Precious Metals 101
Gold & Silver IRA
The IRA, or individual retirement account, is the cornerstone of most people’s retirement plans. This investment incentive allows a taxpayer to spend up to a certain amount of their wages. You are entitled to pay up to $5,500-$6,500/year depending on your salary, tax filing status, and other factors.
These donations are tax-deductible under the standard IRA. However, all contributions can be made on a tax-deferred basis before retirement and withdrawal.
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2 WAY TO FUND YOUR IRA
Funds may be withdrawn from one retirement account and contributed to another IRA within 60 days of the initial withdrawal. The transaction is 100% tax-free and penalty-free. Funds are sent directly from the old retirement plan to the individual account holder and are responsible for contributing them to their current IRA within 60 days in order to stop paying taxes. This is the most widely used approach for workers with employer-sponsored retirement plans (401k, 403b, 457b). Typically, this can only be achieved. Usually, this can only be accomplished once a year per account.
2. Trustee to Trustee (Direct Transfer)
The individual account holder shall direct the transfer of money from their current IRA trustee to a new IRA account. Money transfers from one company (trustee) to another company (trustee) without the account manager needing to collect the funds at any time. This form of transfer is 100% tax-free, IRS-free and has no limits on how many transfers are possible.
Transfers or rollovers must be made from like plan” to like plan.” Pre-tax accounts are transferred to pre-tax accounts (Traditional and SEP accounts are comparable since they are both pre-tax) and post-tax accounts are transferred to post-tax accounts (only transfer Roth account into Roth account).
Withdrawing Money from an IRA
1. Withdrawing at Any Time
Money can be withdrawn from the IRA at any time – however if a withdrawal is made before the age of 59 1⁄2 years, a 10% federal penalty applies.
2. Indirect Rollovers
Direct rollovers are tax-free, penalty-free withdrawals if done within 60 days.
Types of Individual Retirement Accounts
The conventional IRA allows individual investors to contribute pre-tax income to assets that can accumulate tax-deferred (no capital gains/dividend income is taxed). The owner of the account can contribute up to $5,500-$6,500 depending on the age of the taxpayer, salary, tax filing status, and other factors. Contributions are tax-deductible. Money is charged on withdrawal. The account owner will withdraw funds at any time – but if you are less than 59 1⁄2 years of age, a federal penalty may apply.
A Roth IRA helps the account owner to add post-tax profits to assets that expand on a tax-deferred basis. The owner of the account can contribute up to $5,500-$6,500 depending on the income of the taxpayer, the status of the tax filing, and other factors. Contributions are NOT tax-deductible. Since PRIOR is taxed on money to be contributed to the Roth account, it will NOT be taxed on withdrawal. Roth IRA is absolutely free from withdrawal penalties, as long as the account owner is over 59 1⁄2 years of age. If the funds are withdrawn before they hit the age of 59 1⁄2 and the Roth account is less than 5 years old, the federal penalty applies.
Simplified Employee Pension (SEP)
A Simplified Employee Pension Plan (SEP) is a retirement plan that an employer or a self-employed person can set up for themselves and their workers. Contributions are tax-deductible – somewhat similar in nature to the conventional IRA. The person setting up the plan must be the owner of the business/president/CEO/self-employed. SEP IRA’s may be converted or transferred to the Conventional IRA or the new SEP IRA. You may pay up to 25% of your income to the SEP IRA, up to $55,000 per year.
A Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)
The Savings Incentive Match Plan for Small Employees is a retirement plan that can be developed by employers or self-employed individuals. Contributions are tax-deductible. These accounts can only be converted to Conventional IRA’s or SIMPLE IRA’s after they have been maintained for at least 2 years. If the account is less than 2 years old, it cannot be transferred.
A 401k is an employer-sponsored retirement plan for a “profit” corporation. 401(k)s are the most common form of the defined retirement savings plan. These plans will usually only be rolled over if the user is over 59 1⁄2 years of age or is separated from the service (no longer working for the employer).
