WEBVTT 00:00:00.000 --> 00:00:04.120 Imagine this for a second. You've built up a 00:00:04.120 --> 00:00:07.480 nice retirement stash in precious metals. Gold, 00:00:07.500 --> 00:00:11.400 silver, maybe some platinum, palladium, all sitting 00:00:11.400 --> 00:00:15.480 safely in a precious metals IRA. Standard setup 00:00:15.480 --> 00:00:18.839 for many. Right? But then maybe retirement's 00:00:18.839 --> 00:00:21.199 getting closer and you think, you know what? 00:00:21.760 --> 00:00:24.980 I don't just want that cash equivalent. I actually 00:00:24.980 --> 00:00:27.460 want to hold those bars, those coins in my own 00:00:27.460 --> 00:00:29.980 hands. Is that even allowed? Can you do that? 00:00:30.199 --> 00:00:32.159 That's the big question, isn't it? Welcome to 00:00:32.159 --> 00:00:34.399 the deep dive. This is where we take your questions, 00:00:34.719 --> 00:00:36.600 look at the sources you send us, and really get 00:00:36.600 --> 00:00:38.979 into the nitty gritty. Yep, digging deep. Today 00:00:38.979 --> 00:00:40.700 we're looking at something pretty specific, maybe 00:00:40.700 --> 00:00:43.619 a bit overlooked, for precious metals IRAs. It's 00:00:43.619 --> 00:00:46.600 called an in -kind distribution. In -kind, meaning 00:00:46.600 --> 00:00:49.780 you get the actual kind of asset. Exactly. And 00:00:49.780 --> 00:00:52.479 we've got some solid research to guide us here. 00:00:52.560 --> 00:00:55.119 It's from Doug Young. He's an analyst, gold IRA, 00:00:55.380 --> 00:00:57.490 precious metals. Got over 20 years in financial 00:00:57.490 --> 00:00:59.990 markets. OK, good foundation then. So our mission 00:00:59.990 --> 00:01:03.030 today, let's break down what in -kind distribution 00:01:03.030 --> 00:01:05.890 really means. Why might you even think about 00:01:05.890 --> 00:01:08.450 doing it? What are the actual steps? The process, 00:01:08.530 --> 00:01:11.989 yeah. And critically, the rules, the IRS regulations 00:01:11.989 --> 00:01:15.450 you absolutely need to be aware of. Plus, we'll 00:01:15.450 --> 00:01:17.950 weigh the good against the, well, the challenges. 00:01:18.030 --> 00:01:20.510 Pros and cons, always important. So you figure 00:01:20.510 --> 00:01:23.489 out if it makes sense for your situation. OK, 00:01:23.489 --> 00:01:26.329 let's get into it. This is where it gets really 00:01:26.329 --> 00:01:29.390 interesting. It's not just about the money on 00:01:29.390 --> 00:01:31.810 paper, is it? No, it touches on something more 00:01:31.810 --> 00:01:33.849 fundamental for a lot of people. It's about control. 00:01:35.090 --> 00:01:38.049 Real physical control over those assets. I mean, 00:01:38.069 --> 00:01:40.250 you can imagine holding that, right? That piece 00:01:40.250 --> 00:01:42.930 of your retirement. Absolutely. And what's fascinating, 00:01:43.090 --> 00:01:45.650 like you said, is that an in -kind distribution 00:01:45.650 --> 00:01:48.450 lets you take delivery of the actual medals. 