When it comes to gold and silver buyers, there are two types: collectors and investors.
Investors purchase gold and silver in order to make gains on the rising values of precious metals. These investors have a variety of ways to invest; however, two of the best ways to invest in precious metals are with either a precious metals IRA or an allocated bullion account. Determining which precious metals investment strategy is best for you depends on several factors, including your financial goals, expectations and objectives. Asking yourself the right questions is the best way to determine which option is best for you.
To see the best comparison of precious metals IRA vs. allocated bullion accounts, explore the advantages of both in the paragraphs below.
Pros of a Precious Metals IRA
With a precious metals IRA, the goal is long-term stability. Essentially, a precious metals IRA is a retirement account funded solely by precious metals, such as gold and silver. An investor deposits IRS-approved bullion or coins into their account in hopes that values will continue to rise. This is not a bad strategy considering how both gold and silver values have soared in the last 100 years.
Here’s what you can expect from a precious metals IRA:
- Self-Directed Account – This means that you are in control of choosing a trustee to manage your account and a depository to store your metal.
- Owning Physical Bullion & Coins – With a precious metals IRA, you can choose from a range of gold and silver bullion or coins from around the world that meet IRS standards of fineness.
- Long-term Security – A precious metals IRA acts as a hedge against inflation. This long-term investment is not only profitable, but also secure because precious metal values are not tied to stock market performance.
- Tax Exemptions – With a precious metals IRA, investors are offered tax exemptions depending on the account. Traditional IRAs offer tax exemption at the time of gold or silver purchase. Those eligible for a Roth IRA will pay taxes on precious metal purchases now, but enjoy tax-free withdrawals from their account later in life.
Arguments for Allocated Bullion
Creating an allocated bullion account, on the other hand, allows investors the opportunity to buy and trade gold and silver without the headaches of self-storage or liquidity fees. Essentially, when you buy allocated bullion you buy physical bullion; however, that bullion is stored in a secure Brinks storage facility unless you withdraw your allocated funds. What you purchase is a portion of gold or silver bullion bar that is stored and managed by an allocated bullion vendor. The metal you purchase will be allocated to your name and you’re free to do what you want with it—buy, sell, trade, or cash out.
Here’s what to expect when investing in allocated bullion:
- Online Trading Platforms – Managing your account is easy with online trading platforms that put you in charge.
- Own Physical Bullion – Unlike unallocated bullion or gold ETFs, you own physical bullion. This means you are the owner of real gold and silver that you purchase, not just certificates and paper promises.
- Trading Flexibility – With an allocated bullion account, you’re free to trade gold and silver without having to go through physical transfers or liquidity. Investors can easily capitalize on short-term market trends or the gold-to-silver ratio.
- Low Rates & Fees – Because storage and trading is all done in house (no middleman), allocated bullion is often a cheaper means of trading gold and silver.
Precious Metals IRA or Allocated Bullion—What’s Best for You?
When deciding between a precious metals IRA or an allocated bullion account, you really need to determine your purposes for investing in precious metals. Are you interested in long or short-term gains? How involved do you want to be in managing your account? Are you interested in wealth security or growing your wealth? These questions can help you figure out which option is best for you.
