Precious metals can help to diversify your investment portfolio. They can also give you stability when traditional assets like stocks and bonds may be crashing. Unfortunately, many people miss out on these opportunities because they don't know about precious metals IRAs or think they're too hard to use. Here's how you can easily add them to your retirement strategy.
You Can Open a Traditional or Roth Precious Metals IRA
Like other IRAs, precious metals IRAs come in two types. If you select a traditional IRA, you may be able to qualify for a tax deduction on the amount you deposit now. When you retire, you'll pay tax on the amount you withdraw like regular income. If you select a Roth IRA, you don't get a tax break on the money you deposit. Instead, the money in your Roth IRA grows tax-free, and you pay no taxes when you withdraw it in retirement.
You Can Pair a Precious Metals IRA with a 401(k)
If you have a 401(k) at work, you're still allowed to have an IRA. Since most 401(k)s give you a limited selection of stock and bond funds, choosing a precious metals IRA can actually help you diversify into investments that you can't get inside of your 401(k). In addition, the IRA limits are separate and in addition to your 401(k) limits, so an IRA can be especially helpful if you want to max out your retirement contributions to retire early.
You Can Have Multiple IRAs
You are allowed to have as many IRAs as you want as long as you stay under the contribution limit each year. The contribution limit is for all of your IRAs together not for each individual IRA.
You might do this if you already have other investments in an IRA that you don't want to switch to precious metals or if you only want to put a certain percentage of your contributions into precious metals while still contributing to stock or bond funds.
You Can Transfer Between IRAs
If you want to rebalance your investments or move into different types of investments, you can transfer money between your IRAs of the same type at any time. It's not quite as easy as a regular bank transfer, but all you need to do is make a transfer request with your IRA provider. Moving money between IRAs doesn't count as an early withdrawal, so you don't get taxed on it.
To learn more, contact a local precious metals IRA service like McAlvany ICA today.
Unfortunately, personal finance is not a subject that is widely taught in schools. And yet, to be a functioning adult in society, you need to know the basics about earning money, saving money, taking out loans, paying interest, and so forth. Money makes the world go 'round, and you won't get very far in the world without a basic money education. There are many ways to learn more about money, from reading books to visiting a personal financial advisor. You can start by reading some of the articles on this blog, which address a wide range of financial topics for people in every situation.