Self-Directed IRA for Precious Metals

Self Directed IRAs

Self-directed IRAs are individual retirement accounts that give the owner complete control over their own choices. Unlike "other IRAs", your investments in a self-directed IRA aren’t limited to stocks, bonds, or mutual funds.  You can take advantage of alternative assets such as gold, platinum, silver, and palladium.   

A Precious Metals IRA is no different than any other IRA.   You can make your annual contributions, you can sell your metals, and when the time comes you can take distributions as cash or the physical metals themselves.  

 

3 Reasons to use self-directed IRAs to invest in precious metals

• Precious metals are a great way to diversify your overall portfolio and its generally understood to help you avoid risk in times of unstable markets and inflation.
• Self-directed IRAs are given protection under federal bankruptcy laws.
• They allow the distribution of assets to beneficiaries after the owner’s death with little or no tax implications

 

A Brief Word on a [Home Storage] IRA's

While a Precious Metals IRA allows your IRA to hold physical precious metals, there are strict rules and regulations that govern these type of accounts.  For many years precious metals brokers touted "Home Storage" Precious Metals IRAs.   They claimed someone could store their IRA precious metals at their home or safe deposit box.  In truth, the rules and regulations that cover these accounts makes it next to impossible for someone to actually qualify for home storage of the precious metals in an IRA.  Some dealers claimed you could start a Precious Metals IRA LLC and hold the metals at your bank safe deposit box.  As of November 2021, new case law indicates that owning precious metals inside of an IRA LLC is not a viable legal structure.  We have been warning clients of this for many years.  

The IRA has started coming down hard on these individuals and in one recent example a $720,000 "Home Storage" IRA was assessed over $300,000 in taxes and fees.  If you currently have a "Home Storage" Precious Metals IRA we highly recommend you call us immediately.  We have helped many investors get their non-compliant Home Storage IRAs corrected and into a compliant state.  

 

 Selecting a Custodian

You must determine and select the company you would like to be the custodian of your Precious Metals IRA.  While we will provide you with names of custodians, we have worked with, ultimately it is your choice who open your account with.   Each custodian will have different fees and storage options and will work with different depositories.   We highly recommend that you research multiple options before deciding on who you open an account with.  

Once you have decided which company will be your custodian you can open your account with them.   We are generally able to provide guidance through most of this process, however there may be situations where you will have to work with the custodian directly to finish setting up the account.  As your precious metals broker, we are able to facilitate the buying and selling of the precious metals in your account, however, any other action taken through your IRA will be done directly with the custodian.  

A final note, custodians and dealers are not fiduciaries, we aren't able to provide any sort of financial or tax guidance.  We always recommend that you consult with a financial planner for any in depth financial or tax related guidance.

 

IRA Custodians

Your IRA custodian is a licensed, bonded and insured company that reports the assets in your retirement account.   All IRA's must have a custodian.  Most traditional custodians generally hold IRA's invested in paper assets, such as stocks, bonds, mutual funds, ETFs and annuities.   A Precious Metals IRA custodian's role is no different, you are just investing in tangible assets:

Your custodian will:

• Be a licensed custodian with the US Government
• Provide secured and insured storage space in a licensed depository
• Send you quarterly IRA statements
• Handle your distribution requests
• Ensure your IRA meets all legal requirements to be qualified as a retirement plan.

What a Custodian [Does Not Do]

Now that you know a little bit about what a custodian does do, lets touch on what a custodian does not do.

A custodian does not:

• Act as an investment advisor, tax advisor or legal advisor
• Provide investment, tax or legal advice
• Recommend or endorse investments
• Recommend or endorse investment advisors
• Determine the fair market value of account investments
• Perform due diligence for the account owner on any investment or investment sponsor
• Determine the merits or suitability of any investment for the IRA or the accountholder
• Determine whether a transaction would be deemed a prohibited transaction (ie., transactions that are prohibited by the IRS.  Refer to IRS publication 590 or code section 4975 for more information). 

 

IRA Custodians we've worked with

Over the years we have worked with a handful of custodians.  Through our experience  and our clients experience, we have found that CamaPlan is our recommended choice as an IRA custodian.   Camaplan is a Pennsylvania based trust company.  What started out as a small, regional firm serving the Northeastern US is now grown into a national presence.  Camaplan's customer service team is responsive and helpful.  We have had a great deal of success in working with Camaplan.  Interested in learning more about Camaplan, click here.

 

What Precious Metals Are Allowed?

The IRS only allows certain types of precious metals to be held in a Precious Metals IRA.

The following precious metals are permitted to be held in IRAs under Internal Revenue Code 408(m)(3)(A)(i)(iv) and 408(m)(3)(B):

• [Gold Coins]:  American Eagle Bullion and Proof, American Buffalo bullion (no Proofs), Australian Kangaroo/Nugget, Austrian Philharmonic and Canadian Maple Leaf, any .9999 fine gold coin.
• [Silver Coins]:  American Eagle Bullion and Proof, America the Beautiful bullion (no burnished), Australian Kookaburra, Austrian Philharmonic, Canadian Maple Leaf and Mexican Libertad, any .999 fine silver coin.
• [Platinum Coins]:   American Eagle Bullion and Proof, Australian Koala, Canadian Maple Leaf and Isle of Man Noble, any .9995 fine platinum coin.
• [Gold, Silver, Platinum and Palladium Bars and Rounds]:  if produced by a refiner/assayer/manufacturer accredited/certified by NYMEX/COMEX, NYSE/LIFFE, LME, LBMA, LPPM, TOCOM, ,ISO9000 or national government mint that meets minimum fineness requirements:  [gold 99.9%], [silver 99.9%], [platinum 99.95%], and [palladium 99.95%].

  

IRA Frequently Asked Questions Once I've received the funds, is there a certain period required for depositing my old 401k funds into my new precious IRA as gold, silver platinum or palladium? For a 401 rollover, your funds are directly paid to you. Once you've received them, your new self-directed IRA account may be transferred within 60 days. Otherwise, you will be required to pay taxes. To better understand these rules, it's best to consult with a tax or financial advisor before completing an IRA fund transfer.  Is having more than one IRA allowed? Each person can have multiple IRA accounts. However, the total yearly contribution stays at the same maximum regardless of the number of IRAs. This total considers the value of any gold, silver, platinum and/or palladium you contribute. Will my precious metals be insured at the depository? Your precious metals are fully insured once they arrive at the depository. In the rare event a package gets damaged or lost, they are fully insured by us. Should I speak to a financial advisor? We always recommend clients seek the counsel of their financial advisors before making any decisions regarding their IRAs. Generally, coin dealers and brokers are not registered financial advisors and not legally responsible for any advice given. Are there any IRA contribution limits? Yes, you may be subject to IRA contribution limits depending on your type of IRA and income levels. Please consult with your IRA custodian to learn of any contribution limits you may be subject to. Will I ever be able to take physical delivery of my metal? You can liquidate or take possession of your metals at any time; however, this is considered a distribution and there may be tax implications.