A 403b is an employer-sponsored retirement scheme for a non-profit organization. A 403b will usually only be rolled over if the person is over 59 1⁄2 years of age or is removed from the service (no longer working for the employer)
If you are an employee of a city, state, township, park board, water district or similar agency, your employer can offer a tax-exempt savings benefit known as Government 457(b) Deferred Compensation Plan. This retirement package allows employers to make pre-tax compensation deferrals. The benefit of the 457(b) scheme is that it is not subject to the IRS age 59 1⁄2 law and that there is no 10% penalty for withdrawing your funds before that age, even if the withdrawal is subject to ordinary income taxes.
Tax-Sheltered Annuity (TSA)
Commonly known in many 403b programs, tax-sheltered annuities allow an employee to make contributions from his or her salary to the retirement plan. Contributions are excluded from the wages of the employee and as a result, contributions and associated benefits are not charged until the employee withdraws them from the scheme. As the employer may still make direct contributions to the account, the employee benefits from the addition of tax-free funds.
AThrift Savings Plan (TSP)
The Thrift Savings Plan (TSP) is a retirement plan for employees of the federal government. Workers are either “civilian” or “uniform.” Employees must be either 59 1⁄2 years of age and/or removed from the federal government in order to repay funds. TSPs have their own set of types to be used for every rollover.
There are two secure, tax-free, and penalty-free methods used to transfer money between retirement accounts: a direct transfer from trustee-to-trustee and a 60-day rollover option. Again the Huntington Metals has an entire IRA-dedicated department to manage the information for you.
The trustee-to-trustee process transfers your retirement money (either partial or full) from your current IRA provider directly into the hands of your new Precious Metals IRA provider.
IRA Account Rollover
Your existing IRA account provider sends a check to your home address; you can simply send the check directly to your new Precious Metals IRA provider. As long as this check is given to the new IRA custodian and deposited with 60 days in your new IRA account, no taxes or penalties will be incurred.
We know that the rollover process can seem complicated, so we encourage our clients to let us do the heavy lifting! With your permission, Huntington Metals will decide which approach works best for your portfolio and will manage the whole process on your behalf, fill out the paperwork, or make any required phone calls. Huntington’s IRA Department has processed many of these types of transactions, and you can rest assured that our IRA Department can guide you step-by-step through the entire process.
FOUR EASY STEPS TO GET STARTED – Don't worry – We Are With You Step-by-Step
Precious Metals IRA Depository Storage
IRA Depositary Storage for Precious Metals provides customers with ultimate protection.
The protection and security of your IRA precious metals are extremely significant. As such, clients have the option of working with several private, non-government, non-bank storage facilities with a variety of depository locations throughout the United States. Any Huntington client can have their IRA metals stored with either Brinks Global Services U.S.A. or Delaware Depository. Both depositories are IRS-approved and bear “all-risk” insurance policies from Lloyds of London.
Both depositories have locations in jurisdictions with no sales tax on the purchase, management, or storage of precious metals.
• Brink Global Services (www.brinksglobal.com) or
• Delaware Depositary Service Firm (www.delawaredepository.com)
You are not allowed to keep the Precious Metals yourself when you are in the IRA.
It's Time to Take a Distribution!
Investments within IRAs are charged on the distribution as ordinary profits. The same assets kept outside Eligible Plans are taxed as capital gains, which can be considerably lower than income tax for most investors.
When your IRA is invested in the stock market and the time comes to take the necessary distribution (RMD), your distribution is given to you in dollars. Given that the purchasing power of the US dollar continues to decrease with each passing year, what will be the value of those dollars in 10 years?
This is where the IRA, backed by precious metals, begins to shine.
Precious metals are the only properties you can own in an IRA that do not need liquidation or selling prior to delivery. Unlike every other investment in your IRA (which needs to be liquidated before distribution), metals give you a choice: they can be liquidated within the IRA, or they can be taken out of the plan in their physical form (and distributed directly to you as “in-kind” distributions.
