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Question Regarding Self Directed IRA

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  • Sun, Jul 21, 2013 - 05:46pm

    #11

    silverinvestor

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    Metal may not be safe at depositories

I don't believe you metal is as safe as you think if you are storing it at delaware depository:

 I'll stop by the depository to check out our stack.  Everything is segregated and I'm welcome to make surprise visits

Here is my reasons/experience that metal may not be safe at a delaware depository:

1. Most custodians have agreements with depositories for low fees like entrust for $125/yr for coins.If you have $100k in metal at the depository, how can it be insured for the full amount at this price?I called around found out the delaware depositories is only insured for approximately 75% of the inventory with lloyds of london according to my source.   Also, I was told if the metal appreciates, the insurance doesn't follow the appreciation.  Depositories hold insurance on a fixed dollar amount, not on replacing the metal.

2. The delaware depository holds COMEX silver.  See:

http://www.roadtoroota.com/public/146.cfm

Looking at events like MF Global, the London Whale Trade, Cyprus bail-ins, etc, one can clearly see the rule of law is essentially gone protecting the average person.  In a global financial crises I don't believe one will be able to get their metal out of depositories.   Either the govt or the banks can raid them with impunity is my guess in a real crises.  The depositories are easy pickings for the govt.   Also what will happen in a crises when that metal in the COMEX depositories is found to be re-hypothecated many times over.  I don't think my metal will be first in line for delivery against JP Morgan with any crises.

3. If you hold silver, the USGS says silver is essentially extinct by 2020 (7 years) because the cost will be too high to mine.  Before this happens, because silver is essential metal in industry and defense (it is in computers and airplanes, etc), I believe the govt will takes steps to confiscate supplies for  "national security" reasons because they won't have a replacement for it.  They will probably just raid the easy pickings, the depositories, and write you a check in my opinion.

  • Sun, Jul 21, 2013 - 06:04pm

    #12

    silverinvestor

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    self directed ira and solo 401ks for precious metals

Regarding:

Sorry a little late to the discussion.  first off, I am in process of creating a self directed IRA.  i have an existing employer sponsored 401k which I will roll over to a US custodian who will in turn transfer funds into an LLC owned by the custodian but managed by me.  My primary motivation is to allow more flexibility in investments I chose – i.e among other things – PM’s.  that said I do not have strong financial background and mainly reading on my own

My advice is to exercise due diligence and research vendors that will set this up for you and also provide yearly updates for IRS changes for a small yearly fee and also help you file yearly IRS forms.  Don't try to set up the LLC on your own because if you get it wrong, the entire amount will be considered a distribution and incur penalties and early withdrawl fees.

Here are 3 I have talked to and can't find anything wrong with:

http://www.irafinancialgroup.com/ (both IRA LLC and Solo 401ks by tax attorneys)

http://www.mysolo401k.net/ (Solo 401k vendor only)

http://www.checkbookira.com/ (IRA LLC vendor only)

Again, I would suggest if you have a small business or hobby you set up a Solo 401k because it has much more advantages and lower cost than dealing with custodians and LLCs.

I wrote up questions in order of priority and called each vendor and each of them took the time to answer them thoughtfully.

Good luck.

 

 

 

 

  • Mon, Jul 22, 2013 - 03:01am

    #13
    robbie

    robbie

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    billding wrote:“In the case

[quote=billding]

 

 “In the case of gold and silver, since the metal will be owned by the LLC and not by the IRA custodian, you will be limited to American Eagles and Buffaloes. But you are free to buy them from any source that is not related to you, and you can store them in whatever way you think is best – in a safe deposit box, under the floorboards at home, or in the back of your refrigerator. And they don't need to stay or even be purchased in the US.” I 

[/quote]

 

If you choose to hold gold or silver coins within an LLC or solo 401k you are not limited to American Eagles and Buffaloes. Canadian gold and silver Maples among others are also acceptable. Remember, all that matters is the number of ounces. Why pay a premium for US Gold and Silver Eagles? Also, if you decide to move to Canada, US coins will be taxed whereas Maples will not.

http://www.broadfinancial.com/gold-precious-metals

I agree with your sentiments on vaulting. While there are absolutely valid reasons to vault, it is expensive and questionably accessible and/ or secure in a crisis. Some local bank managers also tend to talk about what's in their safety deposit boxes. The most trusted individuals I've spoken with on my educational journey all seem to agree on one point when it comes to metal: If you can't hold it, you don't own it. 

