OK, so you're thinking about how to protect those
retirement dollars. Yeah. And you're looking
for ways to kind of make sure that your future
is a little bit more secure. Right. So today
we are diving into a topic that we get asked
about all the time, and it's gold IRAs. Yeah.
We've got a great guide here that we are going
to be referencing. And it's from start gold IRA.
It's by this guy Doug Young. And basically it
lays out everything you need to know. It really
does kind of cover the whole landscape of gold
IRAs, you know, from setting one up to the types,
you know, all the different flavors of gold IRAs
and considerations. Yeah, there are a lot of
things to consider. And that's what we want to
do today is just kind of make this a little bit
less mysterious so that you listening can really
wrap your head around what exactly a gold IRA
is, how you actually go about setting one up.
the potential benefits, but also the things you
need to be wary of so that at the end of this
deep dive, you can feel empowered to make smart
decisions about your financial future. Yeah.
And just for context on the source, Doug Young
has over 20 years of experience in financial
investing and precious metals and the website
Start Gold IRA. It's really dedicated to providing
news and insights and even comparisons of. different
gold IRA companies. So I think the idea is that
he has a lot of perspective in this area. Yeah.
So it's a great resource for anyone who's even
thinking about possibly dipping their toes into
these waters, right? Yeah. OK. So let's start
by really breaking down the basics. What is a
gold IRA? It sounds kind of obvious, right? An
IRA with gold. But I'm guessing there's more
to it than that. Yeah, there is a little more
to it than that. At its most basic, it is an
individual retirement account, just like a traditional
or Roth IRA that a lot of folks out there listening
probably have. The difference is, instead of
holding paper assets like stocks or bonds, this
one holds physical precious metals. So we're
talking gold, obviously. I love the gold part.
But also silver, platinum, and palladium. So,
you know, I think the thing to keep in mind is
that this isn't just about collecting shiny coins.
It's really about a potential way of adding a
layer of security to your financial future. OK,
so let's talk about the security, because I think
that's a really important point. Why would someone
want to hold physical gold instead of, let's
say, a really well -balanced mutual fund? Well,
I think gold has this long, long history as a
store of value. For thousands of years, people
have considered it to be a valuable asset and
something that holds its worth, it's often considered
a shield against inflation and economic uncertainty.
It's almost like that time -tested thing. Yeah,
exactly. Because when the money in your pocket,
what I'll call fiat currencies, the stuff we
use every day, when those start to lose their
buying power or if the stock market gets really
rocky, gold can actually often hold its value.
or even increase in value. So you know that means
it has the potential to add this layer of stability
to your overall investment mix. So for instance,
during high inflation periods in the past, gold
has sometimes increased in value while other
assets have gone down. So it's this idea that
it's a hedge. It's kind of doing its own thing
almost. Yeah, exactly. Independent of the rest
of the economy. Yeah. OK, so those are some interesting
points. What are some other advantages? What
are those aha moments that would really make
someone seriously consider a gold IRA? Well,
the guide lays out a few really key advantages.
The first one is diversification. Okay. So the
idea here is that, you know, most financial advisors,
they preach the importance of diversification.
Absolutely. Don't put all your eggs in one basket.
Don't put all your eggs in one basket. Exactly.
And so holding physical assets, like these precious
metals, could be a way to spread your risk. Because
as we were just talking about, gold often doesn't
move in the same way as stocks and bonds. So
it has this potential to act as a buffer in your
portfolio. So if, let's say, your stock holdings
take a downturn, gold might stay steady or even
go up. It's almost like an insurance policy.
Yeah, it's an insurance policy for your portfolio,
exactly. Interesting. The second key advantage,
and this is a big one, is that gold is often
seen as a hedge against inflation. OK. So we've
all seen prices go up and up over the last couple
of years. We're sure. And, you know, as things
get more expensive and the dollar buys less,
that's what inflation is. Historically, gold
has tended to rise in value during those periods
of inflation. So it can potentially help you
maintain the real value of your retirement savings.
