IRA Approved Silver & Investments
Most investors know the value of a diversified portfolio. Whether that’s stocks, bonds, mutual funds, or even crypto, spreading your investments and risks across a range of instruments has always been a smart plan.
While many of these investments exist as just numbers on screens, investments in a tangible asset like real estate, have also provided lucrative opportunities – none more so in recent times than precious metal investments like silver and gold.
Investments in precious metal, and all the other types of investment vehicles, are of particular interest to those involved in retirement planning. Looking to develop substantial Individual Retirement Accounts (IRA) is the goal of many who are looking to plan for a comfortable life once they finish work – could investing in a precious metals IRA help?
A precious metals IRA can be a good way of planning for your retirement, but there are guidelines. You need to consider allowable precious metal for your IRA, and this is where IRA approved silver comes in.
What is IRA Approved Silver?
It used to be quite limited as to which precious metal IRAs would be able to invest in, with just American Eagle gold and silver coins eligible for IRA investment, but that has now changed to include a wide range of precious metals, including foreign coins, as long as they meet certain criteria.
In order to be IRA eligible, just like other precious metals eligible for IRA investments, silver needs to meet certain fineness and manufacturing requirements
While there is a whole range of silver coins and bullion available to invest in, it is only those that meet the above fineness and manufacturing criteria that will be IRA eligible.
It is the job of the Internal Revenue Service (IRS) to regulate Individual Retirement Account investments, and they provide more information on what is and is not eligible for IRA investment, and more specifically IRA allowable precious metals.
What are the Requirements for IRA Approved Silver?
As mentioned above, the key requirements for IRA eligible silver relate to its manufacture and purity, more specifically, to be IRA certified silver will need to meet the following criteria:
- Purity: IRA approved silver has minimum fineness requirements of 99.9% pure (or .999 fine silver)
- Government or Accredited Minting: silver for IRA investments must be produced by the national government mint or a suitably accredited manufacturer and carry their mint mark
- Format: Some precious metal custodians may also have restrictions on whether they will accept only silver coins, silver bullion coins, proof coins, or bars of silver.
What are the Benefits of Investing in IRA Approved Silver?
As with other precious metal investments, there are several benefits of investing in IRA-approved silver that can help with diversifying your retirement savings.
- Portfolio Diversification
As with any investment portfolio, diversification is a sensible approach, and retirement planning is no different. By diversifying your retirement portfolio and investing in a range of vehicles, such as IRA-eligible silver, your overall investment could be less susceptible to fluctuations in particular markets. - Tax Advantages
In a similar way to traditional IRA investments, IRA eligible silver investments could offer the possibility of tax deductions on your contributions, and they also typically offer the potential of tax-deferred growth on the money your investment earns. - Long-Term Potential
As assets like IRA-eligible silver are often held as longer-term investments, they can help to significantly contribute to the growth of your retirement investment over the long term. - Hedge Against Inflation
One of the attractions of precious metals like silver and gold is that, even during times of economic uncertainty, market fluctuations, and inflation they typically maintain their value well, which makes them good at balancing out other, more susceptible investments when they aren’t performing as well.
What to Consider When Thinking About Silver & Other Precious Metal IRA Investments
As you can see from above, there can be some attractive benefits of a range of precious metal investments, with everything from gold coins and certain foreign coins, to Canadian Silver Maple Leafs, American Silver Eagles, and silver bars. But whatever IRA allowable precious metals you choose to invest in, there are some important considerations you will need to think about.
Organizing your Silver IRA investment
The IRS requires you to work with a self-directed (i.e. they don’t provide investment advice but merely arrange your investment) IRA custodian to manage the investment process and set up your precious metals IRA investment. They will purchase the silver on your behalf with the account you have funded and organize its safe storage at your chosen depository.
Storage & Security
IRA-eligible silver must be stored in an IRS-approved depository, otherwise, additional taxes and penalties could apply. You can choose an authorized depository, or work with one recommended by your IRA custodian, be sure to check you are happy with this arrangement.
Choosing your IRA Eligible Silver
You need to select a reputable IRA approved silver dealer to provide you with the silver products that meet the requirements for use in an IRA investment. Your custodian may suggest a precious metals dealer but you need to ensure they are appropriately certified and registered.
Income & Investment Potential
Because silver is a physical asset it doesn’t provide you with any income you may get from other investments, such as interest on savings, dividends from shares, or rental from real estate. Your investment is reliant on the price of silver going up, and silver prices can also go down.
Fees & Regulations
You’ll discover various fees for the setup and maintenance of your Silver IRA account, plus there will be fees for the storage and insurance of the silver in your IRA. It’s up to you to make sure you are aware of all the fees involved in this investment option. Withdrawals before the required age may also result in additional fees and penalties.
Should You Invest in IRA Eligible Silver?
So, as you can see from the information about IRA-approved silver above, moving some of your retirement investment to a silver IRA or other precious metal IRA can offer a range of benefits for your financial planning once you finish working – but is investing in IRA eligible silver right for you?
Only you can answer this once you have gathered all the facts from your chosen financial advisers and the different parties involved in the setting up and management of a silver IRA investment, but to sum up this article, here are some of the key things to bear in mind.
To be IRA eligible, the silver you invest in must be of a certain fineness and produced by an approved manufacturer. Even then, not all types of silver will be eligible for IRA investment, so you would need to ensure the silver you’re planning to invest in meets the necessary requirements.
You will need the assistance and resources of a number of services, a self-directed custodian to organize setting up the investment, an approved depository for your silver, and an accredited precious metals supplier to provide you with the asset. While your chosen custodian can help recommend these different services, you need to make sure each is trustworthy and suitably accredited before you go ahead.
Investing in silver and other precious metals can come with fees and charges that are not applicable to other, more traditional assets and investments. Precious metal investments also don’t provide an income during their life, so there will be no interest, dividends, or rental income. The success of your investment relies on the price of silver increasing over the time you hold it, and this price can be quite volatile, and also go down as well as up.
Precious metal investments for your retirement planning can be a great choice if they help to diversify your current portfolio and you understand all the requirements, costs, and risks. Be sure to do your homework before considering this type of investment, and as with all investments, make sure you seek professional and reliable financial advice from organizations knowledgeable about investing in IRS-approved silver and other precious metal IRAs.