If you want to live comfortably during your retirement, then you need to start planning towards it. Since you are here we believe that you are no longer merely considering retirement plans, but you have decided on trying out a gold IRA.
For you to set up a gold individual retirement account, you first need to get a company that will be in charge of it. You would need to take your time as you do this, reading up reviews is one way to start checking; you can read more about this here.
Once the company is selected, you would also have to go through some other procedures. This article has been written to walk you through these steps. Below, we have listed out the steps involved in setting up a precious metal IRA and explained each individually.
Step 1: Select The Gold IRA Firm That You Will Work With
As we have said above, the first thing you need to take when setting up this special IRA is selecting the company that you will be working with. The company you select will be in charge of starting your IRA, transferring in funds, buying the precious metals, and making sure the assets are properly stored.
Sometimes, the IRA firm will act as the custodian of your account. What this means is that they’ll be in charge of handling the paperwork for it, as well as ensuring IRS compliance.
You can see that the company will be handling the bulk of the processes. Also, because of how popular precious metal IRAs are now, several companies are offering these services. Therefore, the need of ensuring you choose a reliable and trustworthy firm cannot be overemphasized.
You want to take your time to properly consider the companies available to you before you settle on one because each firm is unique. Each comes with its unique services, customer care policies, and pricing. Hence, you want to be sure that the one you select offers a fair price while also providing top-notch services.
Once you select a company, you will have to complete the account opening form. Some important documents like an I.D issued by the state (driver’s license for instance) will be required. If you intend to fund your gold IRA with a retirement account that you already have, details of this account will also be required.
Step 2: Funding The Account
The next step after selecting a company and opening the IRA is funding. You can fund your gold IRA with any of the 3 methods below:
Rollover
A rollover involves taking a distribution from an existing account and then rolling it into your new one, as is the case here, your new precious metal IRA.
To do this, the administrator of the old account has to be contacted, and they will give you instructions about the process. You can now give the go-ahead for the process to start.
You can visit https://www.irs.gov/ if you would like to know more about rollovers.
Cash Contribution
An investor can decide to use cash, wire transfer, or even a check to fund the IRA. The process involved here can be likened to how you would deposit money in a savings account. If you choose to wire the money, then bear in mind that your bank may charge you a fee for it.
Transfer
Finally, a direct transfer from one account to the new one can be used to fund the new IRA. For this to be done, you would need to fill out the transfer form with the administrator of your current account. The administrator of the precious metal IRA can equally contact them for you. The process involved can span through 5 days.
This option is the most common because it minimizes the chances of falling prey to penalties since it is usually penalty-free.
Step 3: Choose And Buy The Metals
Now that you have money in the IRA, it will be time to select the assets you want to hold. Your account can hold not just gold but other types of valuable metals including silver, palladium, and platinum.
While you can hold these metals, they have to meet the purity and type specification of the IRS. Hence, you can’t just buy anything.
The process involved in buying the asset is often based on the company you choose. Some companies sell the assets so you can simply buy from them directly. Other companies may simply recommend dealers for you and then complete the transaction by paying the dealer for the metals you buy.
It doesn’t matter what option you use, in the end, when the asset is bought, the company would need to have it sent to a 3rd party depository. These storages are often IRS-approved. So you have to be certain that the depository your IRA administrator chooses to house your asset in is IRS-approved.
When To Withdraw
According to the rules of the IRS, when you are 59.5 years old, you can begin to take distributions from the IRA without penalties. If you take any withdrawal before you hit this age, then you would need to pay a 10 percent penalty.
You would be required to take the Required Minimum Distributions once you become 70.5. The amount you would have to take as your RMD is often based on some factors like your account type, age, and so on.
Conclusion
If you have decided to invest in gold with an IRA, then there are certain processes you need to go through to set up the account. These processes are selecting a company, funding the account, and choosing and buying the precious metals. Each of these steps has been properly discussed in this article.