So you can still buy roughly the same amount
of stuff in the future even. if prices keep going
up. Yeah, so that purchasing power, very interesting.
OK, what about the tax benefits? That's one of
the big things that people always talk about
with a retirement account. Yeah, absolutely.
And just like traditional and Roth IRAs, gold
IRAs come with tax advantages. With a traditional
gold IRA, the money that you contribute might
be tax deductible. It grows tax deferred, meaning
you don't pay taxes on those gains until retirement,
and then you only pay taxes when you withdraw
the money. So this could be appealing if you
think you'll be in a lower tax bracket in retirement
than you are now. Gotcha. What about the Roth
version of a gold IRA? The Roth Gold IRA is basically
the opposite. You pay taxes on the money you
contribute now, so there's no immediate tax break.
But the advantage is that the investments grow
tax free. And when you withdraw them in retirement,
you don't have to pay taxes on those either.
OK. So this can be a good choice if you think
you'll be in a higher tax bracket when you retire.
Gotcha. OK, so the guide also mentions a SEP
Gold IRA. What's that? The SEP stands for Simplified
Employee Pension. And it's basically designed
for self -employed folks or small business owners.
So if you're listening and you fall into that
category. The advantage of a SEP Gold IRA is
it allows for much higher contribution limits
than traditional or Roth IRAs. For example, the
guide mentions John, who is a consultant. And
he could potentially invest a much larger portion
of his earnings into gold using a SEP Gold IRA
and benefit from the tax -deferred growth and
diversification. Gotcha. So it really depends
on whether you're employed or self -employed
and what your tax situation is. Yeah. And what
you anticipate that tax situation being like
in retirement, too. Exactly. And that's a good
point. The guide says you should carefully weigh
the pros and cons of each type based on your
own financial goals and your tax picture. And
they even recommend talking to a financial advisor
to figure out what makes the most sense for you.
OK. So let's say someone decides that a gold
IRA might be right for them. How do they go about
setting one up? Is it as simple as just like
opening an investment account online? Well, it's
a little bit more involved, but the guide lays
out a really clear process. So the first thing,
as we just discussed, you have to decide what
type of gold IRA is right for you. Traditional,
Roth, or Seppi. And then step two is to select
a trustworthy gold IRA company. OK, and that
sounds pretty important. Why is choosing the
right company so crucial? Yeah, it's super important
because they're going to be your partner in this
whole process. They help you set up the account,
they manage the transfer or rollover of funds
from your existing retirement accounts, and they're
the ones that you'll be buying the physical precious
metals from. So they are your main point of contact,
and they work with the custodian on your behalf.
Okay. So, you know, it's important to have a
good relationship with them. Absolutely. Yeah.
So how do you go about finding a reputable company?
There's got to be tons of them out there. Yeah,
there are a lot. The guide has some good advice
on this. The first is to research the company's
history. How long have they been in business?
You want to look for well -established companies,
ones that have a really solid track record. And
then there are tons of online reviews. So you
can check out sites like the Better Business
Bureau. BBB. Yeah, the BBB. the Business Consumer
Alliance, the BCA, and TrustLink. You can get
an idea of the company's reputation and how satisfied
their customers have been. And then, you know,
word of mouth is always good. Talk to your friends,
family, colleagues, if anyone has invested in
precious metals. See if they have any recommendations.
Yeah. Personal recommendations are always the
best, right? They are. And then when you are
looking at companies, you also want to consider
the costs involved because it's not free to have
a gold IRA. Right. I imagine there's more fees
than your typical IRA. Yeah, and they'll charge
what's called a premium over the spot price of
the precious metals. And the guide really stresses
the importance of getting a detailed breakdown
of all the costs involved. So premiums, fees
for shipping, insurance. You want to make sure
that you're not hit with any hidden fees later
down the line. Yeah, you want to know what you're
getting into up front. Exactly. And then you
also want to ask about their buyback policy.
