A precious metals IRA, or Individual Retirement Account, is a kind of financial account that allows holders to buy into stocks and other financial products on a tax-deferred basis. The idea of the individual retirement account is that persons and families can save for retirement without paying taxes on capital gains, where growing their money through capital gains will help them provide for income after they retire. In a precious metals IRA, the holdings of the IRA include items like silver and gold known as precious metals in the financial world.
Although gold and silver are the most popular precious metals, these are not the only precious metals that may be involved in an investor’s portfolio. Platinum and palladium are two other common precious metals that traders and others invest in. All four of these are seen as commodities, physical items that can be traded in various ways. In addition to the above precious metals, there are others called “synthetic precious metals” that are altered or manufactured in a laboratory setting, as well as certain heavy metals that may be less valuable than gold, but still hold some values because of practical uses and relative rarity.
An Individual Retirement Account provides for different taxation of gains, so a precious metal IRA, or other retirement account, is governed by law in many countries. In the U.S., for example, the Employee Retirement Income Security Act of 1974, or ERISA, governs the kinds of items that can be included in an Individual Retirement Account. The federal Internal Revenue Service helps to enforce some of the standards for IRAs, including a special rule for precious metals: only precious metals transactions meeting certain standards qualify as proper and legal IRA holdings. Many other countries hav similar laws, though the specifics may vary
Many individual investors use brokerages or financial firms to help them administrate their retirement accounts. These individuals have to maintain the same kinds of prudent and competent investment strategies that their clients otherwise would. For the service of maintaining a precious metals IRA, individual account holders may be charged for setting up the account, as well as annual fees thereafter, including storage fees for bullion, or other physical precious metals assets.
When it comes to choosing specific equities and holdings for a precious metals IRA, investors and their money managers have a lot of choices. They can buy bullion, or raw gold or silver, as well as numismatic gold or silver. They can invest in mining operations, or buy into complex funds that track the prices of precious metals. All of this can be facilitated by a financial firm that specializes in providing IRAs that include precious metals in a legal and strategically competent way.