How To Diversify Your Retirement Savings With Gold And Silver
Posted on: 26 November 2019
Precious metals are an investment that has historically been protected from market crashes. While their value will fluctuate on their own (like any investment), they're less tied to the value of the U.S. Dollar or the performance of the stock market than other investments. Because of this, it can be a good idea to diversify your retirement savings by investing a portion of it into precious metals.
Unfortunately, traditional IRAs don't allow you to hold precious metals as part of your retirement funds. In order to begin, you'll need to start a precious metals IRA. Here's how you can introduce gold and silver into your retirement portfolio by starting one.
1. Find a Precious Metals Custodian
In order to start a precious metals IRA, you'll first need to find a custodian for your gold and silver. The purpose of the custodian is to act as a bookkeeper for your accounts. They manage your precious metals and keep a record of their current value so that it can be reported to the IRS.
Numerous companies exist that act as custodians for precious metal IRAs, and they mostly differ in their fee structure. Look for a trustworthy custodian that has been in business for several years — you want your retirement funds to be well-protected. As long as the fees fit within your budget, going with a well-respected custodian is the best choice.
2. Select a Depository for Your Precious Metals
The IRS doesn't allow you to stash your precious metals inside your home. Instead, you need to have them stowed away in a depository. While some people are uncomfortable with the idea, this is actually a benefit to you. Depositories are incredibly secure and have excellent insurance that will cover you if your precious metals are accidentally lost. Storing your precious metals at home would be quite risky, as they would be vulnerable to theft — depositories guarantee they're not going anywhere.
Depositories charge fees to safeguard your precious metals, but it's worth it for the peace of mind. The most important thing to look for in a depository is full insurance for your precious metal holdings.
3. Purchase Precious Metals From a Dealer
Once you've started a precious metals IRA with a custodian and have chosen a depository, it's time to find a dealer. The IRS only allows you to store certain types of precious metals in your depository. Palladium, platinum, gold bullion, and certain gold or silver coins are all allowed.
Prices will be very similar between all dealers because they're based on the current market value of precious metals. It's a good idea to ask your custodian for a recommendation to find one that's trustworthy. After you make your purchase, dealers will ship your precious metals to your depository for you for safekeeping.
4. After Retirement, Sell to a Broker to Cash Out
When you retire, cashing out your precious metals IRA is simple. You need to find a broker to sell your precious metals to, who will arrange to pick them up from the repository and give you cash in return. Price is the main criteria for selecting a broker since you want to get the maximum return on your investment.
Overall, diversifying your portfolio with precious metals is an easy process, and you can begin it using your current retirement funds. In order to start, you'll first need to find a custodian to manage your precious metal IRA. They can help explain the process of finding a depository and a dealer and recommend ones that are reliable. By diversifying your portfolio and selecting a trusted custodian and depository, you'll ensure that a portion of your retirement funds is protected from market crashes.
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