It is time to consider doing your homework as to which type of silver and gold you wish to buy for your IRA or 401k. When I say IRA, I am also including ROTH IRA, SEP, and all of the other types of retirement plansallowed by the IRS, including a 401k rollover into an IRA.
Physical Silver and Gold in your IRA and Gold
Many investors want control of their wealth and choose to own physical silver and gold in their IRA or 401k. It gives this type of precious metals investor the peace of mind knowing they can take delivery of the silver at any point in time of their choosing. Normal IRA restrictions and penalties would still apply and current taxes would have to be paid on any withdrawals but there is comfort for some knowing they can access their wealth in times of potential financial turmoil.
In 1997 Congress passed the Taxpayer Relief Act and any silver bullion that meets the minimum purity requirement of .999 fine silver is now allowed to be included in one’s precious metal IRA along with 22k and 24k gold or 99.99 pure bars. Numismatic or collectible coins are not allowed in an IRA. Publication 590 from the IRS explains more about the exclusion of collectibles in an IRA.
Self Directed IRA
If you want to invest in physical silver and gold then you need to do it through a company that specializes in alternative assets and offers self-directed IRAs. Three of the top companies that offer self-directed IRAs that allow investments in physical silver and gold are The Entrust Group, Goldstar Trust Company and Equity Institutional (formerly Sterling Trust). We work with all these companies and more where you use Buy Gold and Silver Safely to purchase the metals.
The way the process works if you transfer funds from your current IRA custodian (investment house) and rollover the funds to the new self-directed IRA with a transfer form from the new institution along with the application. Once the funds arrive you contact Buy Gold and Silver Safely and let us know and we will recommend what silver or gold to buy.
Because silver is such a heavy metal, I recommend it for IRAs more than I do for home delivery. Gold works out well for home delivery because it is lightweight and portable.
Silver and Gold Coins and Bars Allowed in IRA or 401k
There are many coins and bars that one can invest in with their self-directed IRA or 401k but again, the metal has to be .999 pure and “produced by a refiner/assayer/manufacturer accredited by NYMEX/COMEX, NYSE/Liffe, LME, LBMA, ISO 9000, or national government mint and meeting minimum fineness requirements.”Source 1000 ounce silver bars can be had for just a few dimes over the spot price of silver. Other popular bars are the 100 ounce and 10 ounce bars for silver and the 10 ounce and kilo bars for gold.
The most popular coins to put in one’s IRA or 401k are the American Eagle and Canadian Maple Leaf one ounce coins which will run you about $2.25 to $2.50 over spot for silver and from 1.25% to 3.5% over spot for gold. Another popular coin choice though would be the one ounce silver rounds, which can lower your premium to just around 80 cents over spot.
What you will find many gold dealers doing is trying to push silver investors into Proof Silver coins or coin sets. DO NOT BUY THESE! The proof coins are those that have a much higher cost than bullion silver coins and have a shiny mirror like look to them. I have warned silver investors before about buying these proof coins in a Seeking Alpha article The Problem With Buying Gold And Silver Proof Coins In Your IRA. You will typically be paying high premiums of 15% to 30% for the proof coins and when it comes time to selling them you will find it difficult to do so. On the application make sure the box next to proof coins is not checked.
Silver’s Future vs. Gold
I do think silver will double in price well before gold doubles and when you look at the gold/silver ratio, which currently is just above 73/1, I think we will march toward 35/1 after this metals market bottoms. At that point, I believe the price of silver will be around $60.