00:01:48.730 --> 00:01:51.310 The physical gold, the silver, whatever you hold. 00:01:51.629 --> 00:01:53.069 Instead of just getting a check after they sell 00:01:53.069 --> 00:01:55.390 it. Exactly. You're not liquidating. You're basically 00:01:55.390 --> 00:01:58.230 just transferring the ownership of the physical 00:01:58.230 --> 00:02:01.950 bars or coins from the IRA custodian directly 00:02:01.950 --> 00:02:04.450 to yourself. OK, that's a key difference. Not 00:02:04.450 --> 00:02:06.590 just physically, but how it works financially 00:02:06.590 --> 00:02:10.830 too, right? Yeah. So the first hurdle, I guess, 00:02:10.930 --> 00:02:14.110 is figuring out the value. Definitely. The IRS, 00:02:14.289 --> 00:02:17.879 they're going to tax you. and it's based on the 00:02:17.879 --> 00:02:20.439 fair market value of the metals on the exact 00:02:20.439 --> 00:02:22.960 day the distribution happens. Not what you originally 00:02:22.960 --> 00:02:25.479 paid for them years ago. It's the value on that 00:02:25.479 --> 00:02:27.979 day, which is crucial because, you know, prices 00:02:27.979 --> 00:02:31.639 fluctuate. That day's price determines how much 00:02:31.639 --> 00:02:33.860 taxable income you've just received. So you need 00:02:33.860 --> 00:02:35.620 to be watching the market right up until you 00:02:35.620 --> 00:02:38.080 do it. Pretty much. And to get that fair market 00:02:38.080 --> 00:02:39.960 value, you'd, well, you'd look at the current 00:02:39.960 --> 00:02:43.069 spot prices, obviously, but... you really need 00:02:43.069 --> 00:02:45.729 to talk to your IRA custodian. They should provide 00:02:45.729 --> 00:02:48.389 the official valuation. Yes, based on the latest 00:02:48.389 --> 00:02:51.789 data. It's always smart to get an updated appraisal 00:02:51.789 --> 00:02:54.110 very close to when you plan to take the distribution 00:02:54.110 --> 00:02:56.270 because, like we said, markets move fast. Right. 00:02:56.449 --> 00:02:59.069 And that move hits your tax bill directly. Exactly. 00:02:59.150 --> 00:03:01.889 OK, so why? Why go through this hassle instead 00:03:01.889 --> 00:03:04.680 of just taking the cash? The research points 00:03:04.680 --> 00:03:07.000 to a few things beyond just wanting to, you know, 00:03:07.139 --> 00:03:09.680 admire your gold. One big one mentioned is this 00:03:09.680 --> 00:03:14.819 thing called net unrealized appreciation. N .U 00:03:14.819 --> 00:03:18.960 .A. That sounds potentially powerful, but maybe 00:03:18.960 --> 00:03:21.419 a bit niche. It can be, yeah. N .U .A. is one 00:03:21.419 --> 00:03:24.560 of those tax code things that if your situation 00:03:24.560 --> 00:03:27.240 fits, it could potentially save you quite a bit 00:03:27.240 --> 00:03:29.639 on taxes. Not always, but potentially. How does 00:03:29.639 --> 00:03:32.270 that work, roughly? So basically, under very 00:03:32.270 --> 00:03:34.650 specific circumstances, it might let you defer 00:03:34.650 --> 00:03:36.949 paying ordinary income tax on the growth part 00:03:36.949 --> 00:03:39.250 of the asset's value until you actually sell 00:03:39.250 --> 00:03:42.430 the metal later on. So you pay tax on the original 00:03:42.430 --> 00:03:45.590 cost basis now, but the appreciation might be 00:03:45.590 --> 00:03:48.349 taxed later, possibly at lower capital gains 00:03:48.349 --> 00:03:50.930 rates. That's the potential, yes. It requires 00:03:50.930 --> 00:03:53.569 careful planning and meeting specific IRS rules. 00:03:53.610 --> 00:03:56.110 It's not automatic. But it's a reason someone 00:03:56.110 --> 00:03:58.250 might take the physical metal instead of cash 00:03:58.250 --> 00:04:00.789 from the IRA. Interesting. OK, what else? Asset 00:04:00.789 --> 00:04:02.710 preservation. Yeah, that's a big one too. If 00:04:02.710 --> 00:04:05.129 you really believe in the long term value of 00:04:05.129 --> 00:04:07.689 those specific metals you hold, maybe certain 00:04:07.689 --> 00:04:10.210 coins or bars. You don't want the custodian to 00:04:10.210 --> 00:04:12.469 just sell them off. Right. You want to hold on 00:04:12.469 --> 00:04:14.250 to those specific assets because you think they'll 00:04:14.250 --> 00:04:17.069 appreciate further. Taking them in kind lets 00:04:17.069 --> 00:04:19.509 you do that. You maintain that direct connection. 