Self-Directed IRAs for precious metals have their fair share of benefits, including a high growth potential and tax advantages.
With a precious metal IRA account, you are able to circumvent the usual limitations that a regular IRA account has when it comes to precious metals. Rather than only being able to account for things such as bonds and mutual funds, you are able to use a self-directed precious metal IRA to have the kind of security you need when facing a volatile market. Many experts agree that precious metals have more long-term stability than paper assets can provide on their own.
No matter how secure any brokerage or bank may seem, there is always a margin of error that has to be accepted. In certain circumstances, the real risk posed by potential failure of a bank or brokerage can be extraordinarily damaging to those who depend entirely on the dollar for their purchasing power.
By having a self-directed IRA in precious metals, however, you can always be assured of your security through the endurance of physical bullion.
A self-directed precious metal IRA has its share of tax advantages. You are allowed to both physically possess and withdraw your precious metal holdings under the same regulations that are generally extended by the conventional IRA distribution arrangement.
With your precious metals IRA account, you can engage in selling, holding, and purchasing your metals in the same manner permitted by other assets held in a general fund.
A precious metal IRA is more dependable due to the implementation of high-security depositories that protect the physical bullion in highly secure locations. You have a generous amount of flexibility in determining just what kind of depository you’d like your physical metals to be protected in.
After you have established the depository where your physical metals will be stored, you are able to physically track shipments to confirm that your holdings have reached their destination safely. Many top-end depositories are relatively generous in the different varieties of physical metal commodities they store, so anything from bars to coins should be accepted.
3. Competitive Fees
Not only is a precious metal IRA a highly secure investment, but it also does not require extremely high fees in order to produce benefits. The most reputable precious metal IRAs carry rates as low as $75 per year. These small fees increase your protection from high net financial losses.
Many investment advisors are likely to tell you that it is a well-advised plan to diversify your investments. Despite the fact that this advice is prevalent, many investors are left unaware of just what value a diversification of precious metal IRAs can offer.
A self-directed IRA gives you a much fuller and more dynamic level of authority over your portfolio by evenly distributing your net risk and providing you with a higher degree of flexibility than other registered securities. By expanding your portfolio beyond the most standard paper assets, you can put yourself in the position of empowerment with a balanced investment plan.
Having all of your investments localized to a single asset puts you at extraordinary risk of being at the mercy of unexpected downturns in that asset’s value without any security net beneath you. By investing in a precious metal IRA, you can have a level of diversification that ensures the likelihood of your assets playing against one another in market downturns.
Historically speaking, gold’s value does not move concurrently with the trajectory of stocks. Therefore, you can be assured of your potential to have some form of security in the events of a sudden crash in the dollar’s value.
Unlike stocks and mutual funds, precious metal holdings have a constant base value that is unaffected by the rise or fall of any company or business. Having all of your holdings in stocks can put you at risk of owning things that can be reduced to absolute zero in the worst-case scenario. Precious metal holdings, on the other hand, will never be completely stripped of all of their value simply because of an unfavorable performance trend.
Not only are precious metal holdings free from the risk of being “zeroed out” by an unfortunate fiscal quarter, but they can also be far better protected against inflation. This cements their value as retirement plan assets. Adding precious metal to your retirement portfolio can give you a smarter consolidated risk reduction strategy by having something that is likely to move in the opposite direction of paper assets.
Because mutual funds and bonds are almost always at the mercy of the economy, no matter how the economy may be faring, their growth potential is not always as secure as investors would like them to be. Though the economy has an unpredictable effect on the value of paper assets, holdings in precious metals have historically been shown to increase during periods of economic instability. Not only is gold capable of remaining valuable in tumultuous economic times, but the return on it can potentially be even greater than that of short-term government bonds.
Having significant holdings in gold or other precious metals can give you access to something with much more consistently sustainable purchasing power than any economically vulnerable paper assets, protecting your retirement plan from being dashed in worst case scenarios.
Why Precious Metal IRAs: An Overview
A precious metal IRA gives you the potential to have a truly diversified portfolio that is well protected against the unpredictable nature of the market. By supplementing your paper asset investments with physical metal holdings, you can have a constant safety net that is likely to move in the opposite direction of paper assets whenever there is economic strife. You can enjoy the same tax advantages of a conventional IRA while never fully being at the mercy of market corrections that are impossible to predict with certainty.
If you would like to learn more about investing in precious metals, contact Provident Metals. We offer custom recommendations and information on how to get your own self-directed precious metals IRA started.