3 Interesting Facts about Gold IRA Investing

More and more people concerned with their financial future are re-thinking their individual retirement accounts. Losses have been massive for some investors, causing them to consider an alternative to a traditional IRA that relies solely on mutual funds, money market accounts, stocks, and bonds.

Gold, unlike paper money, will always have inherent value. It’s recognized worldwide as a valuable commodity. History shows that when the stock market plunges, the price of gold usually rises sharply. Having a gold-backed individual retirement account is a great hedge against inflation, national debt, and political unrest.

Acquiring a gold IRA is easy

Investing in a gold IRA is simple. Find a reputable custodian who has a vast knowledge of precious metals, especially of gold. Then decide which type of gold in which you’d like to invest. You’ll have a choice among gold coins, gold bars, or investing in a gold-mining company by purchasing stock in the company. All you have to do next is to fill out the required papers. You’ll also have to pay a nominal storage fee to store your gold in a depository. If you hold the gold yourself, it will be determined as a distribution of funds, so you’ll have to pay taxes and penalties.

Like other IRAs

A gold-backed individual retirement account works just like other IRAs. You’ll be able to make decisions regarding your account. This includes selling your gold if you decide to do so. Just notify your IRA custodian of your decision, and he can put the gold on the market for you. The funds you receive from the sale of your gold can be used to purchase other investment options, including money market accounts, stocks, bonds, or mutual funds.

With a gold IRA, you have certain options, just as you would with a traditional individual retirement account.

Is my gold IRA protected by law?

Like other types of individual retirement accounts, your gold-backed IRA is protected by law in most cases. For example, if you’re involved in a lawsuit, your individual retirement account will most likely not be considered as an asset that can be taken or garnished. Laws on this differ from state to state, however, and the final decision is made by the individual judge. In most cases, if the funds in your IRA are considered necessary to support you and your family after you retire, the judge will often exempt your individual retirement account. Also, some states have laws that completely protect your IRA assets from being seized to satisfy a judgment in a lawsuit.

If your IRA account is small, it will be protected by federal law. In this case, federal law will override state laws. Also, in 2005, the United State Supreme Court ruled unanimously that IRA accounts of up to $1,000,000 can be exempt from a bankruptcy estate. In this case, the Supreme Court viewed individual retirement accounts in the same way as pension plans.