All right, so let's jump into something that
I think a lot of our listeners are probably curious
about when it comes to planning for the future,
and that is precious metals IRAs. You know, we
hear about them, we know they're a thing, but
like, who are they actually for? What are the
benefits? And how do you even go about getting
started if it's something that you're interested
in? So to really dig into this topic, we are
going to be diving deep into an article from
Doug Young. He is someone who has over 20 years
of experience in financial investing, commodity
trading, and specifically, precious metals. So
we're in good hands, I think. And the article
is titled, Precious Metals IRA Eligibility. Who
Qualifies? Okay. So we'll take that as our guide
for this deep dive and see if we can't really
get to the bottom of whether this is something
that folks should be considering as part of their
long -term financial plans. Awesome. Sounds good.
So right off the bat, one of the things that
I think people are often curious about is who
can actually do this? Is this something that's
only for the super wealthy? Is it only for people
of a certain age? What are the eligibility requirements
here? Yeah. You know, and the article does a
good job of sort of outlining that. And it's
actually very inclusive. So when it comes to
age, there's really no minimum and no maximum
age limit. Oh, interesting. It's really just
about having earned income. So whether you're
18 or 80, as long as you have that earned income,
whether it's from employment or self -employment,
you're eligible to open and contribute to a precious
metals IRA. So you're saying that basically you
could be you know, fresh out of high school,
got your first job, and you could start looking
into this as an option. Absolutely. Or you could
be, you know, well into retirement and still
be able to contribute. Yeah. The article even
uses the example whether you're just starting
your career or nearing retirement. Wow. Okay.
As long as you've got that earned income. Okay.
So that's pretty broad in terms of age. What
about income level? That's interesting too, because
there's actually no maximum income limit. Oh,
OK. So there is a limit in terms of how much
you can contribute annually, but there's no limit
on your income level to be able to contribute.
So even if you're making a significant amount
of money, this is still an avenue that's open
to you. Exactly. And the article actually even
highlights that this can be particularly beneficial
for high income earners who want to diversify
their portfolios, which I think is a really important
point. Yeah. Interesting. Okay. So we've got
that kind of broad overview of eligibility in
terms of like age and income level. Maybe just
to give people a little bit of context, like
in terms of how much we're talking about, could
you maybe just touch on the contribution limits
just so people have a sense of that? Right. So
for 2025, if you're under 50, the annual contribution
limit is $7 ,000. Okay. And if you're 50 or older,
it bumps up to $8 ,000. All right. So we got
age, we got income, we got contribution limits.
I think we've got a pretty good handle on who
can actually participate. Now, the next question
becomes, well, what can they actually put into
these accounts? What are the eligible precious
metals that we're talking about here? Right.
Yeah. And it's not just any old gold bar or silver
coin you can put in there. The IRS has pretty
specific guidelines for the types of precious
metals that are allowed in these retirement accounts
just to ensure the quality of the investment.
Right. Makes sense. So starting with the most
popular one, gold. the minimum purity requirement
is 99 .5%. Okay, so pretty pure. Yeah, it's pretty
pure. Are there any specific examples that the
article gives us of what kind of gold products
would qualify? Yeah, so they mention things like
American Gold Eagle coins, Canadian gold maple
leaf coins, Austrian gold philharmonic coins,
and then also gold bars and rounds from refineries
that are approved by... you know, major exchanges
like NYMAX or COMEX. So those are the big like
commodity exchanges. Exactly. So it's got to
be, you know, investment grade bullion. We're
not talking about, you know, decorative pieces
or jewelry or anything like that. So real deal
stuff. Yeah, real deal bullion. OK, cool. What
about silver? Is it similar? Yeah, silver is
similar. The purity requirements actually even
stricter. It's ninety nine point nine percent.
Oh, wow. Even higher. Yeah. And again, you've
got some similar examples like the American silver
eagle coins, Canadian silver maple leaf coins,
Austrian silver philharmonic coins, and then
those silver bars and rounds from approved refiners.
OK, so basically the same concept, just different
purity levels. Exactly. Now, I know gold and
silver are kind of the big ones that people think
about when it comes to precious metals. Are there
any others that are eligible for these IRAs?