00:04:19.829 --> 00:04:21.910 Makes sense. And the research mentioned something 00:04:21.910 --> 00:04:24.490 about speed. That sometimes getting the metal 00:04:24.490 --> 00:04:27.709 is faster than selling. That seems counterintuitive. 00:04:27.949 --> 00:04:31.750 It can be, sometimes. If you hold, say, less 00:04:31.750 --> 00:04:34.790 common coins or bars, finding a buyer at the 00:04:34.790 --> 00:04:38.670 price you want might take time. Ah, okay. Versus 00:04:38.670 --> 00:04:40.910 just initiating the distribution process with 00:04:40.910 --> 00:04:43.250 the custodian. Exactly. If you need the asset 00:04:43.250 --> 00:04:45.649 itself relatively quickly, sometimes the direct 00:04:45.649 --> 00:04:47.790 physical distribution might be more straightforward 00:04:47.790 --> 00:04:51.089 than navigating a sale first. Plus, there's a 00:04:51.089 --> 00:04:53.329 whole diversification angle. Right, having physical 00:04:53.329 --> 00:04:55.430 assets outside the traditional financial system. 00:04:55.769 --> 00:04:59.139 Stocks? Bonds. Physical metals can act as a hedge. 00:04:59.379 --> 00:05:01.379 They often move differently than the stock market, 00:05:01.480 --> 00:05:03.459 which can be appealing, especially when things 00:05:03.459 --> 00:05:06.139 feel uncertain economically. So it adds another 00:05:06.139 --> 00:05:08.540 layer to your portfolio. It does. And you know, 00:05:08.660 --> 00:05:10.379 beyond the numbers, it really comes back to that 00:05:10.379 --> 00:05:12.560 control point. For some people, tangible assets 00:05:12.560 --> 00:05:15.220 just feel more secure. Especially in, like I 00:05:15.220 --> 00:05:18.040 said, uncertain times. Yeah. Having that gold 00:05:18.040 --> 00:05:21.199 or silver in your possession, not just as a line 00:05:21.199 --> 00:05:23.300 item on a statement, that offers a different 00:05:23.300 --> 00:05:25.899 kind of peace of mind for some investors. An 00:05:25.899 --> 00:05:27.980 in -kind distribution is really the ultimate 00:05:27.980 --> 00:05:30.500 way to achieve that direct control over those 00:05:30.500 --> 00:05:33.480 specific pieces you own. OK, I think the why 00:05:33.480 --> 00:05:35.800 is becoming clear. So let's shift to the how. 00:05:36.240 --> 00:05:39.420 If someone decides, yes, I want to do this, what 00:05:39.420 --> 00:05:42.379 are the actual steps, practically speaking? Well, 00:05:42.379 --> 00:05:44.779 first, as we discussed, nail down the value. 00:05:45.000 --> 00:05:47.720 get that fair market value appraisal from your 00:05:47.720 --> 00:05:49.459 custodian right around the time you plan to do 00:05:49.459 --> 00:05:53.680 it. Step one, valuation. Got it. Step two, contact 00:05:53.680 --> 00:05:56.639 your gold IRA company or custodian. They handle 00:05:56.639 --> 00:05:59.279 the logistics. You'll need to tell them exactly 00:05:59.279 --> 00:06:01.660 what you want to take out, type of metal, amount. 