A gold or silver backed IRA is a retirement account that purchases physical precious metals as an investment over stocks, bonds or other paper backed investments. These retirement accounts have been around since 1997. However, they have only just begun to increase in popularity thanks to the global economic meltdown.
According to federal law, you can invest in silver along with other precious metals in your IRA, 401k or other retirement account. However, there are differences between investing in gold IRAs and paper backed IRAs. First and foremost, these are account holder directed accounts. That means that you decide when and how much gold or silver to purchase and then who will be entrusted to hold your investments for you. This is known as the custodian of your investment. The reason for having a custodian is simple: precious metals are a real, tangible investment. Stocks and other paper backed securities are not. The IRS does not allow for investors to hold the physical metals they are invested in and require the assets to be held in storage by an appointed custodian.
The reason for investing in precious metals is simple. It provides a hedge against losses in the stock market because they tend to increase in value as the stock market decreases. It is a way to protect your retirement investment from loss during hard economic times.
Is investing in gold or silver right for you?
Keeping inflation at bay and recession-proofing your retirement income are great reasons for wanting a precious metals backed IRA. They are simple, straightforward accounts that are easy to manage. It is one of the truest buy and hold investments you’ll ever make.
Many investors are choosing to invest a large portion of their retirement account balance in gold and silver. This allows your retirement account to grow at the best possible rate while protecting it against loss if the bottom drops out of the markets again.
These accounts offer an alternative way to investing in gold.
They provide your account with a hedge against future stock market crashes, economic uncertainty, and inflation. Gold and silver have held their value for thousands of years while other assets have collapsed or completely vanished. In a time when even the US dollar is being questioned as a safe investment, gold and silver are an excellent choice for your IRA.