1) What is an IRA?
An IRA, or Individual Retirement Account, is a savings plan for your retirement that has been designed specifically to provide tax advantages to individual investors such as tax-free or at least tax-deferred growth of earnings. There are several different types or IRA accounts- all of which have different rules that govern the mimimum withdrawal age, annual limits on contributions, and others. Most commonly, IRAs are used to supplement an employer’s 401(k) account and typically will be the majority of your investment portfolio.
2) Is it OK to have more than one IRA?
Yes. There is no limit on how many IRAs you can have at once, but there are limitations on the total amount you can invest annually into IRAs. In December 2011, if you were under 50, you can contribute up to $5,000 per year in all IRAs. If you were over 50, you can invest up to $6,000 per year.
3) Can my existing IRAs be used to invest in precious metals?
Typically, yes. However, the final decision is left to your current custodian or trustee.
4) How can I invest my IRAs into precious metals?
As long as your IRA is self-directed, you can simply direct some of your funds into precious metals. Most commonly, you can invest in palladium, platinum, silver, or gold. However, you must know that any precious metal, whether it be in coin or bullion form, must meet certain requirements of purity and refinement.
5) What is the difference between a traditional a self-directed IRA?
A traditional IRA is controlled by a custodian or trustee. You must allow them to direct your funds into investments that they deem to be worthy. A self-directed IRA is where you get to choose where your funds are invested. You don’t have to follow the decisions of a custodian or trustee. The main benefit of the self-directed IRA is that you get to choose from stocks, bonds, precious metals, mutual funds, CDs, or other IRA-compliant investments.
6) What is a traditional IRA versus a Roth IRA?
First of all, you must know that anyone who has an income can contribute to an IRA. If you were under 50 in 2011, you can contribute up to $5,000 annually. If you were over 50 in 2011, you can contribute up to $6,000 annually.
Depending on your income, marital status, and membership of employer plans, your contributions to traditional IRAs can be tax deductible. Contributions to traditional IRAs are deducted from your total income, so your tax liability is reduced and therefore you are not taxed on it. If you opt to take funds out of your traditional IRA before reaching the age of 59 1/2, you will have to pay penalties and taxes. However, if you are using the funds to pay back higher education fees or to purchase a house, you will not have to pay the penalties, but you will have to pay the taxes.
With a Roth RIA, you don’t get any tax deductions on your contributions, but you can withdraw the funds completely upon your retirement without having to pay taxes and penalties. The condition to enjoy this benefit is that you must be over 70 1/2. Also, you can only have a Roth IRA if your adjusted gross income is less than $107,000 for a single taxpayer or less than $169,000 for married couples who file jointly.
7) Can my existing IRA be rolled over?
Yes, funds from an existing IRA can be rolled over to a precious metals IRA and you can do this as often as you want without having to pay penalties or taxes. You will simply need to set up the new IRA and then authorize the transfer of funds. Typically, the custodian of your new IRA will handle this and will work with your existing custodian to work out the transfer of the funds. IRA rollovers are subject to time limits and other restrictions and you may have to report it to the IRS. In order to avoid complications, be sure to get tax advice before you start the rollover process. Also, you can invest in gold with your 401(k).
8) How long does the rollover into gold take?
The amount of time it takes to rollover your IRA into gold depends on a wide variety of factors. You can be assured that your new Regal Assets IRA custodian will work diligently with your current IRA custodian to get the transfer completed as quickly as possible.
9) Can my IRA hold anything other than gold?
Yes. Your new precious metals IRA is self-directed, and you have the authority to invest into any assets that you want. You don’t have to just allocate your funds to gold and other precious metals, you can also put them into stocks, cash accounts, mutual funds, and more. There are also other gold related investment products that you can invest your funds into.
10) Can I use cash to open a new IRA?
Yes, but know that you will only enjoy tax benefits on the first $5,000 if you were under 50 in 2011, and $6,000 if you were over 50.
11) How much is typically invested in precious metals IRAs?
