Many investors know that they should diversify their investments. And more and more investors are starting to diversify by creating a gold IRA (also called a gold-backed IRA). This is an IRA that’s backed by physical gold.
Maybe you’ve heard about the gold IRA. Perhaps you’ve even thought of creating your own gold-backed IRA. But if you’re like a lot of people, you still have questions. Here are your answers…
Why create a gold IRA?
The reason why many investors are creating gold-backed IRAs is to protect their investments. Traditional IRAs are backed with paper-based investments, such as stocks and bonds. However, these traditional investments are vulnerable to inflation, currency devaluation, human mistakes or corruption (think Enron) and even political unrest.
A gold IRA is different because gold tends to hold its value. Indeed, gold tends to rise when the stock market sinks. So when the economy suffers, those with a gold-backed IRA tend to sleep well at night.
Can you convert an existing IRA into a gold IRA?
Yes. You’ll just need to set up a self-directed gold IRA and instruct your custodian to fund the gold IRA with your selected gold investments.
Can you fund your gold-backed IRA with your existing gold investments?
No. The IRS rules require that you must purchase specific types of gold for your gold-backed IRA, and that you cannot use any of your existing gold investments.
Can you store your own gold for your gold IRA?
No. The rules state that the gold for your gold IRA must be held in a trusted repository. When we help you set up your gold IRA here at 57Gold, we’ll also make sure your gold is stored safely.
What kind of gold is accepted into a gold-backed IRA?
The IRS does have specific rules about what types of gold you can use to fund your gold IRA. These rules include:
- The gold in your gold IRA must be 99.5% pure.
- Only legal tender coins are allowed in a gold IRA. These coins include the Canadian Maple Leaf, the American Gold Eagle, the Perth-Mint Lunar series, Kangaroo Nuggets and Austrian Philharmonic coins.
Can you buy gold mining stocks?
Yes, you can include gold mining stocks in your gold IRA. However, keep in mind that gold mining stocks are vulnerable to the problems mentioned before, such as a bad business model, bad management, or even corruption (all of which can cause the stock to fall or even cause the company to go bankrupt). As such, it’s best if you also include physical gold in your gold-backed IRA.
How do you get started creating a gold-backed IRA?
You’ll either need to create a new gold IRA, or rollover an existing IRA or 401k. Either way, you’ll need to create a self-directed gold IRA. You’ll then need to give your trustee instructions about what kinds of gold to include in your IRA, along with the specific instruction to have 57Gold fund your gold-backed IRA.
We here at 57Gold have experience in helping people walk through the process of setting up a gold IRA. We’re not accountants, but we do know gold – so give us a call today to see how we can help you protect your wealth with a gold-backed IRA.