Best Practices in Gold and Precious Metals IRA Investing

A lot of people are surprised when they learn that IRA rules allow them to hold real gold bullion, gold coins and other similar forms of precious metals within their retirement accounts. But IRA rules give investors a lot of leeway as to what you can hold. You don’t have to restrict yourself to stocks, mutual funds, bonds, certificates of deposit, annuities and other conventional financial products. Actually, as long as you stay out of the few prohibited investments – life insurance, and other collectibles – you can pretty much own anything you like within your IRA or other self-directed retirement account, including gold, silver, platinum and other precious metals in certain forms.

Allowable Investments

There are four precious metals in which your IRA can invest: gold, silver, platinum and palladium. However,

There are, however, some restrictions when investing in these metals.

Minimum Fineness Required:

• Gold .995+
• Silver .999+
• Platinum .9995+
• Palladium .9995+

Allowable coins include US-Minted Eagles and coins meeting minimum fineness (purity) standards, provided that they are not collectable. The primary value of the coin should come from the gold itself, and not thanks to the scarcity of and demand for the minted coin among coin collectors.

Examples of coins you can own:

Gold

• American Eagle coins (proof and non-proof)
• American Gold Buffalo coins (non-proof)
• Austrian Gold Philharmonics coins
• Canadian Maple Leaf coins
• Australian Kangaroo/Nugget coins
• Bars and rounds by a refiner/assayer/manufacturer accredited by NYMEX/COMEX, NYSE/Liffe, LME, LBMA, ISO 9000, or national government mint and meeting minimum fineness requirements.

Silver

• American Eagle Coins (proof and non-proof)
• Austrian Philharmonic
• Mexican Libtertads
• Australian Kookaburras
• Canadian Silver Maple Leaf Coins

Platinum

• American Eagle Coins (proof and non-proof)
• Australian Koalas
• Isle of Man Noble Coins

Palladium

Bars and rounds by a refiner/assayer/manufacturer accredited by NYMEX/COMEX, NYSE/Liffe, LME, LBMA, ISO 9000, or national government mint and meeting minimum fineness requirements.

Disallowed Coins:

There are, however, some coins you cannot own within your IRA, because they are not minted with sufficient purity. Some common examples:

Italian Lira
Mexican Peso and Ounza
South African Krugerrand

Creating a Gold IRA with New Directions IRA is very easy.

1. Open the IRA. You can start this process just by calling New Direction IRA at 877-742-1270.
2. Fund the account, via a direct contribution, transfer or rollover.
3. Find a precious metals dealer of your choice.
4. Find a precious metals depository. This is the facility or agent that will actually take possession of the gold or precious metal. IRS rules prohibit you from taking personal possession of the assets themselves. Your dealer may be able to recommend a depository that meets your needs.
5. Direct New Direction IRA to send funds to your dealer from your newly-funded IRA account, with specific direction as to what you want us to purchase (or sell) on behalf of your IRA.
6. New Direction IRA will handle the transaction for you, taking care to ensure the assets are held in the name of the IRA, in accordance with IRS rules. This is important because failure to ensure the proper titling of the assets could cause the IRS to determine that you have made a distribution – and result in unwanted penalties and taxes.
7. Your dealer will then ship the gold or other precious metal to the depository.

Considerations:

Expertise

Self-direction is a specialized field within the financial services industry. It’s important to work with an administrator experienced in handling these kinds of accounts. Many traditional brokerages and other financial advisory firms have very limited knowledge of the rules and regulations that specifically affect self-directed accounts.

Liquidity

Keep in mind that your depository will charge an ongoing fee for storing and securing your precious metals. Be sure to keep sufficient cash or other liquidity on hand within your IRA so that New Directions IRA can pay this fee on your IRA’s behalf.

Valuation Procedure

The valuations used for the IRA assets are estimated bid values. New Direction IRA will update the value of the investments weekly. Please note that the asset value reflected on the IRA statement does not include any dealer mark-ups or commissions. Price spreads can be significantly higher for proof coins than for precious metal bullion.

New Direction IRA does not determine where you buy your metals. You are free to work with your dealer of choice for your IRA’s purchase. Not all dealers operate the same way, so be sure to talk to them about their process. Also, remember that with a self-directed IRA, you are responsible for performing any due diligence needed prior to the purchase.

New Direction IRA – Your Third Party Administrator

New Direction IRA is a third-party administrator of self-directed retirement investments, including real estate IRAs, gold and precious metals IRAs, Solo 401(k) plans, SEP IRAs, SIMPLE IRAs and medical savings accounts. We work in tandem with your existing team of investment, legal and tax advisors to ensure the process goes smoothly, transactions are accounted for, and administration is done in compliance with IRS rules. You should do your own due diligence, in concert with your existing team of advisors, before you invest. However, once you make the decision, our role as the administrator is to carry out your instructions as faithfully as the law allows.  For more information, or to schedule a free consultation with one of our experts, please call us at 877-742-1270.