Gold IRAs have gotten quite popular in recent times and more and more people are getting interested and even involved with them. If you are one of such persons, then we believe you have a lot of questions about this type of account and how it works.
Gold individual retirement accounts are self-directed retirement accounts where investors can invest or save towards their retirement with precious metals. What this means is that, with this type of IRA, you can hold physical metals such as gold, palladium, platinum, and silver
The first thing you need to know about gold IRAs is that you need to have a custodian for the account. Our guess is you have heard this and you want to know the reasons for it. Another question that most likely is on your mind is “what will this custodian do?”
Well, we believe you are familiar with traditional IRAs and you know that they also are handled by custodians. The only difference between traditional IRAs and gold IRAs is that the latter can hold precious metals while the former can’t. They are typically operated in the same way, which means they also have to be in the care of custodians.
However, because of the asset class held, they have additional duties than a custodian for a traditional IRA. Hence, below we will be discussing the duties of a gold individual retirement custodian and the reasons you need one.
Why A Custodian Is Required
You may be well versed in finances that you feel capable of taking care of your investments by yourself. However, you can’t boycott having a custodian because of the IRS regulation about it and this is with good reasons.
The following are some of the basic reasons you a custodian is needed:
- They have the expertise and experience needed to handle all the paperwork attached to keeping your account running.
- They will have a relationship with the storage your asset is in.
- They will take care of the administrative tasks involved with running your account. These administrative requirements are sometimes long and you may lack the time to handle them.
Custodians usually handle every aspect of your account. Hence, before you decide on one, you need to perform your due diligence. This may involve reading reviews about gold companies. A site like irainvesting.com reviews is a great place to start looking. When you properly check the custodian before you decide on them, the chances of being scammed will be greatly reduced.
Gold IRA Custodian – Duties
As we have said above, for you to have an IRA, a custodian for the account is required. Entities that work as custodians are financial establishments such as banks and trusts that have been approved by the IRS.
Generally, they will handle both your account and the assets that you have in it. What this means is that they will be the ones handling the transactions that go on in the account. Furthermore, they have administrative duties such as IRS reporting.
However, because the assets in gold IRAs are unconventional, custodians for these accounts usually have additional duties other than what has been mentioned so far. As we all know, precious metals are very valuable and have to be kept safely to avoid theft.
Additionally, the IRS doesn’t allow precious metals bought with IRA funds to be held by the investor. So, after the metals have been bought, it has to be stored in a depository approved by the IRS.
Therefore, their additional duty is to transport the precious metals to the depository and then handle the paperwork relating to the storage.
In summary, these custodians have traditional IRA custodian duties such as handling the accounts as well as the transactions it carries out and still have other duties involving the storage of the asset.
To have a gold retirement account, a custodian that will oversee the running of the account is required. They usually take care of the administrative aspects of the accounts just as custodians of traditional IRAs do. However, in addition to this, they oversee the storage of the assets in the account too.