Welcome back to the deep dive. Today, we're wading
into some, uh, Very shiny, but I'd say arguably
treacherous water. That's a good way to put it.
We're talking about retirement planning, but
not the boring stuff. You know, we aren't talking
about mutual funds or those abstract numbers
on a screen that you check once a quarter. No,
today we're talking about the physical stuff,
the treasure chest scenario. Exactly. I think
everyone has this fantasy, right? You picture
your retirement savings not as a spreadsheet,
but as like a literal vault. You walk in, it's
cold, it's quiet, and there are stacks of silver
bars and coins. It feels real. It feels secure
in a way. A 401k statement just never does. It
has a very primal appeal, tangible wealth. But
here's the reality check we're dealing with today.
If you try to build that treasure chest inside
a tax advantaged account, like an IRA, You are
walking into a minefield of government regulation.
That's what I gathered from the reading. It seems
like you can't just throw any old silver coin
into the chest. If you pick the wrong one, the
IRS doesn't just say no. They say, pay us. And
they say it loudly. So to help us navigate this,
we're looking at a comprehensive breakdown by
Doug Young. He's a financial markets researcher
over 20 years in the game. And he spent, what,
the last decade and a half? specifically focused
on gold and silver IRAs. Right. Doug is essentially
the guy who reads the fine print in the IRS tax
code so you don't have to. Perfect. So our mission
today is pretty simple. We are going to decode
his research to figure out exactly what belongs
in that treasure chest. What's good, silver?
What's bad, silver? And why the date 2013 matters
so much if you happen to like British coins.
I saw that note. Yeah, that's a wild, specific
detail. We'll definitely get to that. But before
we get to the specific coins, we need to understand
the rules of the road, because I think a lot
of people, myself included, just assume silver
is silver. Right. Yeah. If I have a silver bar,
why does the IRS care which one it is? They care
because the IRS isn't a coin collector. They're
a tax agency. And for an asset to sit in a retirement
account, it needs to have a standardized clear
market value. So Young identifies three golden
rules, or I guess we should call them silver
rules, that act as the gatekeeper. OK, let's
break these down. What's the first barrier to
entry? It's all about purity. This is the big
one. The non -negotiable number. And how pure
is pure? For silver to be eligible, it must be
99 .9 % pure. 99 .9, wow. That seems incredibly
high. I mean, I look at my silverware or jewelry
and it usually says sterling. Isn't that enough?
Not even close. Sterling silver is .925. Uh -huh.
So 92 .5 % silver. Oh. The rest is usually copper
to make it harder, which is great for a fork.
You don't want it to bend. Right, when you're
eating a steak or something. But it's garbage
to the IRS. Even those old cowboy dollars you
see in movies. Those are usually 90 % silver.
Also, not good enough. So why the obsession with
the extra nines? Why do they care if there's
a little copper in there? It comes down to a
concept called fungibility. Okay, that's a $5
word. Break that down for me. Fungibility just
means that one unit of something is interchangeable
with another unit of the same thing. A dollar
bill is fungible. My dollar is worth exactly
the same as your dollar. Right. The government
wants to know that one ounce of silver in your
account is worth exactly the same as one ounce
of silver in my account. impurities mess that
up. They make the value subjective. So you'd
need like an appraiser to figure out how much
is actually in there. Exactly. But 99 .9 % pure
silver. That's a raw commodity. It has a specific
global price. Okay, that actually makes sense.
They want it to be liquid. They don't want you
holding weird antiques that take six months to
sell. So rule one, it has to be virtually pure.
What's rule two? Certification. You can't just
refine silver in your basement, pour it into
a mold, and scratch 99 .9 on it. There goes my
weekend plan. I was going to fire up the kiln.
Yeah, you have to shut it down. The silver must
be certified by a recognized manufacturer or
have a hallmark from a major exchange. The source
lists the big ones. ComEx, NYMEX, the LBMA in
London. So it needs a pedigree, a paper trail.
Exactly. It needs a stamp that guarantees that
purity we just talked about. Without it, The
market and the IRS won't trust it. And the third
rule. Condition. This one actually catches people
off guard. The silver must be in good condition.
