Help with Year-End Retirement Account Planning
Year end is drawing closer and investors are thinking about their retirement accounts. Many of them are looking at nice gains in their stock portfolios and wondering if the extraordinary run in equities can continue.
The bull market is getting long in the tooth, but next year is an election year… and that can be good for stocks. But if one of the avowed socialists currently competing in the Democratic primaries should manage to become president, it could be bad news for stocks.
Those who want to diversify and pull some chips off the table should take a look at a self-directed IRA. This type of retirement account allows you to switch some or all of your conventional paper assets for tangible assets such as gold, silver, and real estate.
Precious metals IRAs represent true diversification. Brokers and financial planners often talk about putting together a good mix of investment assets, but they generally recommend a portfolio stuffed with nothing but Wall Street securities.
Conventional advisors focus almost exclusively on stocks, bonds, and mutual funds -- the types of investments that could suffer badly during the next financial crisis.
It is easy to transfer funds from a conventional IRA. And precious metals IRAs often cost less than plans being offered by Wall Street banks and brokerages.
Annual maintenance and storage fees for $100,000 in IRA funds invested in physical gold, including the storage at Money Metals Depository, are approximately 35 basis points (.0035) for the first year and 20 basis points (.002) ongoing. The maintenance and management fees built into ETFs and mutual funds can be triple that amount.
There are a number of good IRA companies offering self-directed plans. Picking one is easy.
Start by evaluating the basics. Choose a firm with a reputation for providing great service and competitive fees. You might give extra points for a firm that is well established in the industry. A bit of online research will tell you what you need to know.
We do not recommend using custodians charging more than $150 in annual fees or those charging more than $50 to process a transaction.
There are some very good IRA firms we vetted who charge fees significantly below those levels. Some are listed here.
Firms which have a website where users can enroll, view, and manage transactions online will be a major consideration for investors who prefer the convenience of managing their affairs electronically.
If you prefer to deal in person, inquire by phone. See if it is easy to reach someone live and evaluate whether they seem knowledgeable and service oriented.
Avoid IRA custodians that attempt to steer you into particular products or programs. Some “rare” and “proof” coin dealers have special arrangements with custodians in order to pitch investors on high-premium “rare” coins.
Those over-hyped coins generally do not perform well for anyone but the dealers selling them and should be avoided like the plague. (The Wall Street Journal published an extremely damning article about the proof coin market in 2017.)
Likewise, investors should avoid “self-storage” metals IRAs. The cost to set up and administer these plans tends to be very high.
But the real problem is that taking physical possession of metals held inside an IRA involves significant risk. The IRS has indicated it will disqualify these types of plans.
The rules state that IRA assets must be held at arm’s length by a third party. IRS officials are signaling their disapproval of the self-storage IRA scheme. When they disqualify an investor’s IRA, taxes and penalties on the entire IRA balance are imposed.
Moreover, you should choose a reputable depository which offers segregated storage, outside of the COMEX vault system. There is good evidence that the non-segregated metal in COMEX vaults has been rehypothecated, or pledged as a sort of collateral, multiple times.
No investor wants to find out they are basically an unsecured creditor after another party makes claim to the precious metals they thought they owned outright.
That isn’t the only issue with non-segregated storage. We know from experience that investors can be victim to a costly switch. They buy coins or other bullion products which are in good condition but store them within a pooled account. Later, when it is time to sell, the depository staff arbitrarily ships some scratched, dented, or tarnished items from the pool.
Lastly, a good depository takes physical security very seriously.
Money Metals Depository is an excellent choice when it comes to all of the above criteria.
We built a custom, state-of-the-art Class III vault located directly below a County Sheriff’s department. Our facility in Idaho is located far away from the COMEX system, Wall Street bankers, and Washington DC politicians.
Fully segregated storage is the only type we offer. And our IRA storage fees are the lowest in the industry.
If you store your IRA metals with Money Metals Depository, you can take advantage of zero shipping costs and instant delivery from Money Metals Exchange. For best value and service, we suggest New Direction IRA, Advanta IRA, or Mountain West in Idaho.
If you need a specific recommendation based on your circumstances, please give one of our no pressure and non-commissioned Specialists a call at 1-800-800-1865.
To get started now with a precious metals IRA, just click here.