IRA is an acronym for Individual Retirement Account. An Individual Retirement Account (or IRA) is a retirement plan account or in real basic terms, investment accumulation for retirement and which provides some specific tax advantages for retirement savings in the United States. In some other countries, such as Australia for example, it is called superannuation.
An IRA can consist of various investments including stocks, shares, bonds, securities and other vehicles. Once an IRA could only be funded with cash or cash equivalents. Attempting to transfer any other type of asset into the IRA was a prohibited transaction and disqualified the fund from its beneficial tax treatment.
However, GoldMoney.com have recently introduced an IRA facility specifically for their US customers so they can now hold gold & silver in their Individual Retirement Account
James Turk, founder and chairman of GoldMoney explained: "We know that our customers like the ease with which they can purchase and hold gold and silver at low cost, which we then store for them in secure, allocated storage. Now our customers in the US can take advantage of these features in their IRA."
More information on this is available at: goldmoney.com.
Nowadays, gold bars and some coins with a purity of 24 karat (0.995+ fineness) are allowed into an IRA. They must be hallmarked by a NYMEX- or COMEX-approved refiner/assayer. So one can, these days have a Gold IRA where gold is used as the investment in the IRA including gold coins and bars
Bars such as the one ounce, ten ounce, one kilo (32.15 ounces), 100 ounces, and 400 ounces are allowed. But only gold coins having a purity of 24 karat (0.9999 fineness) are allowed in an IRA, with the exception of the 22 karat US Gold Eagle. Other gold coins allowed are some from Australia, Austria and Canada. But the South African Krugerrand is not permitted to be included in an IRA as it is a 22 karat bullion coin.
So why should one have a gold IRA?
An IRA is a long term investment. This makes it ideal for an investment as stable as gold. Where as currency is volatile and fluctuates due to influences outside of peoples control and stock and shares, bonds and even securities suffer from the same vagaries, gold has demonstrated itself to be stable over the past 200 years or so in terms of its purchasing power. While the purchasing power of currency has diminished steadily over the years one ounce of gold will still purchase the same value as it did 50 years ago. This drop in the value of currency is demonstrated by how much more is needed to buy an ounce of gold than was required many years ago.
This is shown by the following.
One ounce of gold from 2000 to 2005 rose from 280 dollars to over 530 dollars an ounce. The US Consumer Price Index during that same time showed the US dollar purchasing value went from $10 dollars to $8.82. Which means that in 2000 it only required $8.82 to purchase what then required $10 to make the same purchase in 2005.
So while the value of gold was increasing the value of the US dollar was going down. It makes sense therefore to have gold in one's IRA rather than currency as the gap between them widens on a yearly basis.
50 years ago the price of gold was 20 dollars an ounce. Now it is between 600 and 700 dollars an ounce. It now takes about 600-700 dollars to purchase what could have been bought for 20 dollars 50 years ago. Yet the quantity of gold remains the same. One ounce.
It seems evident therefore, that a Gold IRA is likely to ensure that there is a safe and secure comfortable future down the track provided one invests in gold.
Some useful links.