00:06:01.800 --> 00:06:03.959 There will be forms. Paperwork, of course. Always 00:06:03.959 --> 00:06:07.100 paperwork. Then the crucial part is arranging 00:06:07.100 --> 00:06:09.459 the delivery. Secure shipping. Yeah, you don't 00:06:09.459 --> 00:06:11.259 want that getting lost in the mail. Absolutely 00:06:11.259 --> 00:06:13.740 not. Your provider should use a reputable shipper, 00:06:13.920 --> 00:06:15.699 someone experienced with valuable items like 00:06:15.699 --> 00:06:18.199 precious metals, and it must be fully insured 00:06:18.199 --> 00:06:20.959 and tracked. For peace of mind during transit. 00:06:21.459 --> 00:06:23.639 Makes sense. Totally. You need that confirmation 00:06:23.639 --> 00:06:26.120 and security. And we talked about timing impacting 00:06:26.120 --> 00:06:28.720 value. The research really stressed watching 00:06:28.720 --> 00:06:30.480 the market, maybe talking to an advisor about 00:06:30.480 --> 00:06:32.339 what to pull the trigger. Definitely. because 00:06:32.339 --> 00:06:35.300 that market value on distribution day sets your 00:06:35.300 --> 00:06:38.139 taxable income. So, yeah, monitoring trends, 00:06:38.379 --> 00:06:40.300 getting advice on whether now is a good time 00:06:40.300 --> 00:06:44.300 relative to prices and your tax situation. That's 00:06:44.300 --> 00:06:47.060 smart. Be ready for those value swings. Okay, 00:06:47.379 --> 00:06:49.660 rules. Let's talk IRS rules. What are the big 00:06:49.660 --> 00:06:52.139 ones here? Well, the main one is taxation. Like 00:06:52.139 --> 00:06:54.699 any traditional IRA distribution, whether it's 00:06:54.699 --> 00:06:57.480 cash or in -kind metal, it's generally taxed 00:06:57.480 --> 00:06:59.620 as ordinary income based on that fair market 00:06:59.620 --> 00:07:01.939 value on the distribution date. So it adds to 00:07:01.939 --> 00:07:03.740 your income for that year. Correct. And don't 00:07:03.740 --> 00:07:06.040 forget the early withdrawal penalty if you're 00:07:06.040 --> 00:07:09.180 under age 59 and a half. Ouch. That's a 10 % 00:07:09.180 --> 00:07:11.420 penalty on top of the regular income tax. Yep. 00:07:11.629 --> 00:07:14.769 10%. It's a pretty significant deterrent unless 00:07:14.769 --> 00:07:16.689 it's an emergency and you meet one of the few 00:07:16.689 --> 00:07:21.230 exceptions. Good to know. What about RMDs? Required 00:07:21.230 --> 00:07:23.709 minimum distributions if you're, what, 73 or 00:07:23.709 --> 00:07:28.170 older now? That's right, 73 or older. RMDs absolutely 00:07:28.170 --> 00:07:30.649 apply to precious metals IRAs, just like other 00:07:30.649 --> 00:07:33.490 IRAs. The IRS wants you to start taking money 00:07:33.490 --> 00:07:36.810 out. Can you satisfy your RMD by taking an in 00:07:36.810 --> 00:07:40.060 -kind distribution? Yes, you can. The fair market 00:07:40.060 --> 00:07:42.920 value of the metals you take out counts towards 00:07:42.920 --> 00:07:45.860 fulfilling your RMD for that year. But the value 00:07:45.860 --> 00:07:48.879 has to be enough, right? Exactly. The market 00:07:48.879 --> 00:07:52.220 value of the distributed metals has to meet or 00:07:52.220 --> 00:07:54.839 exceed your calculated RMD amount for that year. 00:07:55.220 --> 00:07:57.259 If it falls short, then you still owe the difference. 