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Are you frustrated by the stock market's ups and downs and looking for a more stable investment for your retirement? Imagine retiring with a nest egg made of solid gold or silver, immune to the whims of the stock market. Sounds ideal, doesn't it? With the allure of precious metals, IRAs are undeniable—promising stability and a hedge against inflation. But are they as foolproof as they seem? This episode of the Ask Ralph Podcast with Ralph Estep Jr. explores a controversial option that promises stability - precious metals IRAs. What are the Pros and Cons of Precious Metal IRAs? With Ralph Estep, Jr.
In Episode 187 of the Ask Ralph Podcast, host Ralph Estep Jr. will help you understand the pros and cons of precious metals IRAs. You'll learn how to evaluate if they're the right fit for your portfolio. We'll also expose the red flags that could indicate a potential scam. Are precious metal IRAs a haven or too good to be true? Whether you're considering diversifying your retirement portfolio or simply curious about alternative investments, this episode offers valuable insights to help you navigate the complex world of precious metal IRAs. Tune in to discover if these shiny investments are truly worth their weight in gold.
00:00 Episode Overview
00:48 Recap And Show Announcements
01:18 Bible Verse
02:13 What in the world is a precious metal IRA?
03:08 Pros of Precious Metal IRA
03:49 Cons of Precious Metal IRA
04:49 How do you actually invest in Precious Metal IRA?
05:51 How to avoid scams?
07:39 Episode Recap
08:12 Outro
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Ralph Estep Jr.:
Today, we're diving into a hot topic in the world of retirement investing and that's precious metal IRAs. If you watch any TV like me, you see these ads all the time. They actually kind of wear me out to be honest, but are they really all they're cracked up to be? Can they provide the financial freedom that we seek in our golden years? How do you even invest in them anyway? And are there scams to watch out for when you're exploring this option?
Ralph Estep Jr.:
I'm going to tackle all that and more right after this. Imagine retiring with a nest egg made of solid gold or solid silver. No more worries about stock market crashes, wiping out your savings. Your retirement funds will be rock solid quite literally. The allure is real, but is investing your IRA and precious metals, all glitter and no gold? Let's find out.
Ralph Estep Jr.:
Welcome to Ask Ralph Show, where we explore the intersection of personal finance and Christian values. I'm your host, Ralph, and you're listening to Financial Friday, our weekly deep dive into all things money. If you caught yesterday's taxes episode, you know strategies for handling taxes when you work in multiple states. We uncovered some real money saving gems. So make sure you join us tomorrow when we tackle how to pay off debts, which are already in collections. You don't want to miss that one.
Ralph Estep Jr.:
Let's open up our Bibles to Matthew 6:19-21, which says, "Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal." And this is the important part, "for where your treasure is, there will your heart be also." Jesus cautions us to be careful where we place our faith and our finances. Earthly wealth can fail us, but heavenly treasures are eternal.
Ralph Estep Jr.:
As we explore precious metal IRAs, we need to check our motivation. Is our heart set on earthly security and comfort or on serving God and storing up eternal rewards? The investments we make reflect our priorities. So let's dive in with wisdom, discernment, and an eye towards God's guidance in these matters.
Ralph Estep Jr.:
You might be wondering, "Ralph, what in the world is a precious metal IRA anyway? To be honest, IRA simply stands for an Individual Retirement Account. It's a type of investment account with tax advantages that helps you save for retirement. Normally, IRAs are investing in things like stocks and bonds and mutual funds, but a precious metal IRA flips the script. Instead of paper assets, your IRA owns physical gold or physical silver, maybe platinum or palladium coins and bars.
Ralph Estep Jr.:
The appeal is clear. Hard assets like gold, seem more real and more tangible than those fluctuating stocks in the market. Precious metals have intrinsic value, and they can provide a hedge against inflation. They provide a hedge against economic instability, and they hedge against ups and downs of the financial markets. In fact, gold prices often rise when stock prices fall. So adding some precious metals to your portfolio can really balance out risk.
