By Doug Young

The Self Directed IRA

  • A Self Directed IRA is the key to being in control of your personal investments. It’s the optimal vehicle for investing in precious metals such as gold, silver, platinum and palladium.
  • Basically, a Self Directed IRA is controlled by the individual investor. Just as with a traditional individual retirement account, however, the Self Directed IRA limits how much an individual may put in it annually and how much he may withdraw, too.
  • As the term ‘self-directed’ implies, financial risk is the sole responsibility of the investor because he is the one who is choosing and managing where he places his money. While this poses risk, there is also real freedom for the investor to diversify his money without being constrained by the rules common to other kinds of long-term accounts such as the employer-based 401K.

self-directed ira

  • In addition, an investor may have the Self Directed IRA along with other types of IRAs in his portfolio.
  • There are some limitations on the Self Directed IRA. Just as with other IRAs the self-directed type excludes insurance investments, collectibles and S corporation stocks. Also, the federal government does limit how much a person may deposit into any IRA within the course of a year.
  • In spite of those limitations, there are no restrictions on the amount of money that may be earned inside the investment vehicle itself. Moreover, the Self Directed IRA has much more in the way of speculative potential than most any other retirement vehicle.

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What Is The Relationship Between the Self Directed IRA and Gold?

  • According to federal regulations, individuals must not make investments that ‘benefit themselves’. Gold bullion may not be purchased with a personal check, and in some cases, the purchase has to be made via a trustee to trustee transfer.
  • Owners of IRAs must have a gold depository which is approved by the Internal Revenue Service, and it must be set up and ready to take the bullion before any payments are made. Also, the investor should pay strict attention to any fees the depository charges.
  • When the gold seller sends an invoice to the IRA owner, the owner has to give authorization for payment to be made through the custodian. Physical gold bullion or coins normally take between one and three weeks to arrive, depending upon which Gold IRA Company is handling the transaction.
  • Some IRA investors put their resources into gold mining stock or into funds that are exchange-traded. The majority of IRA custodians advise their customers to take these routes.
  • I personally consider that gold investments through Electronic Transfer of Funds or ETFs and through gold mining stocks are not as advantageous as actually owning physical gold.
  • The best way to invest in gold and protect an Individual Retirement Account is through buying physical gold bullion bars and gold coins. This is known as a Gold IRA. Until the investor reaches the age of 59½ the gold has to be stored at an IRS approved depository.
  • One of the best ways for the investor to get educated on the Self Directed IRA and Gold is to speak to a reputable gold IRA company. Here are details of the one that I recommend, and why.
  • Regarding the Self Directed IRA and Gold itself, investors may purchase gold bullion, coins and bars that meet the following standards. The gold has to be real currency of a recognized public entity. Further, it has meet a particular standard of purity. In the US, purity standard is 0.995. Other countries have different standards, and the investor should look carefully into what purity he is purchasing.
  • An individual may hold these types of gold in an American Self Directed IRA:
    •  American Gold Eagle coin
    •  Canadian Gold Maple Leaf coin
    •  Austrian Philharmonic gold coin
    •  American Gold Buffalo coin
    •  Gold Kilo Bars
    •  Certain Gold Bullion Bars
    •  Credit Suisse Gold Bars
    •  Swiss PAMP Gold Bars

Conclusion

Investing in a Self Directed IRA is a great option, but care should be taken to use this important financial tool properly and with guidance from experts.


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About the Author: Doug Young
Doug YoungDoug 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.

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