How to Ensure Your Precious Metal IRA is Insured

A self-directed IRA is a type of retirement account that allows its owner to manage their own investments. This type of IRA is not limited to traditional securities such as stocks and bonds, but also allows for alternative investments such as real estate, commodities, and precious metals. With gold prices rising this year, many investors are looking for ways to insure their individual retirement accounts with precious metals. When investing in a self-directed IRA, you cannot move or add gold that you already have.

Instead, you must purchase the gold through a custodian. The custodian will buy the gold on your behalf and arrange for it to be delivered to a secure facility that specializes in the protection of precious metals. Some precious metals merchants believe that a “checkbook” LLC allows the owner of an IRA to store physical gold in their home, since the ingots are owned by the LLC and not directly owned by the IRA. The IRS does not allow you to store the precious metals you have invested in your IRA in your own home.

A platinum IRA is an IRA in which some of your assets are invested in forms of platinum ingots approved by the IRA. Depending on your wishes, the gold you hold through a self-directed IRA and that you store in the warehouse can be kept in the same storage area as the precious metals of other asset holders, or it can be kept alone. If you want to be exposed to these investments without having to open a special type of IRA or find custodians, agents and custodians, consider investing in securities such as exchange-traded funds (ETFs) or mutual funds that track indices or prices of precious metals. Precious-metal IRAs generally only make sense if you have a strong portfolio and want to diversify your investments by reserving a small portion for physical gold, silver, platinum, or palladium.

Opening a self-directed IRA and investing in precious metals is more complicated than opening a traditional IRA or a Roth IRA. Depending on your financial situation, most experts recommend that you invest no more than 5 to 10% of your retirement funds in precious metals. Peter Thomas, senior vice president of Zaner Precious Metals and a precious metals trader for about 40 years, says he has seen a steady flow of money into these IRAs over the past 15 years. These minimum withdrawals can be more complicated, since you'll be forced to make them at intervals equal to those of the complete pieces of precious metals you own, and individual precious metals can sell for thousands of dollars per ounce.

If you die, your IRA and assets will be transferred to the beneficiary or beneficiaries of your IRA. A ROTH IRA can own gold and precious metals eligible for an IRA just like any other IRA, including a traditional IRA, a SEP-IRA, a SIMPLE IRA, an inherited IRA, a cumulative IRA, and a spousal IRA. The IRS requires that precious metals owned by an IRA be stored in the possession of a trustee or custodian. The depositary will manage payments and the dealer will send your precious metals to the warehouse.