Yeah, you know, the article mentions a couple
more in the FAQ section. Okay. So platinum and
palladium are also eligible and those both have
a minimum purity requirement of 99 .95%. Okay.
So you got a little quartet of precious metals
to work with there. Exactly. Okay. So we know
who can invest. We know what they can invest
in. We have the big question. Why? You know,
what are the actual benefits here that might
lead someone to say, okay, this is something
I want to consider. Yeah. So the article highlights
a couple of key advantages and one that really
stands out is that precious metals can provide
stability especially during times of like Economic
uncertainty, you know when traditional investments
like stocks, you know take a downturn Yeah, precious
metals often tend to hold their value or even
increase in value kind of like a safe haven,
you know, yeah Exactly. The article even points
to the 2008 financial crisis as an example, where
gold actually saw significant price increases
while a lot of other assets were plummeting.
Oh, wow. OK, so it can kind of act as like a
counterbalance or almost like an insurance policy,
I guess. Yeah, exactly. Interesting. OK, so stability
is a big one. What else? Well, another benefit
that's often cited is that precious metals, particularly
gold, can act as a hedge against inflation. Okay,
yeah. Inflation's been a big topic of conversation
lately, so that makes sense that that would be
a factor here. Can you explain a little bit more
about how that works? Sure. So, you know, historically,
precious metals and especially gold have been
seen as a way to kind of protect your wealth
against the declining purchasing power of, you
know, paper money due to inflation. The idea
is that as, you know, the value of currency Decreases
over time the intrinsic value of precious metals
it tends to rise So it can help just you know
preserve the long -term value of your savings
So you're not losing out as much to that inflation
as you might with say, you know just holding
cash or something like that exactly the Article
puts it this way. Gold traditionally appreciates
in value over time, whereas the value of paper
money declines due to inflation. Right. OK. Yeah,
that makes sense. Now, another thing that we
hear all the time when it comes to investing
is the importance of diversification. So how
does adding precious metals into the mix play
into that, you know, that idea of diversifying
your portfolio? Yeah. So diversification is basically
just, you know, not putting all your eggs in
one basket. Right. Don't put everything in one
stock or one whatever. Right. Yeah. By including
precious metals in your retirement portfolio,
you're not just relying on the performance of
stocks and bonds. And that can help to kind of
smooth out the overall returns of your portfolio,
reduce the impact of those market swings. The
article highlights that this balanced approach
can help ensure more stable growth over the long
term. Okay, so it's kind of like, you know, you're
spreading out the risk a little bit. Exactly.
Having things that, you know, might perform differently
under different economic conditions. Right, exactly.
Okay, so we've talked about some of the advantages,
the benefits of potentially investing in a precious
metals IRA. If someone's listening and they're
thinking, okay, this is intriguing, I'm interested,
I want to explore this further, like, what are
the steps involved in actually opening one of
these accounts? Sure. So the process involves
a couple of key players and steps. OK. So the
first thing you'll need to do is select a gold
IRA company. OK. And this is essentially the
company that will guide you through the process
and help you with the logistics of setting up
and managing the account. Gotcha. You also need
to choose a custodian. OK. And this is a financial
institution that's responsible for actually holding
the assets in your IRA. So they're kind of the
safe keeper, if you will. It's not like the gold
bars are going to be delivered to your house
or anything. No, no. They're going to be held
somewhere safe and secure. Yeah, exactly. And
the good news is that gold IRA companies often
have, you know, established relationships with
custodians so they can typically recommend one
to you. So it's kind of like a one stop shop
almost. Yeah, it streamlines the process. OK.
So we choose a company, we choose a custodian.
What happens next? Right. So once you have those
pieces in place, you'll need to fund your account.
And there are a few different ways you can do
that. You can make direct cash contributions,
which is probably the most straightforward way.
And of course, those would be subject to the
annual contribution limits that we talked about
earlier. Right. You can also do something called
a rollover, where you transfer funds from an
existing retirement account, like a 401k or a
traditional IRA. into your precious metals IRA.