Typically, investors will invest around $10,000 to $25,000 in precious metals. However, typically these IRAs have been accumulating for quite some time and some investors will invest $100,000 or more in precious metals.
12) Why should Regal Assets be my IRA custodian?
It is very important to choose the right IRA custodian from the beginning. In order to avoid any complications and fees/charges that are unnecessary, you should choose a company that has not only experience in investing precious metals IRAs, but knows and understands the current tax laws and how they affect your current personal circumstances.
13) What happens when I buy precious metals?
Your precious metals that you purchase with your IRA will be stored in an IRS-approved depository that is specifically designed to store precious metals. These depositories are secure, but you will be able to easily access your metals when you want to take personal possession of them.
You will be liable for any penalties and taxes if you do decide to take personal possession of your metals, because the IRS does see this as distribution of funds.
14) Are my precious metals safely stored?
All of the precious metals that Regal Asset is responsible for are stored with Brinks, which is an authorized depository for NYMEX/Comex. You can be assured that your assets will be stored in a secure and safe facility. Also, in the very unlikely event that something ever happens to Brinks or Regal Assets, your precious metals will still always be yours, unless you decide to sell them.
15) Are my IRA accounts and precious metals stored and separately identified?
All of the precious metals that have been allocated to IRA accounts that Regal Assets is responsible for are stored together. They are not individually separated, and are considered “fungible.” This means that your IRA will be listed as having specific assets and categorized by the specific type of metal, whether it is in coin or bullion form, who made it, and the denomination of coins and weights of bullion.
16) Can I transfer my precious metals to a different facility for storage?
No. Regal Assets will choose the best storage facility to deposit the IRA assets that they are responsible for in order to minimize any administration or storage fees. The only way you can move your assets to a different storage facility is to transfer those funds to another IRA custodian that uses the facility that you want to store your assets in. If you choose to take this option, your Regal Assets representative will work with your new IRA custodian to transfer your funds once all the outstanding charges and fees have been paid.
17) Can I store my IRA assets personally?
One of the main reasons that you avoid any penalties and tax liabilities is that your precious metals IRA is managed and stored by a third party. When you take personal possession of your IRA assets before the minimum age that is specified, the IRS will classify that as a distribution and you will have to pay taxes and penalties. You will also have to report that distribution to the IRS.
18) What is the difference between a trustee and a custodian?
The terms “trustee” and “custodian” are often interchanged, however there are a few differences in their definitions.
A trustee is the person that has control and authority of assets that are held in a trust, but must always hold the best interests of the beneficiary first and foremost and therefore must exercise their authority of the trust accordingly.
The only role of a custodian is to hold and manage the assets on behalf of the owners. A custodian has no obligation to the owner other than safe and secure storage of the assets and following the instructions of the owner of said assets.
Typically, the law in each state will define the specific obligations of a trustee and custodian.
19) What precious metals can be held in my IRA?
There are specific and strict rules that govern the types of precious metals that can be held in a precious metals IRA. However, the basic rules to qualify as an IRA asset are:
- Gold must be .9950 pure
- Silver must be .9990 pure
- Platinum and Palladium must be .9995 pure
When it comes to physical forms, only bullion bars manufactured by NYMEX, COMEX or ISO 9000 approved refiners qualify. Also, proof coins must be in the original packaging and have a certificate of authenticity from the manufacturer. Examples of qualifying coins are:
- Canadian Maple Leafs
- American Gold Eagles
- Austrian Philharmonics
20) Will I receive regular statements regarding my investments?
Yes, Regal Assets will provide you with quarterly statements via regular postal mail. You will also be provided with a hardcopy statement regarding your account every 12 months that shows the transactions that occurred over the period and the market value of your assets. You will also be given access to your account details via the online portal 24 hours a day, 7 days a week.
21) What are the fees for setting up a self-directed precious metal IRA?
Regal Assets has a flat fee that covers both the administration and storage fees of setting up and managing self-directed precious metals IRAs that have no hidden charges or extra fees.