Gold IRAs vs. the Contrarian Argument
RevDrBlimber
Posts: 391
There was this article against putting gold into IRAs last weekend at Lew Rockwell: http://lewrockwell.com/north/north1135.html
"6. GOLD IN AN IRA
"You have written that anyone investing in gold should begin by purchasing bullion gold coins, preferably American eagle coins.
"This is very difficult to do in an IRA, as you know. A person must set up an independently managed IRA. He must then find a firm that will take responsibility for overseeing the investments. Most trustee firms do not have ways of monitoring the whereabouts of gold coins.
"I think that gold is overpriced today, just as I did when it was $257 an ounce. I told those few clients who were interested in buying gold in 2001 that gold is a volatile investment that does not belong in any retirement account, or any account at all. I still believe this.
"A person's IRA trustee can buy gold mining stocks. He can also buy ETFs, although they own no gold, but merely own unsecured promises from third parties to pay paper money equal to the price of gold. That is as good as gold in my book.
"The fact that it is difficult to buy gold for an IRA is one of the great advantages of owning an IRA. The IRA benefits from the good judgment of asset managers who have graduated from accredited universities, accredited business schools, and especially accredited law schools. These people are familiar with basic economics, especially the economics taught in Ben Bernanke's textbook".
With all the bullion dealers offering IRA qualified products, is it a good idea or not to have gold in an IRA?
"6. GOLD IN AN IRA
"You have written that anyone investing in gold should begin by purchasing bullion gold coins, preferably American eagle coins.
"This is very difficult to do in an IRA, as you know. A person must set up an independently managed IRA. He must then find a firm that will take responsibility for overseeing the investments. Most trustee firms do not have ways of monitoring the whereabouts of gold coins.
"I think that gold is overpriced today, just as I did when it was $257 an ounce. I told those few clients who were interested in buying gold in 2001 that gold is a volatile investment that does not belong in any retirement account, or any account at all. I still believe this.
"A person's IRA trustee can buy gold mining stocks. He can also buy ETFs, although they own no gold, but merely own unsecured promises from third parties to pay paper money equal to the price of gold. That is as good as gold in my book.
"The fact that it is difficult to buy gold for an IRA is one of the great advantages of owning an IRA. The IRA benefits from the good judgment of asset managers who have graduated from accredited universities, accredited business schools, and especially accredited law schools. These people are familiar with basic economics, especially the economics taught in Ben Bernanke's textbook".
With all the bullion dealers offering IRA qualified products, is it a good idea or not to have gold in an IRA?
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Comments
If it can't be securitized and sold by the money establishment at a commission, it's no good to them. Gold held outside an IRA is anathema to them.
Why does the government require gold (or anything else, for that matter) held in an IRA to be held by a third party? Simply put, to be able to keep it visible in order to be able to tax it later.
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
This statement is BS in so many ways. Set up a self-directed IRA (look it up); mine is in CO. Send them money from an existing IRA (either Roth or traditional). Set up an account with the Holding Co. (a vault); mine is in DE. Contact a bullion dealer (mine was Provident) buy stuff you want that is IRA approved. The dealer is paid from the IRA and ships to the Holding Co. Done. Could not be simpler.
I turned 59 yesterday. On November 8th I'll be able to tell you how easy it was to dissolve the IRA and take possession of the gold.
–John Adams, 1826
<< <i>
I turned 59 yesterday. On November 8th I'll be able to tell you how easy it was to dissolve the IRA and take possession of the gold. >>
Do let us know. I thought this was supposed to be some big PITA if I remember reading correctly over the past couple years. If not, great.
<< <i>I don't know why anyone would put metals in an IRA, although moving some assets within an IRA/401k to paper metals might be all right. >>
what? You don't like the idea of sharing knowledge of the existence of your PM stash with the federal government? For the life of me I can't understand why
<< <i>I turned 59 yesterday. On November 8th I'll be able to tell you how easy it was to dissolve the IRA and take possession of the gold. >>
and what options does a 25 year old have if the bull run reverses and how long does it take to liquidate (if even possible without penalty)?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
–John Adams, 1826
<< <i>Hold hard metal, privately, and keep quiet. Cheers, RickO >>
This.
<< <i>"I think that gold is overpriced today, just as I did when it was $257 an ounce. I told those few clients who were interested in buying gold in 2001 that gold is a volatile investment that does not belong in any retirement account, or any account at all. I still believe this" Is this guy for real? Gold has gone up 6 fold in 10 years and he still denies it was a good investment? What a fool!
To be fair to Dr. North, I think he was quoting an establishment accountant.
Also there was this commentary on his piece at a pro-government site:
http://www.quatloos.com/Q-Forum/viewtopic.php?f=12&t=8389
<< <i>"The fact that it is difficult to buy gold for an IRA is one of the great advantages of owning an IRA. The IRA benefits from the good judgment of asset managers who have graduated from accredited universities, accredited business schools, and especially accredited law schools. These people are familiar with basic economics, especially the economics taught in Ben Bernanke's textbook".
This statement is BS in so many ways. Set up a self-directed IRA (look it up); mine is in CO. Send them money from an existing IRA (either Roth or traditional). Set up an account with the Holding Co. (a vault); mine is in DE. Contact a bullion dealer (mine was Provident) buy stuff you want that is IRA approved. The dealer is paid from the IRA and ships to the Holding Co. Done. Could not be simpler.
I turned 59 yesterday. On November 8th I'll be able to tell you how easy it was to dissolve the IRA and take possession of the gold. >>
Depending on how large that IRA is, you could be looking at a big tax hit. It will all be considered earned income for that year. What about taking it over a couple of years?
ed for sp.
Nobody said it was easy. Somebody said it was hard.
I don't believe nobody, I believe somebody.
Withdrawing from an IRA makes the most sense if you expect tax rates to increase before you retire and/or you can withdraw a big enough chunk without kicking yourself into the next higher tax bracket.
The gains from IRA withdrawals are added to your current income for the year. So even if you have retired you still have to file a tax return, and your tax rate is determined by your income level. The scheduled tax increases start in 2013, so this is the last tax year you can withdraw at the old rates.
I don't think they've even issued the changes in the tax rates as a result of obamacare and the other new laws yet. The way congress works, they might drag their heels into 2014 and then make the changes retroactively for 2013.
Nobody knows where the tax increases will fall yet. And they wonder why businesses won't invest or expand.
I knew it would happen.
<< <i>
<< <i>I turned 59 yesterday. On November 8th I'll be able to tell you how easy it was to dissolve the IRA and take possession of the gold. >>
and what options does a 25 year old have if the bull run reverses and how long does it take to liquidate (if even possible without penalty)? >>
As I'm sure you are aware (and probably the reason you posted the above), the 25 year old wouldn't be able to take possession of the gold/liquidate without paying a penalty. They would, though, be able to call someone (APMEX, whoever), agree on a sales price, and have whoever is holding the gold send it to the buyer. The check would need to be made out to the IRA and sent to the IRA Administrator.