Many investors are unable to define what a gold IRA is, and thus have not considered them for their retirement investing plans. An investment in precious metals, such as a gold IRA which is an Individual Retirement Account that stores gold or other approved precious metals, is regarded by many as much more favorable than paper currency or paper-based assets.
The four precious metals allowed to be used in precious metal IRAs are gold, silver, platinum, and palladium.
The gold IRA investment option functions in the exact same way that a regular IRA does, only instead of holding paper assets, it holds physical bullion coins or bars. The four precious metals allowed to be used in precious metal IRAs are gold, silver, platinum, and palladium, and must be in the approved form of coin or bar products.
Generally speaking, precious metal IRAs are most often self-directed IRAs. This means that this type of IRA allows for a broader array of favorable investments to be held within the account; along with giving the holder of the IRA more control over those investments than a traditional IRA would. Additionally, many type of retirement accounts are eligible to be converted into a gold IRA, such as Roth IRAs, Thrift Savings Plan, and 401(k)s.
For those uneasy with the physical ownership of precious metal assets by their IRA, despite the surging price of gold making the option so popular, there are other investment opportunities out there. For instance, investors who are uncomfortable having their IRAs own coins or bullion can buy shares of an exchange traded fund. ETFs track the value particular precious metals but they themselves are not the physical assets. Using this approach to investing, an investor can gain some of the benefits of the upward trending values of precious metal investments and still enjoy the diversification and lower risk associated with alternative investments.