Please note that we are not tax experts, and all information below is for informational purposes only. Do not rely on our information when making your investments.
Another way some people from the United States choose to invest in gold and silver is by making use of an IRA, or Individual Retirement Account. IRAs are more attractive to some people because they offer you the ability to make deductions from your income taxes at the same time that you make precious metals investments.
To invest in silver for an Individual Retirement Account, visit JMBullion.com who is a low-cost facilitator of IRA contributions.
Depending on what type of IRA you have (types vary by age and tax status) you are only able to add a certain amount of money to your IRA annually. In the following few sections you will have most of the finer details of IRAs explained so that you can much more easily understand how to take advantage of this program.
Adding and Withdrawing of Funds
Like we alluded to in the previous section, the amount of money you are able to invest through an IRA is capped annually depending on the tax bracket which you fall into – you can learn more about IRA contribution limits here. With that being said, all additions to your IRA are able to be deducted from your annual income taxes. For example, if you are in the 15% tax bracket and you deposit $3,000 into your IRA, you will be able to save $450 on your annual income taxes.
After you have deposited money into your IRA, you are then able to buy and trade silver bars as freely as you want. The only other time where you have to worry about taxes is when you want to withdraw money from your IRA balance. Once you do withdraw, the money you receive will be added to your regular income taxes.
Silver IRAs
Something that is important to know about IRAs is that there are different requirements and restrictions for different types of IRAs. When you choose to partake in a silver IRA you are only able to buy certain types of silver, a fact that is convenient for some and frustrating for others.
When it comes to silver bars, the types you are allowed to purchase for investment are ones that stem from silver producers that are certified by NYMEX and COMEX such as Engelhard, Johnson Matthey, or PAMP Suisse.
Starting a Precious Metals IRA
Now that you know a little bit more about precious metals IRAs, we can now get into how you actually go about pursuing and beginning an IRA. Really, getting started with a precious metals IRA is as simple as three steps. The first step is to find what’s called a custodian who will allow precious metals as well as be able to fund your account, step two is to actually purchase your silver bars, and the final step is to find a depository to store your purchases.
Finding a Custodian
IRAs are a common investment vehicle, but precious metals IRAs are a bit more obscure as they are not sought after by everyone. Because of this you will likely need to work with a custodian that allows you to have your precious metals IRA and direct your buying and selling on your own accord. Once you do find a custodian you will then need to make some sort of financial contribution in order to fund your IRA. With that funded money it then comes time to actually make a precious metals purchase.
Buying Silver
Once your IRA has money in it, it is then time for you to find a precious metals dealer who is reputable and able to offer you silver products for a reasonable price. Two sites where you are sure to find a great deal on silver products are JMBullion.com and Silver.com (Silver.com’s retail site will be up and running in 2014). By calling the dealer personally you can make them aware that your purchase is for a precious metals IRA and in most cases you are able to negotiate a price if you are ordering in bulk.
Once you and the retailer have come to an agreement on the price of your metals, you will need to complete what’s called a Buy Direction letter. This is a letter that makes your IRA custodian aware of how much money he or she is to pay to the metals dealer. Once everything reaches your custodian you will shortly thereafter have your products shipped.
Depositories
Unlike when you purchase precious metals as an investment on your own accord, purchasing them for an IRA is a little bit different. Once your order is shipped, instead of being shipped to your residence, IRAs require that your metals be stored in a depository which is not asociated with you or the dealer whom you purchased silver from. Once you find a depository that you can trust, you must simply tell your dealer so that he or she can have the precious metals shipped to your chosen depository.
Once the metals have reached your desired depository you will then have to sit back and wait for your investment to increase in value over time.