Platinum is one of those precious metals with long term growth owing to rare value which can play a unique role in retirement planning. It is tipped over gold, silver and other precious metals due to rare availability and approval from IRS. You can get IRS approved platinum under Self-Directed IRA (SDIRA) as they are under strict rules and regulations from IRS and mostly minted by government, thereby making them an ideal choice for portfolio diversification. This article will discuss in detail on why platinum qualifies and how you can get it and consider as one of your retirement benefits.
What is IRA approved platinum coins and why consider them?
IRA approved platinum coins are the specific platinum coins which are minted by the government and fulfils the IRS standardization for after retirement benefits and get included under Self-Directed IRA (SDIRA). These coins provide another source of investment and diversification of portfolio beyond stocks and bonds. If you add IRA approved platinum coins in your investments, then you can expand your portfolio, protect against inflation and aim for long term growth. Since platinum is rarer than gold and silver, so it can see its demand rising over the time
IRS guidelines for IRA-approved platinum coins
IRS has set some clear rules and regulations under Section 408(m) for the inclusion of platinum coins in SDIRA. These rules are such that it avoids the coins on being marked as collectibles or rare coins. For platinum ones, it should basically meet purity and origin requirements:
- Regulation: Outlines on what precious metals are allowed for investment under IRA under Section 408(m).
- Purity Standard: Platinum coins should be 99.95% pure which confirms their higher quality.
- Minting Condition: The coins must be minted by the federal government for authenticity and reliability reasons.
- Storage Rule: The coins must be stored with an approved trustee or custodian and not to be personally kept.
List of IRA approved platinum coins
Although IRS doesn’t specifically mention which platinum coins are to used under Self-Directed IRA, but there are several platinum coins which adhere to the regulations set by the IRS – having a minimum purity of 0.9995 (99.95%) and are minted by the federal government. Following is the list of some popular IRA approved platinum coins that meet the standards:
- American Platinum Eagle – It is known for 0.9995 purity and has a legal tender status which is minted by the U.S. Mint.
- Canadian Platinum Maple Leaf – It is issued by the Royal Canadian Mint and is widely recognized and authenticated by the Canadian government.
- Australian Platinum Koala/Kangaroo – It is minted by the Perth Mint of Australia and conveniently meets IRS purity standards.
- Austrian Platinum Philharmonic – It comes from the Austrian Mint which highlights its musical heritage and is IRA approved.
- British Platinum Britannia – It is issued by the Royal Mint, which combines the 99.95% purity with British imagery.
There are other platinum coins which does not qualify due to lower purity or being a collectible status.
How to invest in platinum coins through IRA
You can get an investment in IRA approved platinum coins by first opening a Self-Directed IRA (SDIRA) with an authorized custodian to handle the precious metals. The perks of having a custodian are that it is IRS compliant, manage reports and ensures smooth transactions. Choose the experienced one having strong customer support and transparent fees. The next step is to fund the SDIRA by moving the account or transfer the assets from existing retirement account like 401(k) or a regular IRA. Make sure the transfer follows the IRS rules to be tax and penalty free.
Once you get the funds, then select the IRS approved platinum coins from a reputed dealer. Make sure the coins are 99.95% pure and issues by the approved government mints. The coins must be stored in IRS-approved depository as storing in home nullifies tax benefits.
Pros and Cons of Platinum IRAs
There are multiple benefits in investing in IRA-approved platinum coins. Platinum is having a high value because it has more industrial demands – in automotive sector, medical devices and clean energy technologies. Also, it is a rare Earth element which makes it a long term valuable physical asset against market ups and downs, and ensures to keep strong purchasing power during inflation. This is why you should consider adding this in your retirement portfolio.
But IRA approved platinum coins comes with some risks and other costs. Platinum prices are volatile and are also judged by the market value – if there is a slowdown in main sectors where it is used, then it’s value may decrease. There can be cost of maintenance – setup, administrative, and secure storage fees which can decrease the overall returns. Therefore, a careful planning is required before you secure the IRA approved platinum coins.
Tips for investors to hold IRA Approved Platinum Coins
Before you start investing in IRA approved platinum coins, make sure the coins meet the IRS standards, i.e. being 99.95% pure, issued by the government mint and not be a collectible coin. Confirm the coin specifications with a reliable IRA custodian and deal only with the reputable dealers who have experience in precious metals and know all IRS guidelines. It ensures transparency in fees, compliance with rules and handle smooth and secure transactions.
To get maximum returns, study the market trends. Platinum’s value is judged by the industrial requirements, economy and supply. Try to time the purchase during market slowdown to get long term gains. Remember, profits in SDIRA and qualified Roth IRA withdrawals are tax free.
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