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Do You Know the Silver IRA (Retirement) Investment Rules

Do You Know the Silver IRA (Retirement) Investment Rules

by Altaf

Investing in silver as part of a retirement portfolio boasts a wise move to protect wealth from inflation. Economic strife has the ability to reduce the dollar’s purchasing capacity, but precious metals like silver retain value when there is financial turbulence.

With economic volatility being what it is, investors take the opportunity to diversify their portfolio with assets that can withstand these challenging times, like a minimally composed silver portfolio (retirement) alongside the other classes. 

Before you take the step into precious metal investing, specific rules go along with these IRAs. Let’s check a few out.

Are You Aware Of The Investment Rules That Apply To A Silver IRA

Precious metals are a physical commodity. These cannot be held in a standard IRA, which has restrictions on paper assets like stocks. Assets like silver and other metals need to be held in a self-directed IRA specifically designated for alternative investments like physical holdings.

These are also opened, held, and managed by specialized custodial services designated for precious metals who supply the contribution you provide to a silver dealer so you can then make your purchase of the commodity. 

After the transaction is complete, the silver firm will ship the product to an IRS (Internal Revenue Service) – approved depository where it needs to remain until retirement age, and then you can take possession. Some of the rules that apply when purchasing this type of physical asset:

  • Silver and conventional IRAs are comparable as far as governing rules

Comparable tax advantages exist between a silver individual retirement account and a traditional or Roth option, including the yearly limits of $6000 for those under age 50 and $7000 for anyone over 50. 

The type of self-directed account will be similar to a standard ARA based on which style you choose for RDM (required distribution minimum), any withdrawals, and as far as penalties.

  • The IRS specifies bullion and purity for IRAs

The silver in self-directed IRAs has to meet specific purity of 99.9% with a fineness at .999 as dictated by the IRS. That means not all coins worldwide will be eligible for these accounts, and you need to watch out for scammers. 

Learn about fraud at https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/CustomerAdvisory_COVID19PreciousMetals.htm. Some that investors can consider for purchase include:

  1. Mexican Libertad Bullion
  2. Austrian Vienna Philharmonic
  3. American Eagle Plus the Proof American Eagle
  4. Australian Kookaburra
  5. Australian Koala
  6. Canadian Maple Leaf
  7. Chinese Panda
  • Adding your own silver to an IRA is against the rules.

Investors are not permitted to add silver that they already own to a self-directed IRA. The only time there’s an exception to that rule is if an investor is using a silver IRA to roll over to a brand new individual retirement account.

  • An approved custodian is required for storing silver and other precious metals.

IRS regulations dictate that precious metal investors use an approved custodial service to manage and store their IRA investments. Physical silver is not permitted for keeping in a safe at your home. 

There are scarce circumstances where the IRS will permit a “limited liability corporation,” but it is unusual. 

If you opt to take possession without direct IRS say so, this denotes a distribution for which income taxes for that distribution will be charged, plus there will be penalties for those under the age of 59.5 of no less than 10%.

Final Thought

Investors can choose to have silver mutual funds for individual retirement accounts (IRA). That also includes an exchange-traded fund or ETF. ETFs will allow silver investing, or also futures contracts. 

Rules apply in the way that you can sell the precious metal in the IRa when the demand is high, but the gains need to stay in the account. Look here for guidance on whether silver is the right choice for you as an entrepreneur investor.

Silver, like gold, helps to diversify a retirement portfolio’s assets. Silver is another precious metal with the likelihood of retaining its worth, but it will see its share of ups and downs. 

The idea is to keep the investment conservative with no more than perhaps 5% comprising your precious metal holdings. That provides stability and balance without monopolizing the retirement portfolio.

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