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Why Own Gold, Silver, Platinum or Palladium in an IRA?

May 29, 2012

Only an IRA administrator would likely be aware that the ability of a private US citizen to own gold was returned on January 1, 1975. It shares a birthday with the first Individual Retirement Arrangement (IRA) – offering a tax-advantaged savings plan for retirees. The fact that those opportunities can be coalesced into purchasing precious metals for a retirement plan is finally taking root.

Interestingly, as a self-directed IRA administrator in Orlando, we do not and cannot give our thousands of IRA clients any advice regarding their investment choices. A self-directed account by its very nature is not influenced by the record-keeper, custodian or administrator of their account.

So, why are clients self-directing their IRA funds into Gold and other precious? Most cite the uncertainty of traditional investments and the desire to hold something tangible and not tied to a particular currency. While speculators often purchase the physical metals directly, many IRA holders that are trading in and out of their investments prefer mining stock as a surrogate. The majority of IRA custodians are unable or unwilling to hold title to the actual physical metals, although not constrained by the IRS.

For those that prefer the certainty that the IRA sanctioned precious metals provide (non-collectable Gold, Silver, Platinum and Palladium), additional due diligence is prudent to ensure that all the aspects of the investment process is followed.

Integrity: Buy and sell with a dealer with a sterling reputation. Calculate that costs are in line with the value desired, and that the dealer will be willing to sell to an IRA. This will require that based on a purchase request, the dealer will strike and hold a price for up to a three day receipt of funds.

Responsiveness: Deal with an IRA administrator in Orlando that can move quickly and effortlessly through the application and IRA funding process. Most importantly, the time to execute the purchase is critical – so ensure that you have a designated employee’s name and relationship established with your IRA administrator that will take responsibility on meeting your time constraints.

Fidelity of Storage: With an IRA, the holder must designate an authorized storage facility to house the precious metals. Ensure that your IRA administrator will provide multiple depositories from which you can choose, including both in the US as well as Canada. After all, once the purchase transaction is complete, the entire purpose of holding metals for security is diminished should your metals be incorrectly administered at the storage facility.

Whether for a long term investment, or for those seeking quicker gains, IRA clients have shown a historically unparalleled appetite for precious metals. The genie is out of the bottle, and will likely now be a constant in many self-directed retirement accounts.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando. He can be contacted at 407-367-3472 or gmather@nuviewira.com