Silver IRA

When looking for a way to invest money for retirement many people place their money either in traditional or Roth IRA accounts. However, there are several ways to go about contributing to those funds. In recent years many people have begun contributing precious metals to their IRA accounts and currently a silver IRA is considered to be a sound investment.

Traditional IRA
In the year 1974 the federal government legislated that Individual Retirement Accounts (IRAs) could allow working individuals to invest money (before tax income) into a tax sheltered retirement account (IRA) up to $4000 annually until the age of 50. After that they were allowed to contribute $5,000 per year until the age of retirement or 70 1/2, whichever came first. None of the money invested in the IRA was taxed before being placed in the account and would continue earning interest until it is withdrawn.

Roth IRA
Almost a decade and a half later Roth IRAs (sponsored by William Roth of Delaware) came into being in which contributions could be made after tax. The same maximum amounts and age limitations were in effect as in traditional IRAs but the main difference was in how they were taxed. Since they are taxed before the money is placed in their IRAs it will not be taxed again either while it stays on account or when it is withdrawn.

What Contributions Can Be Made to an IRA?
The usual type of investment placed in an IRA is in the form of bonds, mutual funds and stocks. In fact, with a few exceptions, even real estate can be used as an IRA investment. However, in recent years precious metals have been used as tax sheltered IRA investments. Many consumers are now looking at what a Silver IRA is and exactly how they can invest in them.

Silver IRA Regulations
Historically, only Silver Eagles were eligible for a Silver IRA because the requirements state that silver must be 99.5% pure. Although 1997 legislation allowed other types of silver coins to be used as an IRA contribution, the choices are extremely limited. For example, the only other coin that meets that requirement is the Silver Maple. Unfortunately, Silver Eagles usually have a premium cost over bullion of at least $1.80. This was not well received by those who would like to use a silver IRA as an investment product. Now silver bullion is allowed which is why more and more investors are using Silver IRAs.

Silver IRA Custodians
Once a person decides to invest in a silver IRA it is imperative to find an IRA custodian to store the silver coins or bullion placed in an IRA account. While any broker, online or brick and mortar, can serve as a Silver IRA custodian, there are few who will allow investors to store coins or bullion with them. When looking for an IRA broker make absolutely certain that they allow precious metals, silver in particular, to be stored with them in an IRA account. This is extremely important simply because there are so few who will store precious metals.

Precious metals are becoming increasingly sought after for IRA accounts simply because it is rare for the price of precious metals to be devalued. While stocks, bonds and mutual funds may gain in value to some extent, precious metals historically tend to continue increasing in value over time. Of course there are those who prefer gold to silver, but silver IRAs are becoming quite popular due to the projections being made that silver is set to increase in value more rapidly than gold.

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