Adding Precious Metals into Your IRA
Financial professionals across the globe all agree that asset diversification is the key to investment success. Unfortunately, most Americans do not realize that the Internal Revenue Service (IRS) allows investors to place a wide variety of assets into SELF DIRECTED IRA retirement accounts, including Gold, Silver, Platinum and Palladium.
Setting Up Self Directed IRA Account, Its Easy ……..
Setting up a Self Directed IRA is simple, however there are mandatory rules enforced by the IRS that govern these types of IRA accounts that must be followed, along with specific reporting requirements. For instance, you may not be in physical possession of the Bullion assets held within your IRA. These must be secured in a depository or independent facility. Fortunately there are companies that specialize in the setting up and administering of self Directed IRA’s .
Purchasing Gold, Silver or Platinum for Your Account
First Sate Depository does not Buy or Sell any bullion products. The IRA holder is responsible for choosing the previous metals dealer and the type of product. However, make sure you know what products are acceptable. We provide a list below of “Acceptable Coins” that meet IRS regulations.
You are fee to purchase Bullion coins and other IRA acceptable bullion products from ANY bullion dealer, and we will work with your IRA plan administrator to arrange to have the assets transferred and/or delivered to First State.
The IRA Storage Solution – First State Depository
First State Depository has been recognized as one of the nation’s finest Precious Metals Depositories. We not only bring years of experience to the table, in addition to our state of the art security and level 3 storage facility, we are also uniquely positioned to provide you with turn-key solutions to the set-up, purchase and storage of precious metals into an IRA account.
When you set up your Self Directed IRA, Make sure you tell the Administrator that you want to use First State Depository for your Precious Metals Storage.
It is YOUR CHOICE where your assets are stored; any IRA administrator that does not offer you that choice is not looking out for your best interests, but theirs.
What Coins Qualify?
- In general, coins that quality to be included in your IRA must meet minimum fineness requirements, ( the purity of the metal contained in the coin). The fineness standards are as follows: Gold Coins – .995+ | Silver Coins – .999+ | Platinum – .9995+ | Palladium – .9995+
- Any coins that have been graded for condition by certification organizations like PCGS or NGC and placed in tamper-proof plastic containers called “slabs”, will generally fall into the collectible category and thus are not allowed for IRAs.
Approved Coins specifically listed in the Internal Revenue Service Code include:
American Gold Eagles
Interestingly, these US minted coins are not of sufficient purity to classify them as bullion. They are only approximately 91% pure gold (22K). The other material in the coin offsets the softness of the gold and makes the coin more durable. Gold Eagles Coins are available in four types: 1/10, ¼, ½ and 1 full ounce coins. Proof Gold eagles are also allowed in your IRA.
American Gold Buffalo coins.
First minted in 2006, they are the first and ONLY 24K (.9999 fine) pure gold of bullion coins produced by the US Mint. Note that the specially processed proof version of this coin is NOT acceptable due to the treatment raising the value of the coin beyond the value of the metal.
The US Gold Buffalo is a perfect coin for your IRA account. Minted to the highest standards of purity and with the iconic Buffalo Head design, these coins became an instant classic and represent the finest Bullion product produced by the US Mint.
American Silver Eagles.
Silver Eagles are the only US Mint Silver Bullion coin allowed in your IRA. They have a fineness of only .999 due to the addition of a touch of copper for added durability. The design is beautiful and for those who which to diversify their precious metals holding to include Silver; this is the way to go.
American Platinum Eagles.
The rarest of birds, the Platinum Eagles are minted in 4 forms: 1/10, ¼, ½ and 1 ounce coins. These are of .9995 fineness.
Other Legal Tender Bullion Coins from National Mints are also approved for inclusion into your IRA. Note that some of these may carry a slightly higher premium to purchase than their US Mint cousins.
- Australian Nugget (Kangaroo) Gold coins..9999 fine.
- Australian Kangaroo and Kookaburra Silver coins .999
- Australian Koala Platinum coin .9995 fine
- Austrian Philharmonic Gold coins .9999 fine
- Austrian Philharmonic Silver coins .999 fine
- Canadian Maple Leaf Gold coins .9999 fine
- Canadian Maple Leaf Silver coins .9999 fine
- Canadian Maple Leaf Platinum coins .9995 fine
- Canadian Maple Leaf Palladium coins .9995 fine
- Mexican Libertad Silver Coins .999 fine
- Isle of Man Noble Platinum coins .9995 fine
Some examples of coins that don’t meet the fineness requirements are:
Austrian Corona and Ducat, Belgian Franc, British Sovereign and Britannia, Chilean Peso, Columbian Peso, Dutch Guilder, French Franc, German Mark, Hungarian Korona, Italian Lira, Mexican Peso and Ounza, South African Krugerrand, Swiss Franc and any coin that falls into the “Rare”, and thus collectible, category.
If you’re not sure about the fineness of a particular coin, call us at 302-765-2760 or email us at [email protected].
