When it comes to saving money, a little know-how, some commitment, and practice all make the task easier as time goes on. Setting your child up with the opportunity to start saving money from a young age is an awesome way to ensure that they are prepared to make smart saving and investing decisions once they start working as an adult in the real world. Assigning paid tasks around the house and using jars as “bank accounts” for saving and spending is an effective foundation to start with. Here, you’ll learn tips, tricks, and techniques that can be implemented as your little one ages to accommodate their learning abilities and maximize their chance of saving success in the future.
Teaching Your Little one to Save Like a Pro
4 Questions And Answers About Precious Metals IRA Accounts
Claudia Bravo
In the United States, taxpayers have the option of saving for retirement with an individual retirement arrangement (IRA), which has tax advantages that other investment vehicles do not have. Two of the most common types of IRAs are traditional IRAs and Roth IRAs. The main difference between the two is how they affect an investor's tax situation. Contributions to a traditional IRA can be deducted on the taxpayer's annual tax return, while contributions to a Roth IRA cannot; however, Roth accounts are funded with income that has already been taxed, so there is no tax due on distributions from a Roth IRA. Although both types of accounts have helped many people save for retirement, industry experts are concerned that the volatility of the market could hurt investors. Due to these concerns, it may be helpful to open a precious metals IRA instead. Here are the answers to four common questions about this type of IRA.
1. What is a precious metals IRA?
Like the traditional IRA and the Roth IRA, a precious metals IRA is a type of retirement account. The key difference is that a precious metals IRA holds silver, gold, and other precious metals instead of stocks and bonds. To qualify as a precious metals IRA, the account can only hold four types of physical assets. Gold, palladium, silver, and platinum have all been approved by the Internal Revenue Service (IRS) to be included in this type of individual retirement arrangement. The Internal Revenue Code specifically prohibits IRAs from holding other types of metals.
2. Why would someone want to invest in precious metals rather than stocks and bonds?
Opening a precious metals IRA is a good way to diversify your investment portfolio. Diversification is important because it reduces your overall investment risk, which protects you against market downturns. If you only invested in one stock and the value of the stock dropped by 50%, the total value of your investment portfolio would decline significantly. In contrast, a portfolio with many investments would not lose much of its value, as the growth of other investments would offset the loss of the stock's value. Gold IRA portfolios can also protect you against the effects of inflation, which is a loss of value that occurs when prices rise. The price of gold tends to rise as stock prices decrease, which could help you maintain the value of your portfolio.
3. Can I store my precious metals in a safe-deposit box?
No. To be included in a precious metals IRA, gold, silver, and other metals must be held by a bank or a trustee that has been approved by the IRS. You cannot store the metals in your bank safe-deposit box or anywhere in your home.
4. Does any type of gold, silver, palladium, or platinum qualify for inclusion in a precious metals IRA?
No. Your precious metals IRA can only contain certain forms of metal or bullion, as the IRS has strict standards for this type of retirement account. If you want to buy gold bars, the bars have to be made by an approved refinery, or they cannot be included in your gold IRA portfolio. Certain gold coins, including coins released by the governments of Canada and China, are also allowed. The IRS has similar requirements for silver, palladium, and platinum, as you must buy bars from an approved refinery. Only select silver, platinum, and palladium coins are approved for inclusion in a precious metals IRA.
It is important to invest for retirement to ensure that you have enough money to pay your living expenses after you stop working. If you are interested in diversifying your portfolio and think precious metals could help you reach your investment goals, reach out to one of the gold IRA portfolio services in your area to discuss your investment options.
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