A Gold IRA Explained
A gold IRA functions exactly like any other IRA account for tax purposes. The big difference between a gold IRA and a traditional IRA account is how the money is invested. While most IRA accounts are invested in mutual funds containing a mix of stocks and bonds, gold IRAs invest in one thing and one thing only: physical gold. A gold IRA is held entirely in the precious metal of gold, or silver, platinum or palladium.
What An IRA Is
An IRA is the common abbreviation for a qualified retirement account known formally as an Individual Retirement Account. An IRA is a savings account (usually an investment account) designed to be used for retirement. This type of account is classified by the Internal Revenue Service as a Qualified account. This means that contributions are tax deductible, and withdrawals are taxable.
Contributing to an IRA
Contributions may be made until the year in which the owner turns 70 and 1/2 in a traditional IRA plan, and there is no age limit on contributions to a Roth IRA plan. People may contribute a tax deductible amount of up to $5,500 per year, until the year in which they reach age 50. In the year in which the owner reaches age 50 until the maximum contribution age, the owner may save an additional $1,000 per year, making the annual limit $6,500. People may also roll over the balance of other retirement accounts such as a 401k into an IRA.
How People Invest IRA Accounts
Usually Stocks and Bond Mutual Funds
An IRA account is usually an investment account, in which most people invest in a holdings of stocks and bonds (usually through mutual funds). While holdings in equities usually provide the owner the potential for significant growth, they also have an associated risk. Many people experienced this risk first hand during the crash in equity markets in 2008.
An IRA account does not have to hold only stocks and bonds though, owners have other options as well. Historically if someone was looking for safety, they would open an IRA at a bank and hold CD’s. While this is very safe, the return is extremely low, and may not even outpace the rate of inflation. Without growth, it makes it very difficult to save enough money.
Now You Can Invest in Physical Gold
Lucky for clients who believe in gold as an investment, there is a better option. People no longer have to choose between a risky equity portfolio, or an extremely low growth CD account. A gold IRA makes it easy for people to use their retirement savings to invest in one of the oldest and widely held stores of wealth, gold.
A gold IRA from Gramercy Gold functions like any other IRA, except for the innovative way that you can hold physical gold. A gold IRA invests in the hard asset of gold. Not a gold fund, or a gold derivative, but actual, physical gold.
You can take delivery of our gold right to your door, and hold it in a safe.
Choice Between Assets
Client’s have a choice of holding Credit Suisse gold bars, various coins (American Buffalo, Canadian Maple Leaf, American Eagle, Australian Kangaroo/Nugget Coins, or Austrian Philharmonic gold coins), or various other precious metals such as silver platinum and palladium.
We offer our clients a lot of choices because we care about a client’s feeling of security. We know that our clients invest in gold for the benefits of safety, liquidity, and their want for the tangible asset. We offer multiple solutions to fit every client’s need.
Why Physical Gold Is Better
The number one reason that client’s prefer physical gold to a fund that attempts to “approximately track the performance of gold” is that they know the physical gold is safe when they keep it themselves. They can trade or exchange it for currency or other assets at their own discretion, and take it with them when they travel.
Holding physical gold also eliminates management fees which would otherwise be charged when someone owns a gold fund. Over the long run, this makes physical gold advantageous.
At the end of the day, our clients simply demand the comfort of being invested in hard, physical gold.
Money Can Be Rolled Over
A gold IRA allows money to be rolled over from an existing IRA account, or other retirement account such as a 401k. You can roll all, or a part of an existing account into a new gold IRA account. The rollover is a tax free transaction.
Tax Deductible and Tax Deferred
Just like with any IRA account, any contribution (up to the legal limits) to a Gold IRA account is tax deductible. There is no limit to the amount of growth allowed, and any growth is completely tax deferred until money is taken out of the account. This makes saving money to a Gold IRA a tax advantaged savings method when compared to a non-qualified account.
If you would like to learn more about investing in a Gold IRA, please fill out our contact form today and we will be in touch with you very shortly.