Define good. Free of damage, no heavy scratches,
no dents, no excessive wear. See, that feels
subjective to me and honestly a little unfair.
If I have a pure silver bar and I drop it and
it gets a dent, it's still the same amount of
silver, isn't it? It is. The atoms haven't gone
anywhere. Why does the IRS care if it's ugly?
You're thinking like a chemist. The IRS is thinking
like an accountant. If an asset is damaged, its
resale value drops. An IRA is a financial vehicle.
If the assets inside it are degraded, the value
of the account is compromised. So they insist
on unimpaired quality. OK, so we have the framework.
99 .9 % pure, certified source, good condition.
Now I want to get to the fun part, the actual
loot. What can we actually put in the chest?
Let's start with coins. This is the most popular
entry point. And according to Young's analysis,
the heavyweight champion of the world is undoubtedly
the American silver eagle. The American standard.
It really is. Yeah. It's minted by the US Mint.
It hits that purity requirement perfectly. And
it is arguably the most recognized silver coin
on the planet. And being recognized matters when
you try to sell it, right? Hugely. It's about
liquidity. You can sell an American eagle anywhere
in the world. A coin dealer in Tokyo or London
knows exactly what it is. Got it. Now, there's
nuance here the source mentions. You can also
buy a proof version of the eagle. Proof just
means shiny, right? Basically. It's struck multiple
times to give it a mirror -like background. It's
designed for collectors. The source notes that
these are allowed in an IRA. But should you?
I mean, if it's just silver, why pay extra for
the shine? That's the real question. Proof coins
carry a higher premium. You pay more for the
craftsmanship. But the silver content is the
same as the regular bullion version. So if your
goal is just to stack silver, the regular version
is more efficient. Right. And if you want something
pretty to look at, well, actually, you can't
look at it. Oh, right. Because it's locked in
a vault somewhere. We'll get to the storage rules
later. But that's a great point. You're paying
for a finish you can't even admire on your coffee
table. It's not the most efficient use of your
investment dollars, no. But let's look internationally.
The IRS is surprisingly cosmopolitan, as long
as the purity holds up. OK. And this is where
we see some countries kind of showing off. Take
Canada. The maple leaf. The Canadian silver maple
leaf. Now listen to this distinction. The American
eagle is .999 pure. The Canadian maple leaf is
.999 pure. The four nines. The four nines. It
is technically pure. Does that make a massive
difference in price? Not really. But for the
purists, it's a flex. by the Royal Canadian Mint.
They're basically saying, we can refine this
better than anyone else. I noticed the list also
included the Austrian Vienna Philharmonic. Yes,
the only major bullion coin denominated in euros.
It's beautiful instruments on one side, the great
organ of the Musikherin Konzer Hall on the other.
I like the idea of having a little culture in
the portfolio. It feels sophisticated. It does.
And then you have the Australian coins from the
Perth mint, the silver koalas, the kookaburras,
and the lunar series. The lunar series is the
zodiac animals, right? Right. You're the dragon.
You're the snake. You could literally have a
zoo in your IRA. Pandas, koalas, snakes. You
could. The Chinese silver panda is another eligible
one. And what's cool about the panda is the design
changes every year. Which usually makes things
collectible, doesn't it? And I thought collectibles
were banned. It's a gray area that lands on the
safe side. Because it's a standard government
issued bullion coin, it slips through the gate.
Interesting. But and here's where it gets really
tricky. You have to be so careful. Just because
a country makes a silver coin doesn't mean every
version of that coin is allowed. OK, this is
where we get to the traps. I read this part of
Doug Young's report twice. There's a specific
trap with the silver Britannia. This is the kind
of detail where you really need an expert. If
you try to do this yourself, you will get burned.
Okay. The silver Britannia is a classic coin,
but prior to 2013, the Royal Mint made them with
.958 silver. .958, that is such a random number.
It's historically known as Britannia silver.
