Self Directed IRAs: The Vehicle For Gold IRAs
The main purpose of this article is to reveal how you can leverage gold and other precious metals via a self directed IRA to protect your retirement portfolio from the ravages of inflation, possible hyperinflation even, and the ravages of economic turmoil and uncertainty.
In case you need background information about self directed IRAs and the pros and cons of them in the first place I will start there by explaining the whole process behind this type of IRA account.
If you wish to skip that part and jump straight to the information about how to leverage gold and precious metals please click here.
Let’s start by taking a look at some of the options that are available to you right now.
Are Self Directed IRAs a Good Idea?
This is obviously the most important question you need to ask yourself. So if you can figure out the reason why you’d prefer this type of IRA over a traditional IRA then you’ll know whether or not it’s the right choice for you.
I would argue that self directed IRA accounts are actually much better than traditional ones because you have a lot more freedom to invest with these particular types.
One of the implications of owning a traditional IRA account is that you need to get approval from an IRA custodian if there are going to be any specific changes in money management regarding your account.
What Does Self Directed IRA Mean?
With a self directed IRA you don’t have to go through any of the red tape regarding the management of your own money and investments and you don’t have to deal with any type of IRA custodian whatsoever. This puts the control completely in your own hands and you don’t have to let anybody dictate how and where you invest your money.
The choice is solely yours and there are no hoops to jump through to make the precise investments that line up with your own particular situation and circumstances.
What Are The Benefits of a Self Directed IRA?
In addition to those already mentioned above there are certainly some other what I consider to be very important benefits in taking the self directed option as opposed to going down the traditional IRA route. Since you don’t have to deal with an IRA custodian you also get to keep more of your money because you’re not forced to pay any IRA custodial fees. This is a big benefit because the management fees involved in having an IRA custodian manage your traditional account will eat into your profit potential.
There are all kinds of reasons why your custodian might charge a fee, and they could be for something as simple as processing one tiny transaction that you could most probably take care of yourself.
If you just had a little bit more confidence in yourself and a bit more knowledge you should easily be able to manage your own investments without the assistance of anybody else.
How Much Money Can You Put In a Self Directed IRA?
The Self-Directed IRA maximum contribution limits for 2024 are increased from 2023. This maximum limit is $7000 for those aged below 50. Anyone aged 50 or over can make a $1000 catch up contribution in addition, bringing the maximum contribution for them up to $8000.
How Can I Divide The Funds In My Self Directed IRA Account?
This is a very important question, and it’s good to know that you can divide funds in self directed IRA accounts in many different ways.
If you decide to go down this route you’ll be able to put your money into all kinds of things like commercial property, foreign real estate, tax liens, raw land, discounted notes and even investment property.
It’s very easy to divide up these funds by just writing a check and then managing these different accounts very simply. This is just one option available to you and it is definitely an advantageous one because it allows you to diversify your IRA even further and therefore to limit your risk potential in any one particular area.
How Else Should I Diversify The Risk?
One very popular way to diversify your investment portfolio right now is by investing in gold and other precious metals.
From experience I would say that the safest way to do this is by actually buying the physical commodities themselves as opposed to the more risky option of investing in them indirectly on the stock market. It’s very different from buying the precious metals themselves, and you could really stand to lose a lot of money if you don’t understand both how this market works and the volatile nature of some of these ETFs that are available for precious metals.
By investing in the mining companies themselves, as opposed to the physical metals, you are relying on the management of the particular Company as well as the local conditions where the mine is located rather than just on the performance of the commodity itself.
The purpose of this article is not to explain the benefits of investing in gold, but if you want specific information about that please click on the dedicated article that I have written elsewhere on this site, here: Why Invest In Gold?
How Should I Use My Self Directed IRA Account To Invest In Gold and Other Precious Metals?
For reasons I have explained above the safest way to invest in gold and other precious metals is by buying the physical commodities themselves. And the only way to have the ability to own precious metals in this type of IRA is to have a specific type of account that is mostly known as a gold IRA account.
With so much geopolitical tension and uncertainty, high inflation, increased interest rates, and with the potential implications of the Quantitative Easing policies adopted by many governments around the world particularly following the unforeseen pandemic, I consider it wise to have gold as part of your holdings to hedge your bets.
In fact many financial experts are suggesting nowadays that it is wise to have a percentage of your investment and retirement portfolio held in physical gold.
Self Directed IRA Companies
How and Where Can I Get A Self Directed IRA To Invest In Gold?
The short answer to this is, talk to an expert! By that I mean someone with expertise in both precious metals and retirement accounts.
BREAKING: War, Oil, Inflation, and Interest Rates: What Should Retirement Savers Do?
About the Author: Doug Young Doug is a highly experienced professional and widely trusted authority in financial investing, commodity trading, and precious metals. With over 20 years of expertise, he helps others make informed decisions by sharing a combination of personal experience, extensive knowledge and meticulously researched information on gold IRAs, precious metals investing and retirement planning. He regularly writes news items on these topics. He has considerable experience of evaluating Gold IRA and Precious Metals Companies, gained over a period spanning more than a decade.
See full bio