1) What is an IRA?
An IRA, or Individual Retirement Account, is a savings plan for your retirement that has been designed specifically to provide tax advantages to individual investors such as tax-free or at least tax-deferred growth of earnings. There are several different types or IRA accounts- all of which have different rules that govern the minimum withdrawal age, annual limits on contributions, and others. Most commonly, IRAs are used to supplement an employer’s 401(k) account and typically will be the majority of your investment portfolio.
2) Is it OK to have more than one IRA?
Yes. There is no limit on how many Gold IRA Rollover you can have at once, but there are limitations on the total amount you can invest annually into IRAs. In December 2011, if you were under 50, you can contribute up to $5,000 per year in all IRAs. If you were over 50, you can invest up to $6,000 per year.
3) Can my existing IRAs be used to invest in precious metals?
Typically, yes. However, the final decision is left to your current custodian or trustee.
4) How can I invest my IRAs into precious metals?
As long as your IRA is self-directed, you can simply direct some of your funds into precious metals. Most commonly, you can invest in palladium, platinum, silver, or gold. However, you must know that any precious metal, whether it be in coin or bullion form, must meet certain requirements of purity and refinement.
5) What is the difference between a traditional a self-directed IRA?
A traditional IRA is controlled by a custodian or trustee. You must allow them to direct your funds into investments that they deem to be worthy. A self-directed IRA is where you get to choose where your funds are invested. You don’t have to follow the decisions of a custodian or trustee. The main benefit of the self-directed IRA is that you get to choose from stocks, bonds, precious metals, mutual funds, CDs, or other IRA-compliant investments.
6) What is a traditional IRA versus a Roth IRA?
First of all, you must know that anyone who has an income can contribute to an IRA. If you were under 50 in 2011, you can contribute up to $5,000 annually. If you were over 50 in 2011, you can contribute up to $6,000 annually.Depending on your income, marital status, and membership of employer plans, your contributions to traditional IRAs can be tax deductible. Contributions to traditional IRAs are deducted from your total income, so your tax liability is reduced and therefore you are not taxed on it. If you opt to take funds out of your traditional IRA before reaching the age of 59 1/2, you will have to pay penalties and taxes. However, if you are using the funds to pay back higher education fees or to purchase a house, you will not have to pay the penalties, but you will have to pay the taxes.
With a Roth RIA, you don’t get any tax deductions on your contributions, but you can withdraw the funds completely upon your retirement without having to pay taxes and penalties. The condition to enjoy this benefit is that you must be over 70 1/2. Also, you can only have a Roth IRA if your adjusted gross income is less than $107,000 for a single taxpayer or less than $169,000 for married couples who file jointly.