Precious metals seem to be where every investor wants to go after having tried their hand at various investment options. This is because if you look at the historical trend for precious metals, their value seems to have gone up in general. Your retirement savings can be invested in precious metals as well. You should be aware of just a few important things before you opt for this kind of retirement plan.
What kind of metals can you use?
Many people call this particular type of IRA the “gold IRA.” This can be slightly misleading since these IRAs can consist of investments in 4 different kinds of precious metals: gold, silver, palladium, and platinum. These metals are known to have a relatively stable price over the centuries and are believed to be less volatile than some of the other things in your investment portfolio, such as stocks.
What percentage of your IRA investments should be in precious metal?
There is no one size fits all approach for these questions. However, one thing is for sure. No financial expert will tell you to invest all of your money in a precious metal IRA. This is for numerous reasons. Firstly, any good retirement investment portfolio should have a bit of diversity.
So just having precious metals in it can be a bit of a bargain since they cannot produce as much profit as stocks. Secondly, even precious metal values can tank. So there is a possibility that your IRA could end up going towards a loss because of global market conditions if you only end up investing in metals. So it’s better to check precious metals IRA reviews before going in.
What are the logistics of such an account?
Your precious metal IRA is essentially a self-directed account, which means that you have a great degree of control over the investments that you make from this account. Once you have decided to have such an account, approach a custodian who will hold the account for you. These custodians can be trusts or banks approved by the IRS. Then pick an IRS-approved depository in which these products can be stored.
The next step is to contact a precious metals dealer and pick which products you want to buy. The gold product should be 99.5% pure; silver ones must be 99.9% pure, while palladium and platinum ones must be 99.95% pure. Once you have chosen the products, tell your custodian to purchase them on your behalf and put them in the depository. Simple, right?
Is precious metal IRA worth it?
The answer to this question is yes; precious metal IRAs are worth it. However, like any prudent investor, you should always keep your options open and not put all your eggs in one basket. Even precious metals have their risks, so your retirement savings should consist of more than just them.
A precious metal IRA can help you set off some of the disadvantages that come with stocks and act as a hedge against inflation, making them worth it. Just remember that they should never be your sole option.
We hope that our guide on precious metal IRAs has helped you understand the mechanics of this type of retirement account. While they are a bit complex, they are a great way to diversify your portfolio.