Go ahead. So a strong buyback policy means that
when you're ready to sell, the company will buy
your metals back from you at a fair price. And
that basically gives you more liquidity. That
makes sense. And the guide also provides a few
suggestions. Augusta, Precious Metals, GoldCo,
and American Heart for Gold. It even highlights
that Augusta has zero BBB and BCA complaints
ever. Yeah, that's a big deal, and I think that's
something that speaks to the importance of doing
your research. You know, the guide can make recommendations,
but ultimately you're the one making the decisions.
For sure. Okay, so step three is choosing a custodian.
What does a custodian do, and are they separate
from the gold IRA company? Yeah, the custodian
is a completely separate entity and their job
is to handle all the administrative and regulatory
stuff for your IRA. Okay. So they make sure everything
complies with IRS rules and that includes managing
the storage of your precious metals. They're
also responsible for all the paperwork and reporting
to the IRS. So I can't just store the gold like
in a safe in my house or in a safe deposit box
or something? Oh, that's a big no -no. OK. The
guide's really clear on that. Storing the metals
yourself breaks IRS regulations. And they're
probably not too happy about that, right? They're
not happy about that, no. OK. And you know, you
could face penalties and taxes. The IRS requires
the precious metals in a gold IRA to be held
in an approved and secure depository. OK. And
the custodian handles that for you. So in terms
of choosing a custodian, does the gold IRA company
typically help with that? Yeah, usually they
have relationships with custodians who specialize
in gold IRAs, and they will recommend one. You
don't have to go with their pick, but it often
makes sense because the company and the custodian
work together pretty closely to manage your account.
OK, so step four is funding the account. What
are the different ways that you can get money
into a gold IRA? The most common ways are either
new contributions, you know, you could contribute
money directly to it, or you can transfer or
rollover funds from existing retirement accounts,
so like a 401k or traditional IRA. Okay. And
the guide talks about the difference between
a direct transfer and an indirect rollover. Okay.
So a direct transfer is the simplest. The funds
move directly from your old account to your new
gold IRA. You never touch the money. So there's
minimal paperwork and no immediate tax implications.
Gotcha. And the indirect rollover. So the indirect
rollover is when they send you the money from
your retirement account, and then you have to
deposit those funds into the gold IRA within
60 days. OK. And if you miss that 60 -day deadline,
the IRS considers it a distribution. Ah. And
you could face taxes and penalties. OK. Yeah.
So the guide recommends sticking with the direct
transfer whenever possible. That makes sense.
Keep it simple. Keep it simple. Yeah. But in
either case, you'll need to contact the company
that holds your existing retirement account.
And the Gold IRA company will usually help you
with the forms and paperwork to make that happen.
OK. So step five is actually choosing and purchasing
the metals. What kinds of metals are eligible
for a Gold IRA? So the IRS has very specific
rules about the types and the purity of the metals
that can be held in a gold IRA. And that includes
gold, silver, platinum, and palladium. Gotcha.
So those are the main four. Those are the four.
And your gold IRA company will provide you with
a list of metals that meet the IRS's standards.
And gold, for example, typically has to be at
least 99 .5 % pure. Wow. OK. And they'll help
you select and purchase these approved metals
so you don't have to go out and find them yourself.
That's good. Step six is storing the metals and
we've already touched on this a little bit, but
it's worth reiterating You have to store them
in an approved depository. You cannot keep them
at home. Absolutely not No shoebox is full of
gold. That's not gonna fly. It's not gonna fly
The IRS is going to come knocking. They're going
to be unhappy with you. So they have to be stored
in an IRS approved depository. And these are
specialized facilities that offer really high
levels of security. They're insured, so you don't
have to worry about anything happening to them.
And they make sure that everything's in compliance
with IRS regulations. So your custodian will
actually give you a list of approved depositories
and handle all the arrangements for you. And
it's worth noting there are different types of
storage options within these deposits. you might
want to ask about those as well. Gotcha. OK,
so it's a process. There's a few steps involved.
Yeah. But it sounds like with a good company
and custodian by your side, it's manageable.
