Retirement planning is such a difficult task nowadays, because of uncertainties due in large part to a financial tumble created by the U.S. housing market and multiple corporate accounting scandals. These were the handiwork of unscrupulous business leaders in conjunction with a flawed system perpetuated by incompetent and corrupt government officials. As a result, prudence dictates the urgency of diversification. There is no better way to do it other than the acquisition and safekeeping of precious metals.
The Silver IRA Rollover
You can choose to diversify your retirement portfolio through the acquirement of precious metals like:
However, silver is the hottest commodity in the market, especially if you’ll consider the 25% increase in value of the said precious metal in recent months. At one point, silver breached the $16 per troy ounce mark. This signifies a strong improvement in performance over other important commodities like gold, copper, and crude oil.
Defining The Silver IRA
A silver IRA is a type of “Individual Retirement Account” that enables the account owner to acquire and hold silver coins and silver bar products. Ordinary IRAs are only good for paper assets, but having a precious-metals-backed IRA is a better option especially when you are looking for a mechanism that serves as a more effective hedge against inflation. In other words, this type of retirement instrument is better compared to the long-term performance of cash deposits or the unpredictability of stocks and bonds.
You’ll also hear the term “self-directed” IRA when describing this type of retirement diversification strategy in order to differentiate it from conventional retirement schemes such as a 401(k) plan. In a 401(k) framework, your employer does all the hard work by simply saving up a portion of your earnings. However, silver, gold, or even palladium IRAs require greater participation on your end as you will be the one to choose the type and amount of precious metals that will be added to your account. It is also your responsibility to study and understand the applicable Internal Revenue laws applicable to this type of investment.
Tax Breaks and Other Benefits
Industry experts believe that the current trend we are seeing right now will continue until the year 2020. Thus, silver will outperform other assets. In addition, this type of investment guarantees a better outcome in comparison to stocks and bonds that are at the mercy of human error and other foibles. Aside from the peace of mind that silver IRAs can provide, diversifying your investment portfolio in this manner will allow you to avail of tax breaks. A tax sheltered retirement savings scheme is good news because it will help you increase your capability to build your nest egg. There is more info about this on 2GOV.
Setting It Up
Look for a qualified tax attorney and seek assistance when it comes to your retirement portfolio diversification needs, especially if you want to venture into a silver self-directed IRA.
After consulting with your lawyer or an accountant, they will tell you that your rollover plan begins with the realization that you can purchase silver coins and bar products through different forms of IRAs such as:
- Regular IRA plans;
- Simplified Incentive Match Plans for Employees or S.I.M.P.L.E.;
- Roth plans; and
- Simplified Pension plans.
It is important to remember that you cannot buy silver products and deposit it to your account. The creation of a retirement saving schemes using precious metals requires you to fund the silver IRA account under the control of a provider or custodial firm. After depositing money to the said account, you can direct the IRA custodian to acquire silver coins and bar products in your behalf. Due diligence on your part is needed in order to choose a reputable custodial firm, however, consider the performance and reputation of the following firms as your starting point:
- American Church Trust
- Equity Institutional
Selection of an Approved Depository
After choosing the best IRA account provider that suits your needs, and after funding the account up to $5,000 dollars in accordance to IRS rules, the next step is to choose a depository that will handle the safekeeping aspect of the process. In a typical deal, your chosen account provider already has a prior agreement with a depository firm, but they can also make recommendations based on your personal requirements.
The final step is to choose the type of silver-based products that you want to purchase. For example, with regards to silver bullion, the IRS gave approval for the acquisition of American Silver Eagle coins, Australian Silver Philharmonic coins, and Canadian Silver Maple Leaf coins. In addition, the IRS also gave the go signal for the acquisition of silver bars that came from NYMEX-approved minting facilities and refineries.
Things to Consider
Rest assured that silver-backed IRAs will grow in value without the need for personal intervention or micro-management on your part. However, certain investors and analysts aired their concerns regarding this particular set-up. They worry over the fact that you cannot take physical possession of the silver coins and silver bar products. You can deposit money into the account and the custodian will process the handling of the said commodity, but in the case of extraordinary events you do not have access to your assets.
It is hard to blame them, especially those who can’t find the wisdom of creating an alternative strategy to protect themselves from several doomsday scenarios. If you will heed their advice, then, you have no choice but to physically acquire, transport, and secure precious metals. If you share the same mindset, it is advisable to deal in silver coins because it is easy to sell compared to silver bars.
I think that is riskier to purchase and secure precious metals on your own. There is no assurance that family members, relatives, and friends will not be tempted to steal it from you. There are so many problems that you will encounter along the way. However, if you can’t trust the system anymore, dig a hole and bury your treasure. Now, if you are like me, I sleep better if my retirement fund is safe with a self-directed IRA as opposed to keeping it for myself in a box full of silver coins buried in my backyard.