Precious Metals IRA Home Storage
The world economy as a whole is right now in bad shape with lots of uncertainties. As such, investing in gold and precious metals has never been a better proposition. With this rise in popularity, one avenue of a gold IRA that you might have questions about is home storage gold IRAs. There is a lot of misconception surrounding home storage gold IRAs and today we will demystify everything there is to know and understand about them.
What is home storage gold IRA?
The name itself is quite self-explanatory. In this type of investment, you are the custodian of your own IRA and you can use the funds in this IRA to buy gold and other precious metals. The gold and precious metal thus purchased has to be stored in a home safe or a bank safety deposit box. It goes without saying that this process is a bit more complicated than just buying gold and silver and chucking it into a safe. There are many regulations governing it and as long as you follow them, this is quite a viable and practical solution to invest in gold and other precious metals.
Are they legal?
Just doing a google search regarding home storage gold IRAs will throw up results from both ends of the spectrum. Some will vehemently call it illegal while others will ask you to go in blindly with regards to its legality. Obviously, this will only cause more confusion and give you more reasons to steer clear. So, which is it? It is definitely legal but as with anything to do with finance and wealth, it is governed by certain regulations. Home storage gold IRAs are definitely legal as long as these regulations are followed. Here are some of the regulations that have been put down concerning home storage gold IRAs.
- You must start a Limited Liability Corporation or LLC with a specific operating agreement as specified by the IRS
- Detailed yearly audits must be conducted by a certified public accountant
- You must have a public place of business
- Your net worth should be $250,000 or greater
- You should have an attorney on retainer
- You should have a reputable financial background to prove that you are capable of managing your own IRA
- There should be a fidelity bond of $250,000 for each additional employee of the LLC
These aren’t the comprehensive list of regulations that will help you qualify for ownership of home storage gold IRAs but the most important ones. Consult the IRS website to get the comprehensive set of guidelines and rules that governs setting up home storage gold IRAs.
Can you store them at home?
This is another common myth that is associated with Home storage gold IRAs. Not being able to store the gold and precious metal at your home defeats the whole purpose of going the home storage gold IRA route. You can definitely store them at your home. Obviously, precious metals mean that they can be targeted by nefarious individuals and ensuring their safety falls squarely on you when it comes to the safety and security of not just the precious metals but your entire home and yourself. This is where the actual debate of should you or should you not comes in. If providing the high-level of security home storage gold IRAs need is something up your alley then there is nothing stopping you from investing in them.
Does is involve additional costs?
While certain elements like a 3rd party and their charges are eliminated in home storage gold IRAs, new ones are introduced. Setting up the LLC and getting all the paperwork in order so that it actually ends up being a fruitful venture does incur charges. Then there is the cost of keeping an attorney on retainer and paying for the audits by a public accountant. Finally, a big cost factor is the aforementioned security measures. You cannot simply chuck the gold and other precious metals in a corner of your house or under your mattress. A proper, high-security vault needs to be installed. Along with that, other safety measures such as round the clock monitoring, advanced alarm systems and physical security have to be maintained all of which can add up to quite a significant amount of money.
What are the advantages of Home storage gold IRAs?
Going to such lengths to invest in home storage gold IRAs should be worth it and it is. The primary driving force behind someone investing in gold is for security and viability. Everything else, even real estate can fluctuate massively in value with time. The one thing that will always maintain its value is gold along with precious metals. It is also a form of wealth that cannot be tampered with and as such, what can be better than having actual physical control over your wealth? You still get all the tax benefits of investing in precious metals while actually being in possession of your wealth. If you are looking for a conservative and risk-averse way of investing your wealth then home storage gold IRAs is as good as it gets.
What are the possible disadvantages?
Obviously, nothing is perfect and there are some downsides to home storage gold IRAs. The primary of these is to ensure that all the criteria are met to make the entire process legal. Even a minor slip-up can lead to the entire home storage gold IRA being treated as a distribution. This entails losing all the tax-deferred benefits with the possibility of a penalty as well. In a single sweep, you can lose more than 30% of your wealth. Then there are the security concerns.
Needless to say, home storage gold IRAs do come with certain strings attached but what doesn’t when it comes to investment. However, the risks vs rewards factor is what you need to figure out. home storage gold IRAs are not for everyone but if you are the person who wants to keep his or her wealth as close to them as possible in a form that won’t depreciate with time or the financial climate and are willing to go the extra mile to ensure that all the regulations are honored then home storage gold IRAs are a real alternative to gold IRA companies that are taking care of everything for you.
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