Taking physical possession of your metals can be a great opportunity. Taking delivery of your assets allows you to maintain the gold or silver, even after taking your distribution. This allows for the investment to continue to grow and protect your wealth until you decide to liquidate your assets. Your metals are now held outside of your IRA and will have a different tax implication than inside the plan, should you decide to liquidate. Should you decide never to liquidate your metals, and pass them on to your beneficiaries, they would be inherited on a “stepped-up” basis. This allows for all the gains on the metals, once outside the plan to be realized when inherited.
IRA Approved Metals
American Gold Eagle coins, American Gold Eagle Proof coins, Canadian Gold Maple Leaf coins, Canadian Wildlife Series Coins, Austrian Philharmonic coins, Australian Kangaroo/Nugget coins, Chinese Gold Panda coins, American Gold Buffalo coins, Gold Bars of various sizes, Australian Perth Mint coins
American Silver Eagle coins, American Silver Eagle Proof coins, Canadian Silver Maple Leaf coins, Canadian Wildlife Series Coins, Austrian Silver Philharmonic coins, Australian Silver Kookaburra coins, Chinese Silver Panda coins, Mexican Libertad coins, Silver Bars of various sizes, Australian Perth Mint coins
American Platinum Eagle coins, American Platinum Eagle Proof coins, Canadian Platinum Maple Leaf coin, Isle of Man Noble coin, Australian Platinum Koala coin, Platinum bars, Canadian Palladium Maple Leaf coins and Palladium bars, Australian Perth Mint coins
Your Huntington Precious Metals Expert is going to make all the RMD and distribution plans for you. Your Expert can either liquidate your metals for you in order to collect a payment, or you can have your metals delivered directly to you. If you want to liquidate your metals, your distribution will be wired to your bank account, or a check may be mailed to you. Liquidations and distributions typically take up to one business day to process.
There are no taxes or penalties for moving your savings portfolio to the SDIRA. Your Huntington Metals Expert will work with you and your custodian to ensure that all appropriate protocols are followed during the rollover/transfer process. We will make sure that you do not pay any tax or charge for the transfer process.
You can only transfer IRAs or other eligible retirement accounts to the SDIRA. Qualified retirement plans include Roth, SEP, or SIMPLE IRA, 401k, 403b, 457b, Pension Plan, or Thrift Savings Accounts. For more information please visit our IRA Information page.
Your latest SDIRA has a flat rate. There are no percentages or costs in excess of $175 per year for accounts of less than $100,000 and $225 per year for accounts of more than $100,000. Both charges for holding your account are tax-deductible and there are no extra charges for getting IRA precious metals.
Once you have decided the metals you would like to have in your SDIRA, Huntington Metals will ship your metals to either the Delaware Depository (DDSC) in Wilmington, Delaware or the Brinks Depository in Salt Lake City, Utah, through the insured carrier. Both DDSC and Brinks Depository are insured by Lloyds of London, one of the largest and most respected insurance companies in the world. Your metals are fully protected if anything happens to them while in either shop. The insurance policy protects your properties from physical harm or damage caused by any cause, including the Acts of God (fire, flood, etc) (fire, flood, etc.).
The entire application process typically takes 10-15 minutes to complete. You should have access to your beneficiary documents as well as a copy of your driver’s license or state identification and a copy of the statement from your new retirement account. Your Huntington Precious Metals Expert can also complete your application by phone and send it to you to review and sign.
Your Huntington Metals Expert can open your new SDIRA within one business day of receipt of your completed application. The amount of time it takes to move funds from one retirement account to another varies depending on your current IRA custodian. Most custodians can move your money within 7-10 business days.
Your SDIRA custodian, Provident Trust, will grant you online access to your account. At your convenience, you can monitor the output of your precious metals. You’ll also get a quarterly statement from your new custodian. Both clients will have the option of having a monthly statement sent to them for an extra fee.
Any more Questions? We'd love to help!