OK. So you can kind of shift money around. Exactly.
And then you can also do what's called a direct
transfer between IRAs. And this is basically
moving funds from one IRA to another without
actually taking possession of the money. OK.
So a little bit less paperwork, less hassle.
Yeah. Yeah. And it's a tax advantage way to do
it as well. OK. So we've chosen our players.
We funded the account. What's the next step?
Well. Then comes the fun part. You actually get
to choose the precious metals that you want to
include in your IRA. So you'll work closely with
your gold IRA company to select and purchase
the IRS approved metals. And they can provide
guidance and make sure that you're choosing eligible
products that meet those purity standards that
we talked about earlier. Right. Make sure you're
not getting ripped off or anything like that.
Exactly. OK. So that sounds pretty straightforward.
Now, the other thing that, you know, always comes
up with retirement accounts is the tax implications.
Right. So what are we looking at here in terms
of the tax benefits associated with a precious
metals IRA? So from what we see in the article,
precious metals IRAs offer similar tax advantages
to traditional and Roth IRAs. OK. Generally,
you've got two main options. OK. You can choose
what's typically referred to as a traditional
precious metals IRA. OK. And in this case, your
contributions may be tax deductible in the year
that you make them. And your investments would
grow tax -deferred, meaning you wouldn't have
to pay taxes on the gains until you actually
take distributions in retirement. OK. So you
kind of kick the can down the road a little bit.
Exactly. Pay the taxes later. OK. What's the
other option? The other option is more of a Roth
IRA structure. And the article mentions the concept
of tax -free growth. So, in that case, you'd
be paying taxes and your contributions upfront,
but then qualified withdrawals and retirement,
including any gains, would be tax free. Okay.
So, pay now, enjoy it later. Exactly. Okay. So,
two different options, kind of depending on your
tax situation and your preferences. Right. Yeah.
It's definitely something to consider and consult
with a tax professional on to make sure you're
making the right choice. Right. For sure. Now,
the article also has a little FAQ section at
the end. And I always think those are helpful,
just to kind of reiterate some of those key points.
Absolutely. Yeah. So anything stand out to you
from the FAQ that we haven't already kind of
touched on? Yeah. It just reinforces a couple
of things, just to make sure it's clear. It reiterates
the specific types of precious metals that are
eligible and those purity requirements. So just
as a reminder, gold. 99 .5 % purity, silver at
99 .9 % and then both platinum and palladium
requiring a minimum of 99 .95 % purity. So they're
really making sure that it's the real deal. Exactly.
Investment grade. Okay. And then it also confirms
that you can transfer funds from your existing
IRAs into a precious metals IRA. Okay. Either
through a direct transfer or by rolling over
funds from another retirement account like a
401k. So if you've already got some retirement
savings, you can kind of, you know, shift things
around, diversify a little bit. Exactly. Yeah.
Gives you some flexibility. OK, so let's kind
of bring it all together. What have we learned?
It seems like eligibility for a precious metals
IRA is pretty broad. You know, basically, if
you have earned income, you're probably eligible.
You can hold very specific forms of gold, silver,
platinum, and palladium within the account. We
talked about the benefits, you know, that potential
for stability during those. rocky economic times,
hedging against inflation. And then, you know,
that diversification factor, which is always
a good thing to have in your portfolio. We talked
about the steps involved. Choosing that company,
choosing the custodian, funding the account,
picking out your medals. And then finally, you
know, the tax advantages that are similar to
those traditional and Roth IRAs. Yeah, you've
covered all the bases. All right, good. So, you
know, as you're listening to this and you're
thinking about, you know, your long term financial
strategy. Here's a question I want you to ponder.
OK. We're living in a world where there is a
lot of potential for economic volatility. We've
got inflation to think about. How might incorporating
some tangible assets like precious metals into
your retirement plan provide that extra layer
of security and diversification that you might
not get with just the typical stocks and bonds?
Is this an avenue that's worth exploring further?
Yeah. Definitely something to think about. All
right. Well, thanks for taking this deep dive
with us. We hope you found it informative and
We'll see you next time. Sounds good