Lastly, if you have your own business, the solo 401K is the way to go. It's cheaper and easier, both to set up and from a reporting standpoint. For less intrepid individuals that don't work for themselves, the IRA:LLC (Checkbook IRA) is probably the best and most flexible option. Pay to have a reputable lawyer set it up as previously discussed. Use a reputable bare bones custodian like IRA Trust Services ( iraservices.com) and save your money for coins. If you're reading this thread you're savvy enough enough to know there's an expensive and much less expensive way to setup these vehicles and manage them. The difference is simply a function of education.

  • Mon, Jul 22, 2013 - 09:39am

    #14
    SilverDad

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    Precious Metals coins at a discount

You can buy Gold and Silver eagle coins at a discount through spoteaglesdotcom.

  • Tue, Jul 23, 2013 - 09:16am

    #15
    SilverDad

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    IRAs and Silver Eagle coins

You are allowed to have Silver Eagle coins in your IRA portfolio. 

If you are interested in buying Silver Eagle coins, you can get a limited amount at spot with spoteaglesdotcom.

  • Thu, Nov 07, 2013 - 09:45pm

    #16
    Manicorp

    Manicorp

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    The difference between Self Directed IRA vs. Solo 401K?

Hi, I am interested in setting up some sort of self directed IRA or 401K to buy gold so I can hold on to them instead of keeping it in the custodian vault…  I was leaning toward a company I found and their name is Checkbook IRA.  However, I did not know that you can do the same with 401K…

My understanding is that once you contribute to an LLC to purchase gold, then you can't continue to contribute to the LLC.  Is that correct?  Will solo 401K allow me to keep on aking contribution?

Can someone please enlighten me on the difference between Solo 401K and SD LLC?

Thanks in advance..

 

  • Thu, Nov 07, 2013 - 10:48pm

    #17

    SailAway

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    Re: The difference between Self Directed IRA vs. Solo 401K?

Manicorp,

You should find most of your answers on this site:

http://www.pgiselfdirected.com/

An IRA requires a custodian, a 401K doesn't. So you don't need to setup a LLC to have full control of your money in the case of a 401K.

There is a FAQ and a number of videos if you follow the link above.

Hope this help!

Fred

 

 

  • Wed, Dec 03, 2014 - 11:03am

    #18
    jeekqing

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    t is different with an

t is different with an individual 401(k). In that situation the account holder, as trustee of the individual 401(k) plan, could be in physical possession of the metals. However with an IRA that is not the case. Many providers pitch the idea of using an LLC to alleviate this issue however the rules that apply to the IRA will apply to the LLC that the IRA is the sole member of… so you are left with the same issue.

 

 

we like  fifa 15 coins without reason

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  • Sat, Feb 07, 2015 - 07:51pm

    #19
    Tom From RI

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    More questions on self-directed PM IRAs and the LLC option

Hi All,

I've been reading on this topic for awhile now, and have to admit my head is spinning a bit. wink

I have looked into two companies actively advertising the option for an individual to roll their IRA into a self directed LLC setup which allows you to then take physical possession of the IRS approved metals you buy.

One is Augusta Home Storage Gold IRA, and the other is Kingdom Trust.

For KT as an example, they state they have $5B in assets under management with 50K+ clients.

Their process is you pay $1200 for the initial LLC trust setup, then $88/year maintenance fee.

You can then rollover your IRA, buy IRS approved coins and take physical delivery.

Couple of questions:

1) Has anyone successfully done this yet, and it yes which firm out there did you use?

2) Do you have to roll over your entire IRA, or can you do a portion of it (i.e. not all eggs in one basket?)

Thanks in advance for your insights,

Tom

  • Fri, May 29, 2015 - 09:06pm

    #20
    nick123

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    self-directed IRA

It appears that there have been many different answers. It can be difficult to know all of the rules when regarding self-directed IRAs. One of the best things to do is to make sure you can talk to a professional that can guide you in the right direction regarding self-directed IRAs. With all of the rules and ins and outs of IRA and 401k investing you'll want to make sure that you do your best to follow the rules so that you do not disqualify your retirement account. Hopefully you get the most accurate information because if you don't it could spell disaster for your self-directed IRA.

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