What makes a gold and silver IRA different from stock paper gold?

Three possible investments come to mind when discussing gold and silver IRAs. Each of these investment options is related to precious metals in some form but each option is also independent and completely different from the others. It is important for investors to clearly understand each of these three options because each is unique in terms of benefits, drawbacks and tax regulations.

A gold stock IRA usually refers to a retirement account that is comprised of gold mining stocks. There are a wide variety of these stocks available in the markets, and each performs differently because they are not tied directly to the gold spot price. Some mining companies perform better than others. Mining stocks can outperform the gold and silver spot prices at times but industrial accidents, disappointing digs and executives’ blunders often hamper gold mining stocks at inopportune times.

A gold and silver ETF IRA is more closely tied to spot prices because each share of an ETF supposedly represents a certain amount of gold. For example, one popular gold ETF translates each share into approximately 1/10oz of gold. However, it is impossible to redeem these shares for physical gold, and critics of gold ETFs have warned that the lack of vault audit regulations in this industry could mean that some shares are backed by little or no physical gold.

A Precious Metals IRA is a retirement account that allows the investor to purchase actual gold and silver. One can use their retirement funds to purchase bullion bars, bullion coins and even the American Eagle Proof. The disadvantage of a Precious Metals IRA is that the metals must be stored in a depository until the account holder reaches 59 1/2 but at that point the investor may take delivery of said metals. Since there is actual gold and silver being stored in a depository in the investor’s name the value of the account moves up and down in accord with spot prices.

If one wants to buy real gold instead of speculating on a company that mines or leases gold then a Precious Metals IRA is the right choice. For more information on starting a gold and silver IRA call our Retirement Division today at 1-800-394-3337, or get more free information on precious metal-backed retirement accounts in the latest edition of Real Money Magazine by clicking below.

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