Does Tradition Have You Settling for “Good Enough” in Your IRA?
This guest editorial is by J. Keith Johnson, Hard Assets Alliance Contributor
Do traditional retirement investments accomplish your goals or constrain them?
As tax season draws to a close, it’s a good time to reevaluate your retirement portfolio. Once we get into a routine regarding our finances, it’s easy for us to grow so comfortable with our approach that we miss developing opportunities.
Let’s face it, the world’s changing ever more rapidly. What was mainstream just a few short years ago quickly has become tradition. There’s nothing wrong with tradition, unless it constrains us to the past without realizing the potential of the present… or the future.
Breaking with Tradition
With today’s rapidly changing markets, when it comes to our retirement, we need to be constantly vigilant in assessing both our current positions and upcoming opportunities. Unfortunately for most of us, we’ve embraced a traditional perspective that limits our retirement diversification.
What are the common retirement investments? Generally, beyond pensions and Social(ist) Security, we tend to constrain our considerations to stocks, bonds, mutual funds, CDs, and other such instruments. However, the IRA lends itself to a host of other opportunities that savvy investors would do well to seriously consider.
As Safe as Money in the Bank?
Today’s headlines do nothing to promote confidence in the stability of national banks. In fact, “as safe as money in the bank” takes on a whole new meaning in light of recent events in Cyprus.
Since IRAs can be diversified into tangible assets, it would be much more difficult to implement such measures as we see happening in Cyprus against them. Don’t get me wrong: Nothing is completely immune from government intervention. However, the nature of the IRA readily lends itself to another layer of protection that traditional retirement investments do not enjoy. Some possibilities of IRA investment diversification include:
- Real estate
- Partnerships, limited partnerships, and LLCs
- Deeds of trusts and mortgages
- Secured and unsecured notes, and
- precious metals
The challenge for most of us is that we either don’t know how to manage most of these different investments or we don’t have the time. And who wants to be saddled with managing a business or carrying a note during retirement? There is one exception, however:
As you diversify your retirement in an effort to spread your exposure while maximizing profits, no doubt precious metals are on your radar.
Because of the challenges of holding bulk items such as precious metals, many IRA custodians fail to inform their customers that there are precious-metals options for IRA holding. As a result, a huge industry has grown under a sort of self-directed IRA subcategory called “Precious Metals IRAs.”
These companies, working in the Precious Metals IRA subcategory, focus on setting up private, nonbank storage facilities where the custodian of the IRA account is able to hold investors’ precious metals. Because the focus is to enable investors to add precious metals to their accounts, these IRAs seldom allow for anything other than precious metals. An obvious advantage here is the added diversity of using nonbank facilities.
So What Metals Can I Have in My IRA?
Surprisingly, the list of metals allowed in IRAs is rather long. Approved monetary metals must be legal tender with a purity of 0.995 or greater for gold, 0.999 for silver, and 0.995 for platinum and palladium. Permissible bullion includes:
- American Eagle group (the US Gold Eagle is an exception to the fineness limit)
- Australian Kangaroo
- Austrian Philharmonic group
- Canadian Maple Leaf group
- Bars and rounds manufactured by a NYMEX- or COMEX-approved assayer or government mint
In addition, there are specific acceptable coins in gold, silver, and platinum:
- Credit Suisse-Pamp bars
- Uncirculated US Buffalo gold coins (no proofs)
- Mexican Libertad coins
- Isle of Man Nobles
Traditional Is Time-Consuming
Setting up and funding a traditional precious-metals IRA is not something you can take care of in a matter of minutes. The application process involves filling out the right forms and submitting them to your custodian. This generally takes around two to three days.
Next, you have to start funding your account. Once funding is in place, you’ll need to find a dealer you want to work with and who can work with your custodian. After the dealer has verified with your custodian that you actually have the funds available to purchase the metals, the custodian still has to verify with you that you want to purchase the coins.
After several contacts between the dealer, custodian, and you, to verify that everyone is on board and all funds are available, the order is finally placed. The dealer then sends the order to a storage facility designated by the custodian. After receipt has been verified, the trust company releases the funds to the dealer and the metals are finally – after about two or three weeks – attributed to your account. Is it any wonder that many people are too overwhelmed by traditional precious-metals IRAs to bother?
Again, it’s time to think past tradition. And the Hard Assets Alliance has provided a major step into the future.
The SmartMetals IRA – Establishing a New Tradition
What if the above scenario was reduced to a couple of days? That’s what the Hard Assets Alliance has accomplished with its new SmartMetals™ IRA. In fact, the process has been so streamlined that it’s actually easier than most traditional IRA setups.
All you have to do to get started is fill out a simple online application. This should take you around ten minutes. Once your application is approved – usually within two business days – you will receive confirmation and instructions regarding funding and the use of your SmartMetals IRA.
Once you’ve funded your account, ordering is as simple as signing in to your account from your computer, choosing your metals, and clicking on your selection. It really is as simple as that. You can manage your account from any computer, any time you desire. In fact, if you hurry, you still have time to apply your SmartMetals IRA contribution to your 2012 tax filing.
Traditional retirement investments have served many people well. But as the times change, the wise investor changes with them. Old traditions can still serve us well, but adjusting some of them to meet the demands of our ever-changing world markets will serve you better both today and in your retirement. There’s no better time than the present to set a new tradition with your SmartMetals IRA.