Many investors wonder, can I hold physical silver in my IRA? The short answer is no- unless you open a precious metals IRA.
I did that very thing and started making silver IRA investments buying physical precious metals.
At first, I didn’t know how to buy silver with IRA money, but I knew I wanted a more diversified portfolio. That is when I learned about rollovers.
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Rollovers and Precious Metals IRA: An Introduction
Rollovers are the best way to fund your new silver IRA. Before we look at the process, let’s talk a little more about what a silver individual retirement account is.
What Is a Silver IRA?
Silver IRAs are a type of retirement savings account that allows investors to hold physical silver bullion, silver coins, and bars. It is much the same as a gold IRA. Some account options overlap.
I chose to open a precious metals IRA that lets me invest in silver and gold.
- How does a silver IRA work?
A silver IRA works similarly to a traditional IRA. It is self-directed, has the same tax benefits, and comes with the same rules and restrictions regarding withdrawals.
They are opened through silver IRA companies and must have an appointed custodian to handle all transactions. The IRS allows precious metals IRAs but does not let just anyone purchase silver for the account.
GoldCo is the best silver IRA company, from my experience. American Hartford Gold Group and Augusta Precious Metals are also worth a look.
- How can you buy silver in an IRA using a rollover?
Only the account custodian can buy IRA-approved silver for the account- but they can only do so upon your direction. Although you can make annual contributions from regular income and savings, the more effective way to do it is to use existing funds from your retirement portfolio.
To avoid paying heavy fines for withdrawing funds early, you need to arrange a rollover from an existing retirement account (including IRAs and 401(k) accounts).
What Is the Process for Rolling Over Funds Into a Silver IRA Account?
There are two types of silver or gold IRA rollover- direct and indirect. I chose a direct rollover because it seemed less risky and more convenient- but I have shared both processes below.
Direct Rollover
- Inform your existing retirement account that you want to move X amount, and have them transfer funds to your silver IRA.
- The appointed custodian at the silver IRA company will receive the fund in your account and will notify you.
- You then instruct the custodian to purchase gold, silver, or other precious metals using the funds.
Indirect Rollover
- Inform your existing retirement account that you want to move X amount, and have them transfer funds to your personal account.
- Wait for the funds to arrive, then you have 60 days to move the amount (in full) to your precious metal IRA.
- Once you complete the transfer, you can begin purchasing precious metals through your custodian.
DO NOT miss the deadline. If you do, you will pay tax and a high interest rate on the moved funds- since it technically counts as an early withdrawal.
Summary
Investing in a silver IRA via a rollover is easy. I thought it seemed like a complex process- but I was wrong. I recommend choosing a direct rollover to save yourself any stress or potential issues.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.
