The reason any of us put money into a retirement account is to avoid paying taxes on the money we do manage to accumulate for our later years in life. Not only does that help maintain the value of money we have earned over the course of our life, it also can lead to significant growth. If you’re not paying taxes on money, there is just more of it to collect interest from. But if you’re looking to invest in a gold IRA, choosing the right type of investment can be critical to your financial success.
You’ve already got money in a retirement account. What about gold?
Many investors that are just beginning to place funds in their retirement account often don’t realize that they can actually put precious metals in an IRA account. They are often taken by surprise when they learn that that’s something that they can do with either a traditional IRA account or a 401k.
Now there are certain rules that apply and transferring or rolling over funds into a new gold IRA account has to happen a certain way. It has to happen between to IRA accounts or between a 401k and a new precious metals IRA. There are a bit of differences between both, such as the fact that funds cannot be transferred out of a 401k before you’re no longer in the employ of the organization funding said 401k.
The different types of IRA accounts
Now there are many difference types of IRA accounts that serve the purpose of protecting your money. SEP, ROTH and traditional IRAs all have different rules and regulations that make dealing with them a bit different from each other.
The best known one is obviously the traditional IRA which has been around since the seventies. On the other hand, a ROTH IRA has been around for under 20 years now, which makes it quite new. In both cases, all funds put into them are not taxed, they only are when the funds are withdrawn.
Handling an IRA comes with many rules that can be pretty complicated. Therefore it is best to employ a custodian who is a specialist who deals exclusively in retirement accounts and knows his way around all the rules and regulations that most investors don’t know much about.
The magic of the self-directed IRA
Some people want a more hands on approach. For them, a self-directed IRA is just what they need. On top of providing more control, it also allows investors to put other commodities into their retirement account, such as stocks, bonds and even precious metals. In fact, in order to place precious metals into an IRA, it is essential to first open up a self-directed IRA account.
Once you do choose to place gold into your IRA, choosing the type and amount of gold becomes your top priority. On the other hand, not all gold is allowed to be as part of a gold IRA. Some rare coins simply aren’t allowed. But sticking to proof coins or straight bullion is an easy path that many people take. You can’t go wrong with that.