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Setting up an IRA With Silver

By Ace Winget

Individual Retirement Accounts (IRAs) were put into place in 1974 to allow more Americans the opportunity to save money for retirement in a tax sheltered account. The limits allowed have risen so that individuals can now invest up to $5000 per year, or $6000 per year if over age 50. Most IRA investors buy stocks, bonds or mutual funds with their IRA money, but precious metals are also allowed.

Traditional IRAs let you invest pre-tax money. For every $1 you invest in your IRA you get a $1 tax deduction. Your IRA grows tax free, but when you take the money out of the account, you have to pay the taxes at that time as if income.

Roth IRAs (begun in 1988 by Senator Roth), use after-tax money to invest. This means you’ve already paid the taxes on the money in your account, so you don’t get to claim it as a tax deduction. The good news is that any interest can grow tax free, and when you take the money out to use it, it remains tax-free.

Because IRAs are controlled by laws, there are rules about what kinds of investments you can put into your IRA. Stocks, bonds, mutual funds and real estate are all allowed. When it came to putting precious metals in your IRA, it used to be that only Gold Eagles or Silver Eagles were allowed.

Since Silver Eagles carried a premium of about $1.80 per ounce over the price of silver bullion, this was a disadvantage to silver IRA investors. In 1997, Congress passed another law changing which precious metals could be used in an IRA, allowing the use of bullion.

The premium on Silver Eagles was a lot higher than that of the Gold Eagle. Silver investors received a great boon with the allowance of silver bullion in IRAs. Other coins are also allowed, but they must be 99.5% pure. Silver coins made before 1965 are only 90% pure and are considered a collectible, so they can’t be used.

It is also possible to invest in gold or silver mining stocks. These carry their own unique set of advantages and disadvantages. As an investment hedge against inflation and calamity, bullion is the better option.

Another way of setting up a Silver IRA without buying the actual bullion is by purchasing silver exchange-traded-funds (ETFs). The problem with this is that there is the potential for disconnect between the ETFs and the assets by which they are backed. The most reliable hedge has always been investing in precious metals such as having a gold or silver IRA.

NAFEP (The National Association of Financial and Estate Planning) wants to put you in control of your finances with the following: self directed IRA and self directed 401k products, administrative and custodial services.

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Article Citation
MLA Style Citation:
Winget, Ace "Setting up an IRA With Silver." Setting up an IRA With Silver. 18 Jan. 2011. 8 Aug 2014 <>.

APA Style Citation:
Winget, A (2011, January 18). Setting up an IRA With Silver. Retrieved August 8, 2014, from

Chicago Style Citation:
Winget, Ace "Setting up an IRA With Silver"

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