Why Choose a Precious Metals IRA?
The main advantages of investing in precious metals through an IRA are tax benefits. By using an IRA to purchase precious metals, the investor either saves taxes now or in the future. The specific tax benefits depend on if you choose a traditional or a ROTH IRA.
Popular Traditional IRAs
Traditional IRAs allow investors to put pre-tax (tax-deductible) money into their IRA to be invested in assets of their choice. That money can then grow over time tax-free, and upon retirement age (currently 59.5), the investor can begin to withdraw from the account without penalty and pay taxes on the amounts withdrawn. Additional benefits as follows:
- By contributing to a traditional IRA, you may be able to lower your current tax bracket as your contributions are tax-deductible.
- A traditional IRA will allow you to invest more money because taxes are not deducted from the original investment capital.
- Investors who are in too high of a tax bracket to qualify for a ROTH IRA can still choose to contribute to a traditional IRA.
- Early withdrawals can be taken without penalty in the event of unusual circumstances such as a 1st home purchase or medical bills.
- Investors should consider choosing a traditional IRA if they anticipate their tax rate at retirement to be lower than their current tax rate.
ROTH IRA
ROTH IRAs allow investors to put post-tax money into their IRA to be invested in assets of their choice. That money can then grow over time tax-free, and upon retirement age (currently 59.5), the investor can begin to withdraw from their account without penalty and without any taxation, provided the account has been open for at least 5 years. Additional benefits as follows:
- ROTH IRAs ensure that your qualified withdrawals in the future are tax-free because you already paid taxes up front on contributions.
- Investors who are over 70.5 can still contribute to ROTH IRAs.
- ROTH IRAs have no Required Minimum Distributions (RMD).
- Investors should consider choosing a ROTH IRA if they anticipate their tax rate at retirement to be higher than their current tax rate.
New vs. Existing IRAs
Our self-directed IRA custodian partners are not only able to help set up new IRAs, but can also help you with a 401(k) rollover or transfer of existing assets. Make sure to be very careful when performing an IRA transfer or rollover, as if these transactions are not performed properly they can actually trigger a major tax event on your savings. Our IRA custodians are more than happy to help you with a transfer or rollover in the seamless and correct manner.