Home U.S. Coin Forum

Coins and IRA's.....

TommyTypeTommyType Posts: 4,586 ✭✭✭✭✭
This might be a bit off topic and boring, but I'll give it a whirl anyway:

Since turning 40, (actually 41 now), I figured it was time to act like a big boy, and get my finances in order. In the process of learning about IRA's, mutual funds, and general investing, I got to thinking about the proposal I've heard in the past about allowing rare coin "investments" in IRA's.

How the heck would that work? It seems to me that the government rules go to great lengths to make sure you can't mix IRA funds with other funds, and can't get your paws on the IRA funds before retirement without paying heavy penalties.

If you WERE able to place coins in an IRA, would you be required to lock them out of reach? Could you only sell under the watchful eye of some entity to make sure the funds and profits made it back into the IRA? It seems it would be way too easy to siphon off profits, or "over invest" without that oversight. And if you did have that oversight, the associated management fees would probably eat into your profit potential anyway.

Has anyone been involved deeply enough in the topic to explain the proposed workings?
Easily distracted Type Collector

Comments

  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭
    If you were to start a self-directed IRA and purchase coins [if this is allowed] with the $$$ I believe that you would probably have to keep them in the custody of the party through which you have the IRA, so in your case that would likely be your local bank. Or at least that should probably be your local bank.
    theknowitalltroll;
  • lavalava Posts: 3,286 ✭✭✭
    I like the idea of investing in coins, but I think an IRA is the inappropriate vehicle.
    I brake for ear bars.
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    Why oh why would you want to take what is one of the last remaining confidential assets and put them under government control and scrutiny?



    Tom
  • RBinTexRBinTex Posts: 4,328
    YOU keep control of the coins - NOT a 3rd party. You must file all kinds of info with the gov regarding all the purchases & sales though - much like a sched D.
  • Last I heard, it was only bullion coins that were allowed in IRAs. So SAE, GAE, and PAE could be put into an IRA account if you wanted to.
    I collect the elements on the periodic table, and some coins. I have a complete Roosevelt set, and am putting together a set of coins from 1880.
  • TommyTypeTommyType Posts: 4,586 ✭✭✭✭✭
    Thanks for the replies.

    And as I suspected, it just doesn't seem like a very good idea to me. Paperwork, tracking, (or storage fees), making a questionable investment to begin with even more expensive in time and money.

    Plus, it would be making a perfectly good hobby into WORK!

    Tom
    Easily distracted Type Collector
  • This question has popped up from time to time. I have had a chance to really think about it and firmly believe if it were ever allowed, it should only apply to bullion. It would be extremely difficult and risky to introduce the ever changing values of coins based on their quality and quantity and market interest. However, using only bullion could work as the bullion values would follow the going price of gold and silver. I continue to add there are mutual funds out their that are based on gold and silver, so why not just direct your IRA into that area.

    Good question.
  • I have a slightly different twist on this. Several years ago IBM gave me the boot after 16 years of service. Of course I lost my pension and decided to start taking my vested rights, paying the taxes on it and investing in a Roth IRA. It has mounded up very nicely. I'm now considering leaving that money alone and taking the vested rights monthly check and buying coins. I would still have my IRA which should grow, and have a coin investment as well. At some point I would probably start investing more in the IRA as well. Opinions?
    Frank

    E PLVRIBVS VNVM
  • After reading through this thread, now I'm pretty sure that you can't put 'investment' coins in an IRA. The whole reason being that the value of the coin is subjective. Perhaps if the coin was graded then the subjectiveness would be a bit less, but even then the 'value' of the coin is based on market demand and what one person says its condition is. Bullion coins like the silver, gold, and platinum eagles are able to be invested in an IRA because their bullion content will never change. It doesn't matter what condition the coin is in as long it has the bullion content. The value of the bullion content is also easily tracked and every single 1 ounce platinum coin contains the same amount of platinum. The is why the US Government allows them to be placed in an IRA. If they were to allow circulation coins in an IRA, they would probably only allow them based on the worth of their bullion. So a 1907 XF Double Eagle would have the same value in an IRA as a 1923 MS69 Double Eagle. While on the coin market the two values are vastly different, in terms of bullion it's the same.
    I collect the elements on the periodic table, and some coins. I have a complete Roosevelt set, and am putting together a set of coins from 1880.

Leave a Comment

BoldItalicStrikethroughOrdered listUnordered list
Emoji
Image
Align leftAlign centerAlign rightToggle HTML viewToggle full pageToggle lights
Drop image/file