The First State Solution: Set Up a IRA or 401K Custody Account
Requires a Self Directed IRA Account – Click Here for Info on Setting up a New Direction IRA Account
In order to Open an IRA Custody Account, you MUST either already have a self Directed IRA established, or your NEED TO OPEN a Self Directed IRA with an IRA administrator.
Setting up a Self Directed IRA is simple, however there are mandatory rules enforced by the IRS that govern these types of IRA accounts that must be followed, along with specific reporting requirements. For instance, you may not be in physical possession of the Bullion assets held within your IRA. These must be secured in a depository or independent facility. Fortunately there are companies that specialize in the setting up and administering of self Directed IRA’s such as New Direction. Read more about New Direction IRA here.
How to Transfer an IRA
How to Transfer Your IRA-Owned Precious Metals to a New Depository/IRA Administrator
Many self-directed IRA administrators have exclusive arrangement set up for storage of their clients’ IRA-owned precious metals. In the event that you want move your IRA-owned metals to a new precious metals storage depository, you will most likely need to find an IRA administrator that allows the use of that new depository. Luckily there are IRA administrators that allow flexibility in choosing the precious metals storage company. New Direction IRA, Inc (gold.newdirectionira.com) allows their clients to choose where their IRA metals are stored.
If you have metals held with another precious metals depository and you would like to move them to a different depository you will take the following steps:
- 1. Set up an IRA with New Direction IRA Inc. All forms and information can be found at: gold.newdirectionira.com
- 2. Submit IRA transfer forms to New Direction. The IRA transfer forms can be downloaded from gold.newdirectionira.com. On the transfer forms you will indicate that you are performing an ‘in kind’ IRA to IRA transfer (in kind means you are moving the metals without selling them). Along with the IRA transfer forms it is a good idea to include a letter to the current IRA administrator/depository explaining what you are doing and authorizing the movement of the metals.
- 3. Once New Direction IRA receives your transfer request they will forward the request to your current IRA administrator with delivery instructions and a packing slip. Your current IRA administrator will coordinate with their depository and instruct them to ship the metals to the new depository. Additionally, the IRA administrator will remove the assets from their records and show them as transferred out to your IRA with New Direction IRA, Inc.
- Note: if both depositories are in Wilmington DE then you can instruct the current custodian to authorize the depository to release the metals for personal pick-up by a representative of the new depository.
- Note: it is also a good idea to get a medallion signature guarantee on the IRA transfer forms before mailing them to New Directions. A medallion signature is similar to a notary but stronger. It is a guarantee that your signature is genuine. You can generally obtain a guarantee from a bank officer at your local bank. The guarantee is not always required; however, some IRA administrators require it before they will honor the transfer request.
- 4. Prior to the arrival of the metals you should sign the account agreement for the new depository and submit that to New Direction IRA Inc. The new depository should notify New Directions and you when the metals are received.
- 5. New Direction will post the assets to your IRA.
Can I add Gold to my 401K?
Yes…… Your 401k Plan Can Invest in Gold! Ask Your Employer to Allow It.
Clients and potential clients often ask us if they can invest in Gold or other precious metals in their employer sponsored 401k plans. If you are currently the owner of a self-directed IRA, HSA, or Individual 401k plan you know the answer is yes, you make the decisions with those plans. However the answer with employer sponsored plans is a little tricky. A resounding “Yes, But”. And that is a significant “But”.
Yes, the IRS allows any 401k plan, IRA, HSA, Roth IRA, SEP IRA, SIMPLE IRA, Profit Sharing Plan, to invest in Gold and Precious metals, IF the plan document allows it. For individual accounts, like IRAs, HSAs, SEP IRAs, the individual can select a plan, such as all the ones provided by New Direction, which allows it. However, the individual wanting to invest in Precious Metals within their employer’s plan must look and see if the employer’s plan offers access to metals. Most do not, YET. But they can, if the employees demand it! The company can add it as an investment option, if they choose, for at least a portion of the individual’s investment option.
Gold can be a valuable and relatively easy option for an Employer to add to their plan. New Direction can help do all the required record keeping and reporting for metals owned within a company plan and provide the structure to make it work cost effectively for the employer and employee participant in the plan.
The details of purchasing precious metals within an employer-sponsored 401K plan vary based on how the “plan document” was created and approved by the IRS, but in almost every case, the plan can be modified to allow metals, or it may be as easy as the company electing to include it from a menu of available options.
If you want to move all or a portion of your retirement plan to metals, call your retirement plan official at your employer and demand they add a precious metals option.
For those who have access to retirement funds that they already control, such as an IRA or rollover 401k, move those funds to a Self-Directed account with New Direction and start taking charge of your retirement future. This includes people with 401k money still in previous employer’s plans, those with Traditional and Roth IRAs and HSAs, SIMPLE IRAs, SEP/IRAs plus any small company owners who have a retirement plan, but no outside employees.
Some Legal Stuff
Please note, First State Depository does not offer investment, tax, financial or legal advice to clients. Individuals who believe they need advice should consult with the appropriate professional licensed in that area. We can however provide you with all the information you need about the Depository services we offer and recommend companies which may be able to assist you.