It's an old standard, but remember the golden
rule. 99 .9%. Exactly. So .958 fails. It wasn't
until 2013 that the Royal Mint upgraded the purity
to .999. So if I buy a 2012 Britannia, it's a
prohibited asset and I get fined. But a 2014
Britannia is perfectly fine. You got it. That
is terrifyingly specific. You're talking about
a one year difference that could disqualify your
entire account. It shows that the IRS looks at
chemistry, not history. They don't care that
it's a Britannia. They care about the ally composition.
Are there other traps like that? The other big
one is the Old West trap. People love Morgan
dollars and peace dollars. They feel like real
money. Yeah, they're heavy. They have history.
But they are 90 % silver. So they are out. Generally,
yes. Young Note's a very rare exception. There
are select modern mintings that hit the 99 .9
% mark, but they are incredibly rare. For the
most part, stay away. OK, so unless I really
know what I'm doing, stick to modern high -purity
coins. But let's ship gears. What if I don't
care about the pretty pictures? You just won't
wait. I just won't wait. I want to get the most
silver for my dollar. Then you graduate to bars.
Bars are the choice for efficiency. Why is that?
It comes down to two terms. Spot price and premium.
Break those down? The spot price is the raw market
value of the silver. Yeah. The premium is everything
else. The cost to shape it, stamp it, ship it,
and the dealer's profit. Right. It costs more
money to mint a coin, to stamp an eagle on it,
than it does to pour a simple rectangular bar.
That makes sense. So coins have a higher premium.
Bars have a lower premium. When you buy a bar,
More of your money is going toward the actual
silver. So if I have $50 ,000 to invest, I get
more actual silver if I buy bars than if I buy
Eagles. Precisely. It's the bulk discount approach.
But again, you can't just buy any bar. Names
matter. Who are the approved players? The source
lists the heavy hitters. Johnson Mathia. PMP
Suisse. You'll recognize them. They often have
Lady Fortuna on the bar. A little goddess of
luck for the retirement fund. I like it. Never
hurts. And there's sunshine minting. Young points
out a really cool feature with their 10 ounce
bars. They have something called mint mark SI.
Is that a security thing? It is. It's a grow
engraving you can only see with a special decoder
lens. It proves the bar isn't a fake. Which is
pretty important. In a world where you might
be storing this for 20 years, proving authenticity
is everything. I also saw one on the list that
sounded surprisingly green. OPM. Ohio Precious
Metals. Yeah. This is a fascinating option for
the eco -conscious investor. Mining silver is
a dirty business. Right. OPM produces bars using
recycled silver. Recycled? Like from electronics?
Industrial scrap, old jewelry, photographic chemicals,
yeah. They refine it back up to that perfect
.999 purity. So you get the asset security, but
you aren't digging a new hole in the ground to
get it. That is a great option. It feels good
to have an ethical choice. Okay, we've covered
the good stuff. Now we need to talk about the
bad list. The term in the report that I think
confuses a lot of people is collectibles. This
is the biggest pitfall. The IRS strictly forbids
collectibles in an IRA. But wait, you just said
the pandas are collectible. Isn't that a contradiction?
It is a bit confusing. When the IRS says collectible
in the context of what is banned, they're usually
referring to items where the value is detached
from the metal. And the biggest trap here is
slabbed coins. Describe a slabbed coin for me.
You've seen them. It's a coin encased in a hard,
tamper -proof plastic holder. It has a label
at the top with a grade like MS -70. Mint state
70. And that means it's perfect, right? It means
it's visually flawless. And because it's flawless,
collectors pay a huge premium for it. A regular
silver eagle might cost $35. A slabbed MS -70
eagle might cost $100 or more. So why does the
IRS hate them? Because the IRS only recognizes
the metal value. Oh. If you put that $100 coin
in your IRA, the IRS looks at it and says, that's
$35 worth of silver. Ouch. So you're taking a
loss immediately, in their eyes. In the eyes
of the tax code, yes. The source explicitly states
that slaved or certified coins are generally
not acceptable. The premium you pay for that
plastic case is dead weight. You're paying for
a grade. Not for silver. That is a crucial distinction.
You are investing in silver, not in plastic.
What about jewelry? Can I put grandma's antique
silver necklace in the IRA? Absolutely not. No
jewelry, no silverware, no plated items. Why?
