Rules For Gold IRAs
When it comes to creating a gold IRA or rolling over a current IRA into a gold IRA, there are a number of rules that must be followed. These rules can seem very overwhelming and you might be afraid of breaking one of these rules when you attempt to purchase gold with your IRA funds. That is why it is very important that you either learn all the rules surrounding gold IRAs or you partner with a custodian and company that is willing to help. Most gold IRA companies will simply purchase the gold you ask and then make sure it is stored somewhere, a great gold IRA company will help you follow all the rules and make sure that you investment is profitable and secure. So what are these rules and how will they affect your desire to diversify your assets?
Believe it or not the IRS requires that your IRA only holds certain types of gold, gold that it considers to be of a high enough standard to be considered an investment. You are allowed to have bullion or gold bars as part of your IRA. However this gold must come from certain accredited manufacturers such as LME, Nymex, LBMA and ISE-9000. All bars in your IRA must contain a minimum purity level of .995.
You are also allowed to have gold coins in your IRA but these coins can only come from a few select countries and they must meet similar standards as the gold bars. You are not allowed to have collectible coins as part of your IRA nor are you allowed to have coin that originate from a mint that has not been approved. Therefore it is very important that you keep track of what gold you are buying and where it is coming from, otherwise the IRS might view it as a withdrawal rather than a transfer or rollover of your IRA. If this happens then you will be subjected to the income tax on the money and if you are under 59.5 you will also be penalized an additional 10%.
You Must Have A Custodian
If you want to invest in gold with your IRA then you must find a custodian that is willing to do this. This can be somewhat difficult because you not only want someone that is trustworthy and knowledgeable but also someone that has the ability to store your gold safely. Most gold IRA custodians will work with a major depository in order to store and protect your gold.
If your current IRA custodian is not willing to invest in gold or store the gold on your behalf then you will need to transfer or rollover your IRA funds to a custodian that is willing. This typically means that you will create a self-directed IRA that will allow you to invest in whatever you want and your custodian will follow your direction. There are several companies that specialize in gold IRAs and they will be happy to explain the process to you and make sure that you are comfortable putting your IRA money in gold.
Time Limits And Funding Restrictions
If you are planning on rolling over or transferring your IRA you will need to keep in mind several restrictions that apply to IRAs. The first is that you must complete the rollover within 60 days, if you do not the IRS will see it as a withdrawal of your funds and tax you accordingly. You will also be prevented from touching money in either IRA accounts (the one you transferred money from and the one you transferred money into) for a full year. So you will need to make sure that you are making the right choice before you start the process.
If you are just starting a gold IRA then you will be subjected to certain funding restrictions. You are only allowed to put $5,000 a year into your IRA. So if you are just starting a gold IRA you will have to build up the funds gradually each year. The only way that you are allowed to put more than $5,000 into your gold IRA in a single year is through a transfer or a rollover.
If you want to find a gold IRA custodian that is right for you, the reviews on this site will go a long way toward helping you understand how several of the top gold IRA custodians work. You can also learn about the fees that are charged and what you can expect from your gold investments. It is important to keep in mind that nothing is a sure fire investment so it is very important to keep diverse assets so you can be protected for the future. If you want to try investing in gold but do not know where to start it is important to work with a gold IRA custodian that is willing to take the time to walk you through the process and offer advice.