00:07:57.360 --> 00:07:59.500 You'd need to take out more, either more metal 00:07:59.500 --> 00:08:01.779 or potentially cash, to make up the difference 00:08:01.779 --> 00:08:04.079 and avoid penalties on the RMD shortfall. OK, 00:08:04.120 --> 00:08:07.410 so the tax implications. its ordinary income, 00:08:08.009 --> 00:08:09.769 could bump you into a higher tax bracket for 00:08:09.769 --> 00:08:12.509 the year. Potentially, yes. That's why talking 00:08:12.509 --> 00:08:15.250 to a tax advisor beforehand is really, really 00:08:15.250 --> 00:08:17.170 crucial. They can help you understand the full 00:08:17.170 --> 00:08:19.670 impact and maybe strategize a bit to minimize 00:08:19.670 --> 00:08:21.649 the tax bite, if possible. Right. So there are 00:08:21.649 --> 00:08:23.949 clear benefits that control potential tax angles 00:08:23.949 --> 00:08:26.649 like NUA, diversification. Yeah. But we need 00:08:26.649 --> 00:08:28.889 to be real about the downsides, too. The challenges. 00:08:29.069 --> 00:08:30.930 Absolutely. Number one is probably liquidity. 00:08:31.310 --> 00:08:33.519 Meaning? turning it back into cash if you need 00:08:33.519 --> 00:08:36.399 it quickly. Exactly. Holding physical metal is 00:08:36.399 --> 00:08:38.879 great, but it's not like selling stock with a 00:08:38.879 --> 00:08:41.519 click of a button. Selling physical gold or silver 00:08:41.519 --> 00:08:44.759 takes time. You need to find a buyer, agree on 00:08:44.759 --> 00:08:47.620 a price, arrange delivery. There might be transaction 00:08:47.620 --> 00:08:50.820 costs, dealer markups. For sure. So if you suddenly 00:08:50.820 --> 00:08:54.200 need cash fast, relying solely on selling your 00:08:54.200 --> 00:08:56.700 physical metals might be problematic. You need 00:08:56.700 --> 00:08:59.240 a plan for liquidity outside of these assets. 00:08:59.360 --> 00:09:01.169 That's a really practical point. And then there's 00:09:01.169 --> 00:09:04.269 the whole, where do you put it? Yeah, yeah. Once 00:09:04.269 --> 00:09:07.450 it's out of the IRA depository, storage is entirely 00:09:07.450 --> 00:09:10.009 your problem. You need a really good safe. Or 00:09:10.009 --> 00:09:12.250 pay for vault storage somewhere else. Yep. A 00:09:12.250 --> 00:09:14.570 certified home safe, maybe renting space and 00:09:14.570 --> 00:09:16.909 a private depository, getting adequate insurance. 00:09:17.370 --> 00:09:20.610 These all add costs and logistical hurdles. It's 00:09:20.610 --> 00:09:22.590 a whole different kind of responsibility than 00:09:22.590 --> 00:09:25.029 just having the custodian handle it. Plus the 00:09:25.029 --> 00:09:27.309 market itself. Metals can be volatile, can't 00:09:27.309 --> 00:09:30.379 they? They certainly can. Prices go up, but they 00:09:30.379 --> 00:09:33.440 also go down. While they can hedge against some 00:09:33.440 --> 00:09:36.379 economic issues, you're still exposed to that 00:09:36.379 --> 00:09:39.779 market risk. The value of what you hold can fluctuate 00:09:39.779 --> 00:09:42.240 quite a bit. So diversification within your overall 00:09:42.240 --> 00:09:45.200 plan remains key. Always. You don't want all 00:09:45.200 --> 00:09:47.259 your eggs in one basket, whether it's stocks, 00:09:47.440 --> 00:09:50.500 bonds, or physical metals. Spreading investments 00:09:50.500 --> 00:09:53.480 helps manage that volatility risk across your 00:09:53.480 --> 00:09:55.919 entire financial picture. OK, so let's try to 00:09:55.919 --> 00:09:58.279 wrap this up. What's the bottom line for someone 00:09:58.279 --> 00:10:00.590 listening? Well, we've seen that taking an in 00:10:00.590 --> 00:10:02.549 -kind distribution, getting the physical metal 00:10:02.549 --> 00:10:05.350 from your