When the pandemic hit the world in 2020, a lot of people were not prepared for it. The situation affected our social lives, the way we conducted business, our approach to healthcare, and so on. The fluctuating state of the economy of many nations prompted more persons to turn to precious metals investment as a safe haven.
Even as things are getting back to normal for most parts of the world, setting up a precious metal retirement account ensures the future safety of your portfolio. Your decision to invest in your retirement is a good choice, but the process is not just about transforming raw cash into metals.
You need to get a reputable IRA company that accepts metals and is willing to handle the entire process from setting up to shipping. You may want to read this article to learn about the process of setting up a precious metals IRA.
What’s a Precious Metal IRA Company?
It is a company that facilitates the setting up of a precious metal individual retirement account (IRA) as well as purchasing bullion. The investor is required to choose a custodian and a depository that is safe for their bullion. Most precious metal IRA companies are affiliated with different custodians and may choose a depository for investors.
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A precious metal IRA has strict rules for holding assets. Unlike the traditional IRA that holds ETFs, bonds, stocks, and other paper assets, a precious metal IRA only holds certain approved metals. Additionally, the IRS established rules and regulations to determine whether the fineness of the approved metals is investable or not.
The acceptable gold coins are the Canadian Maple Leaf and the American Gold Eagle. There are other coins and a reliable company should know what is acceptable and what isn’t.
Key Points to Consider when Choosing a Precious Metals Company
Several companies set up precious metal IRAs for investors, but they are not all the same. Therefore, before you choose which company to do business with, compare your options, and then choose one that suits your needs. The points below will guide you while comparing your options.
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Precious Metals Menu
Different companies have their unique precious metals menu. Some offer only silver and gold; others offer palladium and platinum investment options. Therefore, before you choose a company, request their prospectus so you can see the bars and coins they offer. Select one based on the pieces you want to hold in the account.
You should also consider the option of diversification. Some companies offer cryptocurrency investments, which isn’t a common option. If it’s something you might be interested in, check out this metal-res.com IRA info for more on companies that offer digital coins.
Experience in the Industry
You want to partner with a company that has been in the industry for quite some time. Generally, an expert must have spent 5 years or more in a field. Hence, finding out their years of experience will boost your confidence in the company. At least, you know they won’t pack up and leave you in the cold.
Additionally, you need to check the company’s reputation. Websites like that of the BBB (Better Business Bureau) and The CAA (Consumer Affairs Association) can help you know which companies are reliable.
Fees
An important point to bear in mind is that a precious metal IRA attracts more fees than a Roth or traditional IRA. These fees might differ from company to company. There are generally three categories of fees involved:
- Account setup – between $50 and $150, but some companies may waive it if you make a large initial deposit.
- Annual custodial or admin fees – between $50 and $150. Your account size determines the amount you would pay.
- Storage fees – the depository may charge between $50 and $300 every year, depending on the size of your bullion.
Some IRA companies won’t charge you for selling or purchasing precious metals while others add their profits to the spot price. However, if the company is buying direct, there would be no need for a middleman, which eliminates the need to hike the spot price.
Before you sign up, ensure you understand what it would cost you to set up and manage the account, including shipping and storing your bullion. Compare the information of different companies before arriving at a final decision.
Customer Support
One of the things to look out for is whether the company offers support to customers or not. You can decipher this from the first time you call the company to the point where you walk into their office. You need all the information you can get because setting up an IRA or rolling over funds from an existing one is a complex process.
You would need an expert to assist you in understanding and navigating the process step-by-step, ensuring a hassle-free transaction. The expert will also ensure that you do not pay any extra fees.
Storage
The storage options for bullion are limited if you are investing in an IRA. The IRS mandates all account owners to store their bullion in an approved facility. The IRA companies you will check out may offer you other storage options in addition to the approved depositories.
But do not just jump on anything; ensure you are comfortable with whatever option you choose. You can visit reliable sites to get tips for choosing a depository.
Conclusion
Choosing a precious metals company involves a lot of research. You do not have to choose the one that offers the cheapest fees as this decision will have serious implications in the future. The points shared above will assist you in making a wise decision.
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