Adding gold and silver to your IRA is an excellent idea, particularly in these times of economic uncertainties. It’s difficult to predict what could happen in the next few months, let alone the next few years or decades leading to your retirement. When you’re finally able to take an IRA distribution, you will want to be assured that your hard-earned retirement funds can provide you with a comfortable life in your golden years.

Gold and silver are proven investment safe havens. They have an intrinsic value that’s not affected by the factors that stocks, bonds and similar investments are vulnerable to. They also have a direct correlation with inflation, their values increasing along with any rise in the inflation rate.

Self-directed IRAs

Conventional IRAs offer mostly investments in paper assets like stocks and bonds. Physical gold, silver, and other precious metals may only be added to a Gold IRA, a self-directed IRA that gives you more investment options than conventional IRAs.

One of the rules covering Gold IRAs is that the precious metals you buy must be stored in an IRS-approved facility. The metals must also be purchased through your IRA custodian, who buys them from a precious metals dealer. You cannot buy the metals yourself, and you cannot have them in your possession, even for a short time. Violations of this rule can mean a premature distribution, resulting in a hefty fine and the assets getting taxed.

Home Storage IRA

For many people, owning gold and silver without actually having them in their possession is unsettling. Uncertainties, such as the custodian going bankrupt, or security breaches, can cause them to lose their investments. Additionally, these investors want the assurance that they can easily access their gold and silver assets if a major crisis does happen.

These fears have given rise to home storage IRA, an alternative that may allow investors to actually have their physical gold and silver assets in their possession without incurring penalties.

How does home storage IRA work?

Home storage IRA works under the framework of a checkbook IRA, which not only gives you more freedom to diversify your investments, but also eliminates or minimizes the need for a custodian’s functions.

It involves setting up an LLC, or a Limited Liability Company, under the specific rules within your community or municipality. Your IRA will then invest in your LLC, which then purchases your investments, including precious metals.

Your LLC can designate where to store your gold and silver assets, which can be anywhere from a nearby safety deposit box to a safe or vault in your own home. The LLC is considered a separate entity from you, so in essence, you are not in possession of your assets. Your LLC is.

Is home storage IRA legal?

Companies that offer home storage IRA services cite court-resolved cases that point to the legality of home storage IRA. As long as you comply with all pertinent rules on self-directed IRAs, then you have nothing to worry about.

With regard to storing precious metals at home, or outside IRS-approved facilities, however, home storage IRA services almost always offer the following caveat: the practice may be in violation of IRS rules, so it is best to consult with a lawyer before going down this road.