Investing in Gold and Silver in an IRA

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An Individual Retirement Account, or IRA, allows people to save extra money for retirement. There are several types of IRAs people can use. First, there is the Traditional IRA. The money is deposited into this account before it is taxed. Taxes are taken out when the funds are dispersed. Next, there are Roth IRAs. Contributions are made with money that has already been taxed. Thus, taxes aren’t taken out when the money is withdrawn. A self-directed IRA gives investors a little bit more freedom. There are more investment options with this type of IRA, and the account holder makes the investment decisions. However, a trustee carries those decisions out.

In the past, most IRA investments went to stocks, bonds and mutual funds, as well as some real estate investment trusts (REIT). Previously these were all relatively attractive options, since they offered a nice balance of risky and safe investments. Now, though, they aren’t as attractive, due to the current economic conditions. Real estate and stocks have grown too risky, and bonds and mutual funds may not produce enough money to compensate for inflation. That’s why investing in gold and silver is becoming a better option. Gold and silver have an intrinsic value, so they aren’t impacted by a faltering economy. In fact, the value of precious metals often rises when the dollar becomes weaker. Thus, poor economic conditions make it a good time for investing in gold and silver.

At one time, you couldn’t invest in gold and silver with an IRA account, but that has changed.

Investing in Physical Gold and Silver
You can purchase gold and silver and then invest it in your IRA. You cannot actually keep it in your possession, though. According to, you need to set up a self-directed IRA with a trustee. The trustee will handle the transactions between your IRA account and the precious metals dealer. Additionally, the trustee will need to store the precious metals for you. He can find storage through a third party, but the precious metals cannot be in your possession at any time.

ETFs, or exchange-traded funds, are an easier option. This type of investment is similar to a stock. The ETF is backed by a precious metal, but the investor doesn’t actually hold a tangible item. Instead, he will own a share of a portfolio. As the portfolio earns dividends, the IRA will receive money. According to, SPDR Gold Trust and the iShares Silver Trust are popular, IRS approved options for investing in gold and silver with an ETF.

You can also choose to buy stock in a mining company. However, it’s important to note that mining stocks are more volatile than other precious metal investment options. Thus, if you do invest in mining stocks, be sure to offset the investment with one of the other options listed.

It’s important to diversify your portfolio by investing in gold and silver. Thus, you can invest in precious metals for part of your portfolio, but be sure to round it out with other investments as well. That way, you will be prepared for any shifts that occur in the market.

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