Valuation. How do you price a necklace? It's
subjective. And the purity is almost never .999.
So keep the necklace in the jewelry box, not
the IRA. And just to be clear, what happens if
I mess this up? What if I sneak a 2010 Britannia
in there? It's not a slap on the wrist. Doug
Young is very clear on this. You're looking at
penalties, fines, and potential tax implications.
In a worst -case scenario, the IRS could disqualify
the entire IRA. Disqualify the entire IRA, so
the whole thing becomes taxable immediately?
Potentially. It's called a prohibited transaction.
It's like popping the balloon of your tax shelter.
All the air goes out, and you're left with a
massive tax bill. Okay, scare tactic effective.
I will stick to the list. Now, I want to pivot
to the how. Let's say I'm convinced. I want to
buy some bars and some maples. Can I just buy
them online and put them in my safe at home?
Stop right there. That is the home storage rule,
and it is the fastest way to get in trouble.
Why? It's my retirement. Why can't I hold it?
It comes back to the tax advantage status. The
IRS requires a strict chain of custody. First,
you can't contribute assets you already own.
Okay. You have to use cash in the IRA to buy
new metal. Okay, so I buy new metal. Can I have
it shipped to my house? No. You cannot be the
custodian of your own IRA assets. It must be
stored in an IRS approved depository. So no burying
it in the backyard. No backyard, no mattress,
no home safe. If you take personal possession
of the silver, the IRS considers that a distribution.
Which means taxes. Taxes and penalties. It effectively
dissolves the IRA status. The whole point of
the depository is that there's a third party
verifying, yes, the silver is here and the owner
hasn't touched it. We've focused heavily on silver
today, but obviously most people hear precious
metals IRA and think gold Why would someone choose
silver over gold? That's a great question. Yeah,
the source breaks this down The biggest argument
for silver is affordability. It's cheaper much
cheaper per ounce If you have say $2 ,000, you
might get a tiny coin of gold the size of a fingernail
For that same money, you could get a substantial
stack of silver bars. It feels more substantial.
Psychologically, that matters. Though. But there's
also the industrial argument. Silver is used
in everything. Solar panels, batteries, electronics,
medicine. So the price is driven by industry,
not just investors. Correct. Which leads to the
downside. Volatility. The price jumps around.
Gold is like a steady grandfather. It holds its
ground. Silver is like an energetic teenager.
It can spike up fast when industries need it,
but it can crash hard too. So if you have a weak
stomach, maybe don't go 100 % silver. Exactly.
And Young points out you don't have to choose.
You can diversify within the metal IRA. You can
hold gold, silver, platinum, and palladium all
in the same chest. Just checking, do platinum
and palladium have crazy purity rules too? Even
stricter, .9995. So don't guess on those either.
So what does this all mean for the listener?
We've covered purity, the date traps, the danger
of slab collectibles, the storage rules. It really
comes down to precision. The IRS has carved out
a very specific niche where treasure meets tax
code. If you stay within the lines, buy the Eagles,
buy the bars, use a custodian, it's a powerful
way to diversify. But if you try to get cute,
if you try to sneak in that 2012 Britannia or
stash the gold in your basement? You turn a tax
shelter into a tax liability. And honestly, the
biggest takeaway from Doug Young's research is
the importance of having a guide. The difference
between a compliant asset and a prohibited one
can be a decimal point in purity. It's not the
time to DIY it completely. You know, there is
one final thought I'd like to leave you with.
It's something that struck me while reading about
these chemical purity standards. Go for it. We
spend our whole lives looking at coins as money.
A quarter is 25 cents because the government
says so. Right. But in a silver IRA, the government
stops looking at these things as currency and
starts looking at them purely as chemical elements.
That's true. They don't care about the face value.
They care about the atomic structure. Exactly.
A coin in your pocket is a token of trust. A
coin in your IRA is a raw material. It's a shift
from legal tender to tangible reality. And in
a digital world, I think that is exactly why
people are drawn to it. That is a deep thought
to end on. From in God we trust to in chemistry
we trust. Something like that. Well, that wraps
up our deep dive into silver IRAs. Thanks for
listening and we'll catch you on the next one.