Investing in gold and other precious metals is becoming more and more popular these days. Thanks to the changes done to the gold IRA rollover rules in 1997, people can now include precious metals in their IRAs. The fluctuations of the values of most currencies make it very obvious why people are putting parts of the money into gold. Through the years, only gold and precious metals were able to withstand economic downfalls, which mean those who have more gold have more secured futures.
IRAs or Individual Retirement Accounts are among the useful schemes that most people use to save money. Workers may opt to put a certain amount of their monthly salaries to their accounts. These accounts cannot be accessed until employees turn 59 and a half, which is a good way to ensure that they have accumulated a large sum of money by the time they stop working.
IRAs are not limited to monthly salary contributions. They can also include bonds, mutual funds, real estate, stocks and money market accounts. Before, precious metals cannot be included in IRAs, but amendments in 1997 made it possible for people add gold and related investments into their IRAs.
Gold IRA Rules
Although precious metals like gold can now be included in your IRA, you have to keep in mind that there are still rules to follow. Knowing what these guidelines are will help you save time and effort, especially if you’re planning to invest soon. These are not all the rules, but these basics will answer most of your questions regarding IRAs.
Communicate with Your Custodian
There are various types of IRAs, thus, you have to know if your plan allows you to include precious metals in your account or if you need to open a dedicated account for them. There are banks, financial institutions and insurance companies that can handle gold IRAs, but not all of them can. If you are unsure about the rules of your account, contact your custodian right away to know what your options are. You don’t literally need to purchase gold and hand it over to your custodian. You just have to plan carefully with him or her and give all the necessary instructions so he or she can invest a part of your savings into the precious metals that you like.
Only Use an IRS-Approved Depository
Your precious metals should be stored in an IRS-approved depository and not just beneath your bed or your attic. Most companies charge fees annually, but you don’t really have to think about that because these fees are used to keep your investments safe. They will be kept there until such time that you decide to trade them or sell them.
Your IRA must be funded with cash. Your yearly contribution may be up to $5000, which can increase to $6000 as you turn 50 years old. Should you opt to transfer your funds to another plan, you need to discuss the details with your custodian to know if the said account is qualified. Take note that transfer procedures can be difficult, which is why you really need to plan things carefully with your custodian to avoid mistakes and hassles.
In some cases, people are allowed to use their IRAs even if they have not yet reached 59 and a half. Some examples are: IRA holder is disabled, IRA beneficiary starts getting money from the account before the holder dies, IRA owner is unemployed and cannot pay for the insurance fees, an immediate family member of the IRA holder needs money to pay for qualified education, IRA holder gets hospitalized and doesn’t have any other source of funds and other scenarios that IRA companies may find qualified.