How to Invest in Precious Metals with Your Retirement Fund

Today most IRA accounts invest in low-interest ventures and for that reason they don’t generate much return other than what you put in the account. Sometimes the accounts can’t even keep up with inflation, and that is truly concerning. Some investors have been investing in precious metals as a more lucrative option than the fixed-income investments and it’s entirely possible to do this using a self-directed IRA, but it will cost you.

If you decide to diversify your retirement account more by investing some of your money in precious metals you need a custodian or administrator that will let you make such an investment? Any of the banks or brokerages that allow this type of investment often call the accounts self-directed IRAs or SDIRAs. SDIRAs come along with more start up and maintenance fees than standard IRAs do and that is because you are requiring the custodian to do more work by setting one of them up.

Your custodian will have to purchase the gold or silver, or whatever precious metal it is that you want with your IRA funds and then hold onto them for you until you are ready to cash them in after retirement. This is a vital concept to understand if you hope to avoid getting hit with fees. Your custodian has to hold the metals at a location designated for your account. You cannot use your IRA money to buy precious metals and then store them in your home.

But having a custodian buy all of this gold or platinum for you and then store it as well is not a free service that he will do out of the kindness of his heart. You will have to pay to have your account setup and then will have to pay a yearly maintenance fee and probably a storage fee as well. All of these fees add up and that is why you have to be careful with your purchases.

Of course investors will try and choose precious metals that are going to increase in value over time, but there is no way to know that they will. Investing in precious metals is a good way to protect your overall portfolio, but you shouldn’t invest all of it this way. Instead only invest a portion of your money in precious metals and keep the rest of your money in other investments.

You will make your portfolio safer and giver yourself more opportunities to earn returns on your investment. If something does go wrong with one of your investments you will have several others to fall back on. Just make sure you read up on the rules involved with purchasing precious metals with your IRA before making a move and you should be fine.

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How to Invest in Precious Metals with Your Retirement Fund