An individual retirement account (IRA) that is self-directed specifically for precious metals. With self-directed IRAs, you can invest in a wide range of unique assets, such as precious metals, real estate, and even cryptocurrencies. Although they have almost identical characteristics outside of this, including the same contribution limitations, these go beyond traditional IRA options. Here are some tips on investing for retirement with gold and silver.

1. Calculate the Amount You Can Invest in a Precious Metal IRA

If self-employed, you can generally invest 100 percent of your net income from self-employment in a precious metal IRA. Those who are not self-employed but have a non-working spouse will also be able to contribute based on their non-working income. If you earn more than these amounts, you may still be able to make an annual contribution based on modified adjusted gross income. Additionally, the entire IRA can be invested in precious metals.

2. Determine Your Preferences in a Precious Metal IRA

Those who are self-directed to make their own investment decisions have a lot of freedom. They will be free to buy the exact types of precious metals they want for their IRA, including purchasing and storing them. An individual retirement account in gold or silver can be accepted as bullion, coins, or certificates (paper representations of metal). Alternatively, you can purchase shares in a gold or silver trust that owns the metal outright. Accordingly, your choice of precious metals will depend on what you feel best fits your lifestyle. Some people prefer to buy and store the metal themselves rather than in a trust or through a professional storage company. If you are going to go with a company, we have a list of the best gold investment companies that we recommend you look at before investing.

3. Determine the Same-Day Delivery, Storage, and Safekeeping Precautions for the Precious Metal IRA

Precious metal retirement accounts are subject to the same laws and requirements for valuing, storing, and delivering bullion as any other precious metals IRA. Therefore you should also weigh how much access you want to precious metals. If you prefer a different storage provider, then it’s perfectly acceptable to invest in this type of IRA through that minor operation. However, if you are okay with having a professional storage facility pack and handle the metal, they will also be available to store your metal investment.

4. Consider the Precious Metal IRA’s Premiums

Premiums are the costs over and above the spot price of gold or silver that precious metals dealers charge. When considering precious metal IRAs, it’s best to look at historical premiums to understand market levels. You can then compare them with future market levels to gauge whether premiums will decline due to a change in the market. Additionally, the premiums contribute to the costs of storage and safekeeping, which can be a large chunk of your precious metals IRA. When investing in bullion, ensure that you are paying a fair premium for its quality.

5. Choose a Precious Metal IRA Custodian

Precious metals IRAs require a custodian who holds the precious metals and issues shares or certificates to investors. Several types of custodians include depository institutions, futures commission merchants (FCMs), and trust companies. Trust companies are known to be less costly than others and offer more flexibility, but they may also be more difficult to find. The types of precious metal IRA securities you can purchase may depend on the types of products that your custodian offers for your account. Therefore you should review their offerings and consider which best suits your investment preferences. If your custodians offer high-quality gold bullion, you can invest in shares of a gold trust instead of buying the metal directly.

6. Be Sure You Establish Beneficiary Designations for the Precious Metal IRA

You should establish beneficiary designations in your precious metals IRA, especially if you have substantial assets. Beneficiary designations allow your heirs to be named as guardians of the IRA when it’s time for you to take withdrawals. Therefore this can make it easier for them to access the metal if they die or become incapacitated. However, ensure they know their status as a beneficiary and confirm they are willing to accept such a role.

7. Take Advantage of Special Tax Exemptions on Precious Metal IRAs

Investing in a precious metal IRA can offer you several tax advantages. When you withdraw from the self-directed IRA, it is not taxed as income. The withdrawal value will be based on the current market value of the metal at that time. Depending on your tax bracket, this can be much better than paying taxes on investment gains while accumulating retirement funds. Furthermore, when you make your annual contributions to the precious metal IRA, these are deductible from your income for that year when calculating taxable income limits.

Gold, silver, or other precious metals can be a worthwhile hedge against inflation. Therefore investing in a precious metal IRA can help protect you from inflation’s impact on your savings and investments. While IRAs have some unique requirements for maintaining them, they can be a great investment tool for the future.