Precious Metals & Gold IRA: Home Storage Gold IRAs 101
When you decide to get a retirement plan, a gold IRA may likely come to mind. However, getting money is not a day’s job, and since you have to work hard to get money, you always want to ensure it is properly secured.
Therefore, you may consider storing your precious metals by yourself. After all, you are the only person you can completely trust. Luckily, there is a way to make this possible and this is known as home storage gold Individual Retirement Accounts. You can check out Metal Resources for other options.
However, there are so many things to know about this type of IRA that if you go into it without proper knowledge, you may be committing a crime.
Therefore, in this article, we will be discussing the basics of home storage IRA so whatever choice or decision you make won’t be one you will regret.
Home Storage Precious Metal IRA – What exactly is it?
This retirement account allows investors to hold their valuable metals by themselves in their homes or any other private place.
It simply involves the investor registering their selves to be a trustee and holding the physical form of the valuable metal by themselves, as opposed to having a 3rd party hold it.
This sounds like such an attractive alternative, however, the qualifications that are required to ensure this is done legally are quite a lot. This means the process is difficult and sometimes, it may just be easier to leave the asset with a 3rd party.
Some of the basic requirements you need to own this type of account include:
• The investor must have an LLC in their name. This company must have a specially documented operating agreement.
• The investor’s net worth mustn’t be lower than 250,000 dollars (usually after audits and incorporation).
• The company’s trustees and employees will make corporate insurance of about 250,000 dollars fidelity bond.
• The applicant has to provide proof to show they have once handled retirement funds.
• The trustee corporation’s ownership has to be split between several persons.
• The IRA trustee cooperation has to have an operating base for business that is assessable by the public.
• The applicant has to have legal counsel and give an annual detailed audit done by a public accountant.
How it Works
The first thing you need to do to open this type of account is getting a self-directed individual retirement account. You can visit https://money.usnews.com/money/retirement/iras/articles/a-guide-to-self-directed-iras to learn more about SDIRAs. You also need a precious metal IRA Company; they will walk you through your setup process.
While you have absolute control of the assets, a custodian is required for the arrangement. This is one of the requirements given by the IRS to own this account.
The custodian would be the one to hold the LLC’s ownership (the status this would be in is tax-deferred). Alternatively, you can allow the custodian to store and keep the asset for you. But in this case, since it is a home storage account, you would still have complete access to your asset at any time.
Accounts That Can be used for Home Storage
Every retirement account can be used for this solution. It is required to roll over into a traditional account; however, this process is easy. Accounts eligible for this option include:
• Roth IRAs
• Traditional IRAs
What Precious Metals Types are allowed?
According to the Internal Revenue Code, some coins and bullions can’t be bought via retirement accounts. You can speak to your IRA specialist if you wish to find out the products that your account can get.
But speaking generally, gold bars, bullion, gold coins, silver, as well as other valuable metals denominations can be bought.
However, “collectible” coins aren’t allowed. Finally, when gold is bought, it must be of investment grade.
Is A Safe Needed?
Of course, you need a safe, and not just any safe, you need one of high quality. Ensure the safe you choose cannot be moved or picked up by a burglar. Simply put, it should either be built in the wall or be very heavy to lift.
If it can be easily picked and moved, the thief can move it and go home to figure out opening it.
Below are some of the benefits of having this account:
• You can easily access your asset, so if there is a need for it, you don’t have to go through a whole process, you can simply grab it.
• You don’t have to worry about inflation or your asset disappearing since it isn’t “electronic money”. You can see it whenever you like and be rest assured.
• You have absolute control.
• Most 3rd parties and banks have management fees, but with this arrangement, you do not have to worry about any of that. However, you may be required to pay a few setup fees.
• You can rest assured since you know the exact location of your money and can access it directly.
The legality of this account type is possibly the biggest question investors ask. Thankfully, this is as legal as legal can be.
However, there are so many IRS requirements that have to be met before this legality is assured. Sadly, meeting these requirements isn’t that easy. Therefore, you may even consider allowing a bank or registered nonbank trustee to handle your asset for you rather than going through this stress. In this article, the idea of nonbank trustees is briefly discussed.
In this article, we have discussed some of the basic things anyone needs to know about home storage precious metals IRAs. We believe this article has cleared the air regarding certain areas you didn’t quite understand.