Yeah. So let's talk about some of the things
that people should be wary of, right? We've been
talking about the good stuff. But what are the
potential risks and considerations before jumping
into a gold IRA? Yeah, it's important to have
a balanced perspective, right? Gold can be valuable,
but like any investment, its price can fluctuate.
And there's no guarantee that it will go up in
value. You know, sometimes it goes down. And
the other thing to consider is that gold IRAs
typically have higher fees than traditional IRAs
because of the storage costs, the insurance,
and the custodian fees. So the guide, again,
really stresses doing your homework, doing your
research, talking to a financial advisor to make
sure that it fits your goals. Yeah, and I imagine
compliance with all the IRS rules is extremely
important, right? Yeah. If you want those tax
advantages, you gotta play by the rules. You
gotta play by the rules, absolutely. The guide
can't stress that enough. Right. You have to
follow all the IRS rules, the storage requirements,
making sure the metals are the right purity,
all of that stuff. Because if you don't, you
could lose those tax advantages. Yeah. That would
be a shame after going through all this trouble.
Exactly. OK. So what are some best practices
for managing a gold IRA once you have it set
up? It's not something you just put money into
and forget about. Right. Right. You can't just
ignore it. So the guide offers some really practical
tips. One of them is to diversify your metals
portfolio. So don't just focus solely on gold.
Think about adding silver, platinum, and palladium.
Each of those has its own market dynamics and
could potentially help your portfolio. For example,
silver has a lot of industrial uses. So spreading
your investment across different metals might
lead to greater stability and growth. That makes
sense. And what else should people be doing?
Regularly monitoring your investments is important.
keep an eye on how those metals are performing.
Stay up to date on market trends that could influence
their value. And the guide suggests having regular
check -ins with your gold IRA company to talk
about your strategy and your goals. It's kind
of like any investment, right? You want to pay
attention. Exactly. And you're not in this alone.
Your gold IRA company can help you with all of
this. Great. And then the final tip is rebalancing
your portfolio. So over time, the value of the
different metals will change, and that can affect
your asset allocation. So you might wanna sell
a little bit of something that's gone up in value
to buy more of something that hasn't. Gotcha,
so that you stay balanced. Exactly, so that you
maintain that balance and keep your portfolio
aligned with your long -term financial plan.
Gotcha. Okay, and the guide also includes some
frequently asked questions. What are some of
the questions that stood out to you? Yeah, one
of the common ones is the minimum investment
required. Okay. And that varies a lot by company.
Some companies might have minimums as low as
$5 ,000 or $10 ,000. Others might have minimums
of $50 ,000 or even $100 ,000. Wow, OK. So you
have to shop around. And then another question
that comes up all the time is about home storage,
which, again, absolutely not. Don't do it. It's
against the rules. The IRS will not be pleased
with you. Right. There's a disclosure at the
end of the guide mentioning that they may receive
compensation for recommending certain precious
metals companies and that the content may not
be neutral. Right. Well, you know, it's always
smart to consider the source of your financial
information and do your own research. Absolutely.
Gonna be an informed consumer. Exactly. OK, so
let's recap our deep dive into gold IRAs. It's
a retirement account that holds physical precious
metals. Gold, silver, platinum. and palladium.
Right. They can offer some advantages like diversification.
Right. It can help you hedge against inflation.
And there are tax advantages similar to traditional
and Roth IRAs. Right. To set one up, you need
to choose a gold IRA company, you need a custodian,
you fund your account, you select the metals
you want, you purchase them, and you store them
in an approved depository. And it's important
to be aware of those risks, that the fees might
be a little higher than a traditional IRA, and
that you have to follow the rules, especially
about storage. Yeah, and you want to make sure
that you're managing it, so you're diversifying
your metals, you're keeping track of your investments,
and you're rebalancing that portfolio over time.
Right. So as a final thought, I'll leave you
with this. Considering how gold has historically
performed during times of economic uncertainty,
how could strategically incorporating some precious
metals into your retirement plan impact the overall
resilience and security of your financial future?
Certainly something to think about. It is. So
thanks for joining us for this deep dive on gold
IRAs, and we'll see you next time. Thanks, everyone.