trading have helped us maintain an A+ Better Business Bureau rating since 2003. Contact us today for free help diversifying your assets and saving money on a Gold IRA.
Recommended for you: Gold IRA Rollover Guide and Silver Investments.