precious metals IRA is definitely an 00:10:05.350 --> 00:10:07.789 option. It lets you get that gold, silver, platinum, 00:10:08.009 --> 00:10:09.909 whatever, directly into your hands instead of 00:10:09.909 --> 00:10:12.509 just cash. Right. And the potential upsides are 00:10:12.509 --> 00:10:15.210 there. Diversification, maybe keeping specific 00:10:15.210 --> 00:10:17.669 assets you really believe in, that tangible control, 00:10:17.970 --> 00:10:20.350 and maybe, just maybe, some tax advantages with 00:10:20.350 --> 00:10:22.830 NUA if you qualify. But, and this is a big but. 00:10:23.009 --> 00:10:25.409 Yeah, you've got to weigh the downsides. The 00:10:25.409 --> 00:10:28.610 tax hit is based on current market value, which 00:10:28.610 --> 00:10:31.490 counts as ordinary income. You've got R &Ds to 00:10:31.490 --> 00:10:34.710 worry about if you're over 73. That 10 % early 00:10:34.710 --> 00:10:37.309 withdrawal penalty if you're under 59 and a half. 00:10:37.830 --> 00:10:39.990 And the practical stuff. Figuring out liquidity 00:10:39.990 --> 00:10:43.210 when you need cash, secure storage, insurance, 00:10:43.529 --> 00:10:45.889 plus dealing with market swings. Exactly. It's 00:10:45.889 --> 00:10:48.929 not a simple decision. So... This deep dive really 00:10:48.929 --> 00:10:52.230 shows that while in -kind distributions offer 00:10:52.230 --> 00:10:54.850 this unique flexibility, this tangible connection, 00:10:55.889 --> 00:10:58.070 it's absolutely not for everyone. No, it's definitely 00:10:58.070 --> 00:11:00.330 not a one -size -fits -all strategy. You really 00:11:00.330 --> 00:11:02.230 have to look hard at your own financial goals, 00:11:02.590 --> 00:11:05.070 how much risk you're comfortable with, your overall 00:11:05.070 --> 00:11:07.629 investment plan. Probably best to talk it through 00:11:07.629 --> 00:11:09.789 with a financial advisor you trust. Absolutely 00:11:09.789 --> 00:11:11.370 essential. And you know, considering all this 00:11:11.370 --> 00:11:12.889 complexity, it does raise a broader question, 00:11:12.950 --> 00:11:14.940 doesn't it? Which is? In today's world, with 00:11:14.940 --> 00:11:17.059 so much financial information, so many products 00:11:17.059 --> 00:11:20.720 and strategies, how do you, the individual investor, 00:11:21.100 --> 00:11:23.179 figure out what actually makes sense for your 00:11:23.179 --> 00:11:26.580 specific situation, your personal financial landscape? 00:11:27.159 --> 00:11:30.000 That's a big question indeed. Which leads us 00:11:30.000 --> 00:11:32.279 to maybe a final thought for everyone listening. 00:11:32.500 --> 00:11:35.840 Go for it. Consider this. In this constantly 00:11:35.840 --> 00:11:38.639 shifting economic climate we're in, what role 00:11:38.639 --> 00:11:40.919 could something tangible, like physical precious 00:11:40.919 --> 00:11:43.279 metals, play in giving you a different kind of 00:11:43.279 --> 00:11:45.600 peace of mind for retirement, something beyond 00:11:45.600 --> 00:11:48.179 just the dollar value? A different sense of security, 00:11:48.379 --> 00:11:51.340 perhaps. Maybe. And maybe think about how much 00:11:51.340 --> 00:11:53.139 of that potential peace of mind simply comes 00:11:53.139 --> 00:11:55.220 from understanding all the options available 00:11:55.220 --> 00:11:57.159 to you, even the less common ones like these 00:11:57.159 --> 00:11:59.960 in -kind distributions, just knowing what's possible.