What does ‘IRA-approved’ silver mean? When investors add metals to their IRA, they may not realize that certain products, like collectible coins, aren’t eligible.
As of this writing, silver is up 37% in 2024. If you’ve been following the trends and are interested in learning more about a precious metals IRA, this article covers everything you need to know about adding silver or other metals to your portfolio.
Read on to learn more about which coins and bars qualify and how you can get started today.
What is IRA-eligible silver?
If you plan to buy silver in your IRA account, you can’t just buy whatever you want. The IRS has rules about which metals qualify. The whole reason for these rules is to make sure your silver or gold coins keep their value independent of speculation like you sometimes see with collectible coins.
You can buy eligible silver in either of these forms:
Silver bullion coins
Coins can include domestic and certain foreign coins, including:
Canadian Silver Maple Leaf
Austrian Silver Philharmonic
Australian Silver Kangaroo
Mexican Silver Libertad
America the Beautiful Silver
Australian Kookaburra Silver
Chinese Silver Panda
British Silver Britannia (0.999 fineness only)
British Lunar Series Silver
South African Silver Krugerrand
Silver bullion bars
Qualifying bars include:
Royal Canadian Mint (RCM) silver (10 oz, 100 oz)
Johnson Matthey silver bars
Sunshine Mint silver bars
Engelhard silver bars
Nadir silver bars
PAMP Suisse silver bars
Valcambi bars
Credit Suisse silver bars
Heraeus silver bars
Metalor silver bars
Perth Mint silver bars
Asahi silver bars
Including silver in your IRA
Most experts recommend allocating about 5-15% of your retirement portfolio to gold and silver assets. The whole goal is to reduce your risk in any one type of asset class and give you the benefits of physical precious metals like:
Diversification and stability
Adding silver balances out more traditional assets like stocks and bonds. When markets are volatile or inflation rises, silver can act as a hedge, providing stability in uncertain times.
As Reddit user turd_furgeson82 says in the r/Silverbugs forum, “Silver will always hold its value. It’s the strength of the dollar that fluctuates, making it a great hedge against inflation.”
Lower taxes at retirement
If you have a traditional Silver IRA, your investments grow tax-deferred until you retire. Once you retire and start to take distributions, you may be in a lower tax bracket, so you’ll pay fewer taxes on your investment.
Tax-free withdrawals
If you have a Roth Silver IRA, you make contributions with after-tax dollars so you can withdraw the amount you originally contributed at any time, tax-free. Meanwhile, your return on investment grows tax-free, and you can pull those proceeds out once you reach retirement age.
Withdrawal from a Silver IRA
Before you reach retirement age, the gold or silver you have in your precious metals IRA must remain in an IRS-approved depository. You can’t store your metals at home. Then, when it’s time to withdraw from your silver IRA, you have a couple of options.
In-kind distributions: With an in-kind distribution, you can have the actual silver shipped directly to you.
Depository purchase: With this route, the depository holding your silver buys it from you. They’ll sell the silver at its current market value, and you’ll receive the equivalent dollar amount in cash.
Also, be aware that withdrawing your IRA-approved bullion coins or bars before you reach retirement age can lead to high taxes and penalties. Essentially, you’ll pay regular income taxes in your current tax bracket plus a 10% penalty.
Why invest in silver
Why do people invest in silver in the first place? Here’s the most common reasons:
Affordability
Many people start with silver investing because it’s more affordable than gold. As an example, right now, gold is about $2600/oz while silver is about $32.4/oz. So, you can buy 80 times more silver than gold.
Some investors use a strategy where they watch the gold-to-silver ratio. When the ratio is higher, they’ll buy silver because they think it’s undervalued. Then, when the ratio is low, they’ll trade to gold. The premise behind this strategy is to eventually hold more gold.
Potential higher returns
Silver is riskier than gold because less people own it and changes in prices can make a bigger impact. The downside is this increased risk but the upside is you can make higher returns than with gold because your investment moves the needle more.
No one knows for sure what will happen with the price of silver, but you can always check out our podcast for news and insights on gold, silver, and platinum:
Safe-haven asset
Just like gold, there’s only so much silver on the earth and governments can’t just make more like they can with paper money.
Industrial demand and supply dynamics
Silver has many industrial applications, with about half of all silver used in heavy industry and high technology. This industrial demand, along with constrained supply, could support higher silver prices over time.
Future demand from sectors like clean energy and electronics could further drive silver prices up in the future.
How to add silver into your IRA
Here’s how you can add silver to your IRA account:
1. Choose a precious metals dealer
Many investors start with choosing a reputable dealer like Swiss America who can provide guidance and support on how to set up a precious metal IRA.
2. Open a self-directed IRA
You’ll need to choose a custodian who specializes in precious metals. The role of the custodian is to manage IRA reporting and also buy and sell assets on your behalf. If you don’t already have a custodian in mind, we can recommend one for you.
3. Fund the account
Next, you’ll fund your account. You can move funds from an existing retirement account like a 401(k) or traditional IRA, or you can make a new contribution.
4. Buy IRA-approved silver
Once you fund your account, you can direct your custodian to buy IRS-approved silver, gold bullion, or other precious metals.
5. Store in an approved depository
Your custodian arranges for secure storage in an IRS-approved depository. Like we mentioned earlier, you can’t actually take possession of your precious metals until you reach retirement age because the IRS considers possession to be a distribution.
6. Manage your account
Even though metal assets are more hands-off than stocks, you can still check on your account’s status to see your holdings and current spot price. Swiss America customers have access to an online portal to see real-time account value, liquidation quotes and investment recommendations.
Choosing a Silver IRA company
When you’re ready to include silver in your investment strategy, here’s why thousands of investors choose Swiss America for their precious metal IRAs:
Experience
Since the early 1980s, we have successfully navigated multiple economic cycles, giving us the experience to help investors make smart decisions. Our long-standing presence in the industry makes us a reliable partner for your individual retirement account.
Satisfied clients
Our large base of happy clients appreciates the timely delivery of high-quality metals, responsive customer service, and consistently strong performance that often exceeds expectations.
Professional guidance
We provide expert advice on a variety of topics, including secure storage, portfolio diversification, and market trends, so that you have the information you need to make the right investment choices.
Transparent and fair pricing
Our pricing is competitive and clear, and you always know what you’re paying for when buying precious metals.
Silver in an IRA final thoughts
Adding silver and other precious metals to your portfolio gives you a way to diversify assets and reduce overall risk. Silver can be more volatile than gold bullion products, but if you take a long-term view, it’s a scarce resource that continues to see demand from various industries.
If you want to learn more about IRA-approved bullion, connect with our team today!
What does IRA-approved silver mean: FAQs
Is a silver IRA a good investment?
Yes, a silver IRA can be a good way to diversify your retirement savings by adding a layer of protection against economic uncertainty.
What is the difference between a Roth IRA and a silver IRA?
A Roth IRA vs Traditional IRA are two individual retirement account structures. Most of the time, these accounts hold assets like stocks and bonds. A silver IRA can also be Roth or Traditional and lets you invest in physical silver, gold bullion products or other metals.
What metals are IRA eligible?
You can invest in silver, gold, platinum, and palladium, but they have to meet purity standards. For gold it must be at least 99.5% pure. For silver, it needs to be 99.9%, and for platinum and palladium, the purity should be 99.95%.
Note: The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.
