Fast forward to the present day where IRAs have become one of the most effective ways to save and invest for life after retirement. These tax-advantaged investment accounts have diversified over time to better suit individual needs. The IRA Financial Group provides its clients with multiple types of IRAs including a Self-Directed IRA LLC, Solo 401(k), or ROBS Solution. Yet with all of these available options, many are still unaware that they can buy precious metals and other alternative assets using their IRA.
Traditional Investments VS Alternative Investments
Although the government has taken many steps in assisting Americans to save for retirement, there are still many concerns about debt and inflation due to the devaluing of currencies. This means that the call to diversify retirement portfolios has greatly increased over the years. This is where Self-Directed IRA plans come into play. They allow the IRA holder to make traditional and alternative investments.
Traditional Investments
Traditional investments are those that are commonly done through banks and other financial institutions. These include the following:
StocksBonds Mutual funds Cash or cash equivalents
Alternative Investments
Anything outside of traditional investments is generally considered an alternative investment. It is important to note that these come with different sets of returns and risks. These include but are not limited to:
Property Precious metals Cryptocurrency Private businesses
Alternative investments: Investing in Precious Metals
In the battle of traditional vs alternative investments, it seems that the growing favorable option is alternative assets due to their ability to diversify one’s investment portfolio. By choosing to use a Self-Directed IRA, an IRA holder is allowed to make both traditional and alternative asset investments. However, in this article, we want to focus solely on alternative asset investment, particularly in the precious metals industry. The following are the top 3 IRS approved precious metals that make for a good alternative investment:
Gold
This precious metal is probably the most popular choice of investment among all the other IRS-approved precious. The amazing thing about Gold is that even during times of inflation and ever-increasing uncertainty in current markets, it remains a highly attractive investment.
Silver
Silver is one of the more underrated precious metals, yet it has so many different applications. From the medical industry to the tech industry, silver has so many attractive industrial uses. Due to the impact of COVID-19, the price of silver has benefited from the reopening of factories in the U.S and other countries making it an even more profitable investment.
Palladium
Palladium is widely used in the automotive industry, electronics, dentistry, and jewelry. The price of palladium has been gradually increasing because of its increased use in reducing carbon emissions in automobiles. Considering that experts predict a further price increase, this makes palladium another worthwhile investment.
Opening a precious metals IRA
It is important to know that investing in precious metals using a Self-Directed IRA is not as easy as opening a traditional IRA. The IRA Financial Group is a custodian that can be used to hold your self-directed IRA to invest in precious metals. Here’s what you need to be aware of before making that decision:
Select a Precious Metals Dealer
Once you have chosen the IRA Financial Group as your preferred custodian, you can then direct them to transfer money to the precious metal dealer of your choice to purchase gold, silver, platinum, or palladium. Make sure to do thorough research when you choose a dealer, and that they comply with all relevant industry regulations and bodies.
Decide What Precious Metal Products to Buy
You may already know what you would like to purchase, but if not you can ask your dealer to make recommendations.
Choose a Depository
Since you are not allowed to store precious metals for your IRA yourself, your custodian will likely make a depository recommendation.
Finish the Transaction
With a custodian at hand, your precious metals dealer, and a depository, you can now finalize the purchase. Your IRA custodian will be responsible for handling payments, once that is done, your precious metals will be shipped to your depository.
Adding precious metals to your investment portfolio is a great way to increase wealth and diversify your portfolio. Precious metals are easy to convert to cash and are widely accepted all over the world. However, this type of investment comes with its risks. Working with the wrong custodian who charges account valuation fees can easily eliminate your profits. Thankfully IRA Financial Group charges a flat annual account fee that will ensure the profitability of your investment.
