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 Replies: 16 / Views: 2,938 |
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Pillar of the Community
United States
1191 Posts |
Hello. I am a fairly new member to this site. So far I have received great support from the community here (thanks!!). As I have posted before, I am new into the coin collecting market. I have interest in collecting for both the numismatic and bullion value. Recently I heard about the "precious metals IRA." Anyone have experience with these? I already have a 401K/Roth but this seems like another way to diversity my assets (and I get to buy more silver  )!! At this time I don't know that I can stomach dumping $1000+ on a single gold coin so I would likely stick to silver but I am still undecided. Anyone have any good reference information on this? How does this work? Do I just send in X amount of money each month for it or do they take it out of my pay check? Do they actually send you the coins/bars to hold or does a 3rd party keep everything? Is the only benefit to this over just outright buying them that I can defer taxes until I retire? What companies would you recommend using? Any thoughts, opinions, suggestions on the matter would be greatly appreciated! Thanks! |
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Moderator
 United States
23522 Posts |
Thoughts? My first thought is, I'm not trusting my retirement to precious metals. Silver has still not recovered (factoring inflation) its' price during the runup of the late 1970's.
The appropriate answer to "How much of my retirement portfolio should be precious metals?" is "zero."
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Valued Member
United States
61 Posts |
Run as fast as you can away from PM's in an IRA or 401K think about it, no interest no dividends to be reinvested over the years you own it, and when the time comes you have to take out a certain percent per year they will have to sell off PM to do the pay out and if it is in the tank they are forced to sell at the low end to make the pay out, plus you will be forced to pay the highest rate of income tax on a asset that other wise would be taxed at the lower capital gain rate..Just saying do as you please it's your money.
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Pillar of the Community
United States
1068 Posts |
You don't have to have or open a PM IRA to buy silver or gold... Just buy it... They are lots of places that sell silver and gold and lots of them are mentioned and recommend here...
Boliver is right that PM's do not pay a dividend or give you interest so it is only worth what the going price that day is...
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Pillar of the Community
United States
1796 Posts |
The silver and gold boom is over. It came and went just like Silver Thursday.
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Pillar of the Community
 United States
1191 Posts |
Wow great points everyone, thanks! I didn't even think about not earning any type of return on the PM and then possibly being forced to sell once I got to a certain age. I will continue to just purchase on my own. Thanks again everyone, appreciate the quick responses and insight.
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Pillar of the Community
United States
3789 Posts |
BIG WASTE OF MONEY. period.
with fees for storage, for compliance as to what can be put in it, you are wasting your money, big time.
It would be better to have an IRA and if you really cant shake off putting money into PMs, then do an IRA and stick GLD, SLV and money stocks into it... IF you must.
There will be a time when the PMs are back in favor. For now tho, there are better places to park your money and of course, again if you must you could always nibble in PMs.
But putting all your money to work in one spot wouldnt be great.
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Pillar of the Community
United States
589 Posts |
A number of nations have confiscated PM IRA's over the last decade. America may be the next nation to do so, after all, it's very lucrative. Look at what FDR did in 1933. The government sets a value for the metal, buys it from you, and then "unsets" the value of the metal, allowing them to make a fortune.
Precious metals ARE a good investment, you possess them, you can sell them if you think they've reached a peak, you can invest/reinvest in them when the price drops, you don't need to worry about the government stepping in and trying to confiscate it...you just need to protect it yourself.
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Valued Member
United States
172 Posts |
Quote:
A number of nations have confiscated PM IRA's over the last decade. I don't to get all 'academic' here, but references to back up this statement, please. |
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Valued Member
United States
167 Posts |
What do you trust in your retirement portfolio ssuperddave?
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Pillar of the Community
United States
1037 Posts |
While everyone has valid points, you do need to have more than one egg in you retirement basket. My biggest concern with PM-IRA's is that you do not have possession of the your PM's, it's all on paper/computer.
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Moderator
United States
23522 Posts |
Quote:
What do you trust in your retirement portfolio ssuperddave? Diversity uber alles, and intelligent application of available funds to goals which will be evolving as you do. Real estate will break your back as a speculative investment but it ain't a half bad place to park money for 30 years. Precious metals bother me. Too much of their demand is industrial, so much that one can assume a primary research goal is to find something which will do the job cheaper. They'll probably find that thing, and the market will crater like nothing you've ever seen when people realize there's plenty for everyone. That won't be pretty. Well-chosen rare coins will always be a nice place to park money for 30-40 years. If you're sharp enough, they can be a lot of fun as a speculation, especially if you're a good attributor.  But bulk metals? No. |
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Bedrock of the Community
United States
17884 Posts |
That can be one of the biggest dangers. You don't have the PM in hand, and you are paying them to store it, and what happens if you decide to cash it out/roll it over whatever and it isn't there? Banks do fractional reserves under the assumption that all the depositors won't ask for their cash at the same time (when they do ask you get a run on the bank and they often fold) what if the party holding the PM does the same thing? Have a thousand people each holding 1000 oz is a million oz. But they find that on average they only have to buy and sell 1000 oz a month. So they only keep 10,000 oz on hand and sell or lease out the 990 thousand oz and invest the money (while still charging storage for the PM they no longer have on hand) As long as they don't get requests for more than the have on hand they can get away with it. But let requests for more than they have on hand come in and they can fold leaving an empty vault and paper saying they own PM that no longer exists. I don't know if this has ever happened with an accredited IRA manager, but I know it has happened with other businesses that sell PM's to investors and store it for them.
First rule of buying PM, take possession.
Edited by Conder101
01/23/2015 1:54 pm
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Pillar of the Community
United States
1191 Posts |
All great feedback. I was afraid that you didn't actually get to hold the PMs with the IRA. To me that's a big deal breaker, esp coupled with the fact that you don't earn interest.
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Moderator
United States
23522 Posts |
Quote:
All great feedback. I was afraid that you didn't actually get to hold the PMs with the IRA. To me that's a big deal breaker, esp coupled with the fact that you don't earn interest.
Well, obviously you're thinking clearly about it then.  |
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Pillar of the Community
United States
2543 Posts |
When you open a PM IRA, you pick a supplier and a depository. Once the PM's are bought, they are physically stored and become part of your IRA portfolio. They belong to your IRA, not you. Any manipulation of these PMs is done by your IRA manager, at your behest, but not by you.
The depository is NOT a bank. They merely store. They do not invest, they do not hold fractional reserves. They hold they exact PMs that were delivered by your supplier in a vault that is designated for you. Unless the depository is corrupt and dishonest {that is why it is so important to pick a reputable supplier/depository), If people but 1 million ounces of PMs , they have 1 million ounces of physical PMs on site and always will. The exact PMs you originally supplied them with.
Again, the PM's do not belong to them, invested with them or manipulated by them in any way. The PMs belong to the IRA and are merely stored by the depository. Like non-dividend generating mutual fund investment. They do not generate interest or dividends, the value of the investment is totally tied in with the price movement/value of the PM.
If you invest $12,000 in a mutual fund with a 6% annual return, at the end of the year, (minus fees and commissions) you made $720. In a 2% CD you made $240, If you buy 10oz of gold at $1200/oz and it goes up to $1300/oz you have made $1000 for the year (minus fees and commissions) That is a very simplistic explanation of the process but that is the way it works.
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Replies: 16 / Views: 2,938 |
Posted 01/22/2015 8:40 pm
