Precious metals have always captivated us and flipped that shiny dopamine switch in our brains whenever we look at them. It’s no wonder people are fascinated by them and want to invest in them.
Whether investing, speculating, buying, or collecting, you can benefit from an IRA-approved precious metal. Gold, Silver, Platinum, and Palladium are the only four precious metals approved for an individual retirement account (IRA).
People invest in them to counter inflation and diversify their investment portfolio. Just why are these precious metals the only ones IRA approved?
And why are more people investing in them now more than ever? Read on to find out what is crucial to know about IRA approved metals.
Precious Metals, IRA, & Investments
People invest in each precious metal for their IRAs through a different approval process to be considered suitable retirement investments.
Returns are not guaranteed, just like any retirement investment; however, previous metal IRAs have a vital role in allowing investment portfolios to have a diverse mixture of low-stock and high-stock assets and maintain purchasing power over inflation.
Gold
Gold has been available for IRA investments since 1997, which first allowed people to invest in gold coins. Later in 1998, IRAs were able to invest in gold bullion also.
The American Internal Revenue Service (IRS) has to approve the types of gold allowed to be invested by IRAs. This gold must be in the form of collectible coins or gold bullion with a gold purity of 99.5%
Gold coins are generally more popular than gold bullion because they are collectible items. Gold coins are harder to counterfeit and can be traded at a lower price.
Silver
IRA silver has been available for the same amount of time as gold has. First available in 1997 as coins and then in 1998 as bullion. Investment silver must be 99.9% pure.
Silver is also similar to gold as it is seen as a hedge against stock market downturns and rising inflation.
Silver isn’t as popular as gold because it has a mixed history of success, as, during the 2007-2009 recession, its price fell significantly and scared away potential investors.
Platinum
Platinum has been one of the IRA approved metals since 1998 and is available for investment in the form of coins and bullion. Popular forms are in the platinum American Eagle coins and the Platinum Canadian Maple Leaf coins.
Great Britain and Australia also produce platinum coins but are not as famous for investment due to the distance of these countries from the United States.
Palladium
Palladium was also introduced as one of the IRA approved metals in 1998, with coins and bullion being the types allowed by the IRS.
Like platinum, palladium must be 99.95% pure to meet the IRS requirements for IRA portfolios. American Eagle also produces collectible palladium coins, but Canadian Maple Leaf coins are overall more attractive.
Conclusion
Deciding to invest in a precious metals IRA, one that has IRA approved metals, will come down to your personal situation.
Consider whether the tradeoffs of low liquidity might be a long-term buffer against inflation on your portfolio and whether your investment portfolio has room for precious metals.
You should also like what you are investing in. Don’t just follow the crowd; make sure your investments will give you both satisfaction and long-term rewards.
FAQs
What gold qualifies for IRA?
Any gold used in an IRA must be 99.5% pure. This gold must be in the form of a collectible coin or gold bullion.
Can an IRA invest in precious metals?
Unfortunately, a regular IRA account cannot invest in precious metals; however, special precious metal IRAs will allow you to invest in precious metals.
Can you have physical gold in an IRA?
Yes, as long as you have a self-directed IRA, you can own and invest in physical gold.