Silver and Gold IRAs
Source: David Morgan (4/18/08)
In last week’s column we visited the fact that many saving for retirement might like to have a portion of their funds in true precious metals. I need to make a correction to last week’s article, which stated, “Annual storage fees are charged at a flat fee of $90 per year regardless of the size of the account.” I should have added, “Then after the account is established, GoldStar’s annual storage fee is only 1/10 of 1% of your IRA’s asset value, with a minimum of $50 and a maximum fee of $200.”
What is eligible for a precious metals IRA?
American Gold Eagle gold coins are approved for IRAs. Other gold coins, to be eligible as IRA investments, must be at least .995 fine (99.5% pure) and be legal tender coins. This provision puts Canadian Gold Maple Leafs, Australian Kangaroo Nuggets, Austrian Philharmonics, and the Perth Mint’s Lunar Series on the approved list. Also approved are minimum .995 fine gold bars fabricated by refiners who have been approved by The Commodities Exchange (COMEX).
Conversely, many gold coins, such as Krugerrands (91.67% pure) and old U.S. gold coins (90% pure), are not legal investments for IRAs.
American Silver Eagle silver coins are approved for IRAs. Other silver approved investments must be .999 fine, which makes Canadian Silver Maple Leafs, Australian Kookaburras, Mexican Libertads, and even .999 fine silver rounds also eligible. Bullion bars are acceptable as long as they were fabricated by COMEX-approved refiners. This is necessary for the bullion to be stored and recorded at the custodial facilities of HSBC. Pre-1965 U.S. 90% silver coins are not eligible for IRAs.
Platinum coins are eligible for your IRA as well. American Eagle platinum bullion coins, including proof versions, are most commonly used in IRAs. Also acceptable are minimum .9995 fine platinum legal tender bullion coins such as the Australian Koala, Canadian Maple Leaf, Isle of Man Cat, and Isle of Man Noble. Platinum bars that are minimum .9995 fine and fabricated by refiners approved by The New York Mercantile Exchange (NYMEX) are acceptable as well.
Last but not least, minimum .9995 fine palladium bars fabricated by refiners approved by NYMEX are accepted.
The distribution golden bonus!
Precious metal investments offer a stable foundation for safety and security. Once an investor reaches age 70½, a required minimum annual distribution will apply. Here is where a little planning comes in handy! Believe it or not, when it is time to receive your required distribution, you can actually take it in the form of metals from your IRA account. Very few institutions are set up to handle the precious metals component of retirement plans. One of the leaders in the field is GoldStar Trust Company. GoldStar Trust Company for investors who want IRAs that will accept precious metals. You will be responsible for any shipping charges from GoldStar if you choose that option.
“Can I put gold and silver coins I already own in my IRA?”
No; regulations concerning IRAs prohibit that.
“Can I hold the metals myself?”
No; regulations require that metals be held by an approved depository. Even GoldStar cannot hold the metals; consequently, GoldStar has arranged for HSBC Bank USA’s precious metals depository to secure the metals.
“What is the maximum IRA contribution for 2008?”
The maximum contribution for 2008 is $5,000. However, taxpayers age 60 or older may contribute $6,000 annually. If you question the amount you may contribute, check with your tax advisor.
“When can I make my IRA contribution?”
You may make your IRA contribution anytime during the year for which you claim the deduction, or during the following year before you file your income tax form. If you file for an extension, you must make your contribution on or before April 15 of the following year.