An IRA, or Individual Retirement Account, may be your best option for saving for retirement. This particular form of savings account offers substantial tax breaks as a way of encouraging you to save for your retirement. Unlike 401(k) accounts, which are typically provided by an employer, IRA accounts are usually opened by an individual. Any major financial institution can assist you in opening an IRA, including banks, brokerages, and mutual fund companies, though fees may vary from one company to another. Most people choose between a traditional and a Roth IRA, which differ primarily in the timing of when you pay taxes on your savings amount.
When you invest in a traditional IRA, you do not pay taxes on your savings until you withdraw the money. Because all of your investments are pretax, you may be able to deduct your contributions from your current year income, meaning you will pay less in taxes now. Deferring your taxes will allow your traditional IRA account balance to compound and grow much quicker than nearly any other form of savings account, but strict penalties apply if you choose to withdraw any money before reaching retirement age. Learning how to open an IRA in this format might be beneficial to you if you expect your tax rate to be lower when you retire than your current levels.
Your contribution to Roth IRAs are taxed before the money enters your retirement account, and any investments are not tax deductible. While this may mean a higher tax bill now, it also means that you withdraw from your Roth IRA can be done so tax free, and can be done at any time. Roth IRAs also allow you to access your savings at any point with far fewer penalties, while traditional IRAs will deduct a portion of your withdrawal if taken out before retirement age.
There are also more restrictions opening an IRA in this way. Your income must fall under a certain level, which varies depending on whether you file your taxes as single, head of household or married. A Roth IRA might be your best choice if you expect your retirement tax rate to be greater than the rate at which you are currently taxed.
How to Open a Gold IRA
Both traditional and Roth IRAs can incorporate gold into their investment strategies. By working will a well-established gold brokerage, you can open up a new IRA account or rollover an already established account. While both Roth and traditional IRAs are eligible, it is important to note that these accounts may only be rolled over, or transferred, from one custodian to another once a year.
While Gold IRA accounts have been available for many years, the complexity and regulations surrounding the maintenance, as well as the steep learning curve that goes with mastering how to open a Gold IRA have historically intimated many investors, preventing the majority from taking advantage of this truly unique income generating strategy.
A gold IRA requires the purchase, storage and maintenance of gold, silver, platinum or palladium bullion and may also include precious metal coins such as American Eagle and Canadian Maple Leaf coins. You must store your precious metals in an IRS approved depository and must be held by an IRA trustee. Because these physical components must be maintained and accounted for, there is also a significant amount of ongoing paperwork which may go along with learning how to open a gold IRA.
Because of increased interest in, and skyrocketing value of gold, many highly rated brokerages such as Regal Assets have begun dealing exclusively with gold investment strategies. While in the past it would have been up to you to locate, hand pick and coordinate a gold retailer, approved gold IRA account custodian and IRS approved storage facility, top rated brokerages will now do all of this for you.
Why Invest in Gold?
Gold continues to grow in popularity as an investment choice. Historically, the value of hard asset commodities such as gold climb in value during times of recession when the values of bonds and stocks decline. This means that if one portion of your investment drops in value, another component is almost guaranteed to be rising. Learning how to open a gold IRA is a particularly useful way to diversify your investment against market volatility.
A $33,000 investment in gold in 2001 would now be worth nearly $130,000. The price of gold has shown a pattern of steady increase over the last two decades to near record levels and is very likely to keep rising. Including gold ownership as a part of your financial plan for retirement not only increases the safety of your investment, but could significantly increase the overall value of your IRA.
Finding the Right Gold IRA Brokerage
Well established precious metals brokerages are highly specialized and well connected. They will have the resources to source from only the most reliable vendors and possess a deep understanding of the legal intricacies which go along with precious metal ownership. By utilizing a brokerage who offers these all-encompassing services, you can avoid the steep learning curve that comes with learning how to open a gold IRA account on your own. A high quality brokerage will be able to maximize your gold and precious metals investment, earning you the largest return possible.
To truly take advantage of a gold investment strategy, it is crucial that you do your research to ensure you are working with only the top rated gold IRA brokerage firms. In addition to online reviews, look for companies with A+ scores with the Better Business Bureau. This score is not only an aggregate of customer satisfaction, but also takes information such as how long a business has been in operation, bankruptcy information, and whether there has ever been any government action taken against a specific company into consideration. The Business Consumer Alliance is another quality source of verified independent reviews. Regal Assets is a prime example of a well-established brokerage with an A+ score with the Better Business Bureau and a score of AAA with the Business Consumer Alliance.
Opening an IRA with the right brokerage can have a substantial effect on your future financial health. It is critical that you select the best qualified account custodian to safeguard your future.