Should We Really Put Gold in an IRA?
By Jeff Clark, Senior Precious Metals Analyst
In the realm of retirement planning, gold often receives mixed reviews. Some experts outright reject the idea of including it in an IRA, while others advocate for it as a strategic asset. But what’s the real story? Let’s dive into the arguments surrounding gold’s role in retirement accounts and explore its potential benefits and drawbacks.
“Gold is one of the dumbest things to put in your IRA,” proclaimed a glib TV commentator, flaunting his perfectly coiffed hair and dazzling smile. “Everyone knows income-producing vehicles are best for an IRA.”
This perspective seemed to come from someone who hadn’t delved deeply into the topic. His advice was not only misleading but also incomplete, leaving me to wonder how many viewers might inadvertently harm their portfolios by following such misguided opinions.
To clarify, he is partially right: The tax benefits associated with an IRA do indeed make income-generating assets attractive, particularly when considering compound growth. However, gold does not generate any income.
Additionally, there’s another significant downside to placing gold in an IRA: loss of confidentiality. Unlike other assets, gold still offers a degree of anonymity, which is lost when you put it in an IRA.
This may lead some people to agree with the flow of that TV commentator and disregard gold as a valid retirement investment. However, these points shouldn’t deter you from allocating some portion of your retirement portfolio to gold. On the contrary, the case for a gold IRA has strengthened, and neglecting this opportunity might be a critical error in your investment strategy.
A Gold IRA Is a Strategic Portfolio Move
There are compelling reasons for every investor to consider including gold in their IRA. Reflect on which of these apply to your situation:
Your IRA represents a significant portion of your investment holdings. If this account houses most of your investment funds, it’s likely your sole opportunity to incorporate physical gold into your portfolio.
You’re looking to diversify into a tangible asset. Consider this: if your retirement account consists solely of stocks and bonds, your investments are restricted to paper assets. In today’s economic climate, that poses a substantial risk.
You desire tax-advantaged growth. Like any asset, gains can accumulate tax-deferred within an IRA (or tax-free in a Roth). This presents an opportunity to reallocate investments without triggering a taxable event, such as adjusting your gold holdings to invest in silver.
You need a hedge against inflation for retirement. A common criticism against gold is its lack of interest generation. However, not incorporating an inflation hedge in your retirement portfolio could be equally shortsighted, especially in our current economic landscape. It’s crucial to remember that your account’s “profit” is always subject to inflation, which erodes value over time. The solution lies in utilizing gold, one of the best-known inflation hedges.
Clearly, integrating some precious metals into your IRA can offer substantial benefits.
So, should you immediately reach out to a company promoting gold IRAs? Not so fast. Here’s why…
The Outdated Practices of the 21st Century
The process of establishing a gold IRA has historically been slow and cumbersome. U.S. regulations mandate that IRA assets be held by a trust company to ensure proper tax reporting and recordkeeping. Unfortunately, most gold dealers do not serve as trust companies. Therefore, they need to collaborate with an external trust company willing to secure physical gold.
When a gold dealer proposes purchasing gold for an IRA, the process typically involves the following steps:
– Open an account with a gold dealer
– Establish a separate IRA account with a trust firm (often requiring paper forms)
– Fund your account at the trust
– Request gold purchases from the dealer
– Wait for the funds to transfer and settle the order
This process can take anywhere from 30 to 45 days. Even if you already possess an IRA or have an established relationship with a dealer, it can be time-consuming. Moreover, dealers frequently impose significant fees when buying gold for an IRA. When you want to liquidate or withdraw your gold, be prepared for more paperwork, verification steps, and shipping costs, extending the process another 2 to 3 weeks.
The outdated nature of this system has resulted in delays, unexpected expenses, and continuous frustration for many IRA holders. Here are some frequent complaints:
– IRA transfers can take up to 30 days to complete, depending on the custodian’s follow-up procedures.
– Deposit confirmations are often delayed and not automated.
– Clients cannot lock in orders until the custodian verifies the cash balance, exposing them to market risks.
– The purchasing process typically requires 8-10 business days for settlement.
– Metals are shipped to the custodian’s vault, and the IRA holder bears the associated costs.
– The custodian may not always track deliveries accurately, raising concerns among investors.
– Storage options may be limited, with most custodians offering only one or two locations, typically in Delaware.
– The selling process is often costly and protracted.
– Poor customer service has been a major issue, with clients being referred back and forth between dealers and custodians.
Fortunately, the Hard Assets Alliance has revolutionized how gold IRAs are managed.
The New “Gold” Standard in IRAs
The Hard Assets Alliance (HAA) has streamlined the gold IRA process, minimizing the hassle associated with opening an account. In many cases, you can complete the entire process online. This innovative service is worth highlighting, especially with deadlines approaching for contributions.
HAA’s program significantly reduces both time and effort. Their online platform allows you to create an IRA and trust account simultaneously.
Entrust, a reputable custodian, manages the trust account, and applications are processed in real time. Typically, you can set up a traditional or Roth IRA in just 10-15 minutes, whereas SEP and SIMPLE accounts take about one to two weeks. Entrust is also ready to assist with transfers, making the process straightforward and user-friendly.
Moreover, there are no additional fees for buying or selling precious metals within an HAA IRA, enhancing the ease of transactions.
This might be the only fully automated online IRA accommodating physical precious metals. Personally, I found that opening an IRA with HAA took about ten minutes, and my approval came through within five minutes. Plus, I secured one-ounce gold bars at less than 3% above spot prices due to HAA’s bidding process that connects you with a network of dealers, providing you institutional rates.
Additionally, only eligible bars and coins are available, ensuring compliance with regulations that, if ignored, could invalidate your IRA and incur tax liability—but this is not an issue with HAA.
Store Your IRA Gold in Zurich
While foreign gold storage for IRAs offers advantages for U.S. investors, the setup has traditionally involved a complex and costly process. Now, you can store gold Eagles exclusively in Zurich, Switzerland.
This option is rare within the industry, with no minimum requirement for vault deposits. This means you can kickstart your international bullion storage initiative with just a single one-ounce gold Eagle.
Furthermore, you can establish a gold IRA with storage in New York City or Salt Lake City, starting with as little as a tenth of an ounce!
And here’s an attractive bonus…
Six Months’ Free Gold Storage for New IRA Accounts!
The April BIG GOLD special offers six months of complimentary storage for all new IRA accounts, encompassing all four metals and three storage locations. This discount makes it exceptionally affordable to initiate your own gold-backed IRA.
This opportunity is exclusively available to readers of BIG GOLD. You can access it through a risk-free trial subscription. This is an enticing offer, valid for contributions made in either 2014 or 2015—meaning you can still reduce your tax liability from 2014 if you act quickly.
The case for incorporating gold into your IRA continues to grow. With the Hard Assets Alliance, we can forgo the outdated practices of the industry and leap into a modern, efficient system.
Reflect on your purchasing power as you approach retirement and consider how a gold IRA could effectively safeguard your standard of living in the future.
Sincerely,
Jeff Clark
for Economic Prism
[Editor’s Note: Now is an opportune moment to capitalize on the security, inflation protection, and potential returns that gold investments can provide. BIG GOLD simplifies the process, offering a manageable portfolio of mid- to large-cap precious metals, natural resource producers, ETFs, mutual funds, and more. Jeff Clark serves as the Managing Editor of BIG GOLD.]
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