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The demand for precious metals has increased significantly in recent years. As a new generation of investors entered the market, they started looking for unique places to put their money. For many, this led to the discovery of silver IRA plans.
An individual retirement account (IRA) lets you save money for retirement with tax benefits. These have long been popular investment vehicles, but people are increasingly choosing accounts that allow for bullion as an asset. The big question is whether this is a smart move.
There are a variety of retirement investment options available, so whether a silver IRA is right for you can depend on many factors. By understanding the complexities of such a retirement fund, you’ll be in a better position to make informed decisions.
What Is a Silver IRA?
An individual retirement account that holds silver is similar to traditional funds. IRAs are self-directed accounts that allow individuals with earned income to save money for retirement. By contributing to an IRA, a person can gain tax-free or tax-deferred profits on their contributions.
These funds typically invest in stocks, bonds, and mutual funds. Conversely, a silver IRA allows its owner to invest in physical bullion. In most cases, investing gold, platinum, and palladium is also allowable in these accounts. Such a strategy can minimize capital gains taxes on bullion.
Unlike traditional retirement accounts, precious metal IRAs require a custodian and approved depository. This means bullion typically can’t stay in your possession. There is a loophole in this rule — which we’ll discuss later — but allocated bullion storage is usually required.
Benefits of Silver IRAs
If you’re considering opening an IRA with silver as the underlying asset, it’s because you’ve learned that doing so has many benefits. In fact, there may be some advantages you haven’t even recognized. In the world of precious metal IRAs, you’ll find each of the following benefits:
Hedges Against Inflation
Even though silver may be far less valuable than gold, this value has still grown over time. A silver dollar today will cost much more than it did in 1900. Unfortunately, paper currency has gone the opposite direction and lost value in that time.
Selling High While Avoiding Taxes
When you withdraw assets from certain IRAs, you typically owe taxes on the profit immediately. If you sell bullion from a silver IRA but keep the money in the IRA, you won’t be taxed. This means you can sell when silver is high and still defer taxes.
Portfolio Diversification
When you have a precious metal IRA, you get many of the benefits of owning physical bullion. One of these benefits is diversification. Precious metals have an inverse relationship with many other assets, so they’ll often safeguard your retirement.
Disadvantages of Silver IRAs
Unfortunately, no investment is without its disadvantages. In the case of precious metal IRAs, there are quite a few to discuss. Each of these drawbacks are relative to normal individual retirement accounts, so you may be better off opting for traditional or Roth options.
No Access to Silver
People often invest in silver because they’re worried about economic collapse. If that silver is in a depository across the country, though, how would you go about quickly accessing it? Not having access to their metals during an emergency is a major deterrent for some.
There is a way around this, but it involves setting up a limited liability company (LLC) and placing it into the silver IRA. You can then store your bullion closer to home. Unfortunately, this is a time-consuming task that barely seems worth it to some people.
Complicated Silver IRA Setup
You could likely set up a traditional IRA from your laptop in a matter of minutes. For funds that allow silver investing, though, you’ll need to find a custodian and an approved depository. You’ll then need to purchase your precious metal and have it transferred to that depository.
If you’ve already set up an account, Silver Gold Bull can simplify the remaining steps for you. Visit our Precious Metals IRA page today to see how easy the process can be. After you buy bullion from us, we take care of the rest.
Potential for Scams
Silver IRAs are a legitimate vehicle for retirement savings. Unfortunately, some unscrupulous companies try to take advantage of people. Many of the ads you see for buying silver and gold for an IRA are from companies that sell rare coins for inflated prices.
The problem with buying uncommon coins is that their value doesn’t rest in silver content. This means you’re not actually investing in bullion, so it’s unlikely you’ll ever see a profit in your IRA. If you choose to go this route, always buy common coins from reputable dealers.
Bullion Wins
You may notice that several benefits of silver IRAs (e.g., inflation hedge, diversification) are the same benefits of owning bullion. You don’t need a retirement account to garner these, so many people opt to simply buy precious metals and store them at home.
Opening a Silver IRA
Investing in silver is a great option for retirement — whether you handle it yourself or have an IRA. Unfortunately, many people don’t know how to start the process. This is a major reason why some folks find themselves dealing with disreputable companies.
Once you choose a company to work with, you’ll need to fund your account with precious metals. This is where working with a company like Silver Gold Bull can prove helpful. If your account is already set up, we can handle everything else.
Alternative Retirement Options
Many people love the idea of investing in silver for retirement, but an IRA simply doesn’t appeal to them. Fortunately, there are other ways to go about this. Your specific investment goals will dictate which of these options is best for you.
- Invest in silver stocks: Precious metal mining firms, refiners, retailers, and a variety of other companies sell public stock. You can invest directly in precious metals without purchasing and storing bullion.
- Silver ETFs: Exchange-traded funds allow you to invest in a commodity without owning it. Silver ETFs track the price of the precious metal, but they may not follow it perfectly. Just like silver stocks, these involve companies with their own issues.
Each of these retirement plans have a disadvantage over silver IRAs: you don’t actually own bullion. Of course, IRAs have their own drawbacks when compared to simply purchasing and storing bullion.
Regardless of how you choose to save for retirement, you should always consider owning precious metals. Paper investments are a great means of diversification, but it never hurts to own a physical commodity to hedge against poor economic conditions.
Invest Smart and Buy Silver Bullion Today
Whether or not a silver IRA is right for you is a personal decision. Maybe opening such an account is smart in your situation, but perhaps you prefer storing precious metals on your own. Regardless of which strategy you opt for, buying bullion is the first step in your journey.
The most important thing to remember is that vigilance remains your top priority. Base your decisions on your financial goals, and research every purchase and investment you consider making. This could easily be the difference between retirement comforts and lost profits.
At Silver Gold Bull, we strive to help our clients meet their individual investment goals. That’s why we can ship bullion to you directly or deposit it to your silver IRA. Regardless of your decision, visit our Silver Bullion product page and start planning your financial future today.
