The stock market is very risky. There have been two major stock market crashes since 2000. The crash of 2008 wiped out many people’s retirement portfolios. There are many financial experts who suggest to diversify into precious metals. The most popular metals are gold and silver. It is now so popular that the IRS even allows people to include gold bullion in retirement accounts.
If you are looking to invest in gold and want to purchase some for your IRA, then you have to understand which coins are appropriate. The IRS does not allow all gold coins to be used in an IRA account. Only certain types of gold coins are allowed into an tax sheltered accounts.
What Type Of Coins Can I Buy?
The first thing to understand is that only gold bullion can be used in an IRA account. You cannot purchase collectable coins such as the old numismatic coins. The IRS only allows bullion coins meeting certain purity levels. They also limit the types of bullion. The gold bullion coins must be 99.9% pure or higher, such as the American Eagles or American Buffalo gold coins. These coins are sold as stores of gold and not traded as collectible coins like many numismatic coins.
What Size is Best?
In order to own gold coins in your IRA account you will have to purchase an American Eagle or Buffalo. You can purchase them in different sizes. Some people purchase the largest size, the 1-ounce. Other people purchase the 1/10 of an ounce. It is usually a better deal to buy the 1-ounce coin, but some people invest a little at a time so the 1/10 is their preferred method. The advantage of purchasing the Gold Eagle or Buffalo in 1-ounce lots is that you will pay a lower premium and they are easier to catalog.
What About Foreign Coins?
While some people look for deals when it comes to bullion and purchase Chinese or Mexican bullion, these coins are not allowed in an IRA account. They do not have a high enough amount of gold. Likewise, the Krugerrand, which has always been a popular choice, is not allowed into an IRA account. It is perfectly fine to own high grade forigen bullion, such as the Krugerrand, but you cannot own them in an IRA account.
How Do Keep My Coins Safe?
So, you have the option of buying either the American Eagle or the American Buffalo. Most financial experts suggest that you purchase bullion in 1-ounce size lots. The next step is to find a trustee account. The IRS does not allow people to personally keep their gold coins if they want to include them in an IRA plan. If you simply want to own gold coins, then you can keep them in your home. But if you want to include them in a tax-sheltered account such as an IRA, then you will need to find a trustee account. These are places where you will send your gold coins and they will hold them. They charge a very small fee for this service.
How do I get started?
If you have a retirement account such as an IRA or 401k, you can roll them over to gold and silver today. Most firms require a minimum investment of $5,000 while some require $10,000 or more in order to open a precious metals IRA. We highly recommend that you do your research online and find the best rated firms to work with. Be careful as some companies have been accused of fraud and are currently being sued. Check out this article to learn how to find the proper IRA company, or request our free kit on the right hand side: what to look for in a gold IRA company.