Ralph Estep Jr.:
But Ralph, you might ask, are precious metal IRAs right for me? Well, let's weigh the pros and cons. On the plus side, gold and silver maintain their value over time. Their purchasing power doesn't get eaten away by inflation. And boy, we are certainly in a time of inflation now.
Ralph Estep Jr.:
When the stock market tanks, precious metals can soar, thereby protecting your nest egg. Their low correlation with paper assets provides portfolio diversification. These tangible assets, I mean, these are things you can hold in your hand, give peace of mind in uncertain economic climates. You can also physically possess your metals if you want. And they're generally seen as safe long-term stores of value.
Ralph Estep Jr.:
Of course, as with anything, there are some setbacks. This is a big one. These things are not going to pay dividends or interest like stocks and bonds. Metals just sit there and look pretty and collect dust to be honest with you. They have volatile prices which can drop precipitously due to market shifts. The price of gold could go down. The price of silver could go down and here's a big one. There are costs for storage, delivery and insurance, and that eats into your returns.
Ralph Estep Jr.:
And to be honest with you, this is a big one too, less liquidity if you need to access cash quickly, because selling isn't instant. You can't just say, well, let me sell these gold bars or this silver palladium that I have. There are also tax headaches if it's not structured properly. There are special IRS rules that apply to these circumstances. There's also the risk of theft, damage or loss of your physical metal holdings. So you've got to weigh these factors carefully for your situation. Many financial planners honestly recommend keeping precious metals to under 10% of your total portfolio.
Ralph Estep Jr.:
All right. Well, let's say you decide to move forward, "Ralph, how do you actually invest in IRA in shiny coins and bars?" The first thing you're going to do is you're going to need to have what's called a self-directed IRA account with a custodian who allows these alternative assets. These popular choices might include Equity Trust company, GoldStar Trust company, and Kingdom Trust.
Ralph Estep Jr.:
Once you do that, you decide whether to fund your account with retirement savings you already have or if you're going to put in new money. Maybe you're going to convert from existing IRA, or you're going to take new contributions just like with any other IRA. Now comes the fun part and that's time to go shopping for precious metals.
Ralph Estep Jr.:
You pick gold or silver, platinum, palladium, coins and bars from dealers that custodian partners with. Popular picks are American Eagle and Canadian maple leaf coins. The custodian then handles the transactions and make sure precious metals are stored according to the IRS rules at a specialized depository. You can choose whether you want to segregate your storage where your exact coins are separated, or you can pool storage, which is a lot less expensive.
Ralph Estep Jr.:
It's essential to work with a reputable dealer and a custodian because scams abound in the world of precious metal IRAs. And that's the truth. So you might ask, "Ralph, how do I avoid getting scammed?" The key is to avoid companies that do these things. Number 1, pressure you to take a big upfront position all at once. This is the time to go slow. Avoid those companies that tout exotic or collectible coins with high markups. Stick to bullion.
Ralph Estep Jr.:
You also want to avoid those who can't provide referrals or complaints against them. This is a place where you want to do your homework. You want to avoid the companies that have hidden or exorbitant storage and transaction fees. This is a place where you want to read the fine print. If you listen to me, you know I always say, read the fine print.
Ralph Estep Jr.:
You also want to avoid those that can't clearly explain the setup process, the rules, and the tax implications. This is a place where you need an expert to guide you. And finally avoid any companies that use high pressure sales tactics or guarantee unlikely returns. As with anything, if it seems too good to be true, well, it likely is.
Ralph Estep Jr.:
The bottom line is precious metals can have a place in your retirement portfolio when used judiciously, but the cost and complexities involved mean they aren't right for everybody. That's just the truth. They're not right for everybody. So, this is a place where you want to seek wise counsel, understand what you're investing in, and don't put all your eggs in one basket.
Ralph Estep Jr.:
If you approach this with eyes wide open, a small allocation of physical gold and silver can provide financial insurance against an uncertain future. And we're certainly living in those times. But avoid shady dealers peddling speculative metal IRA schemes with promises of massive returns. Don't pay attention to those commercials on TV for the most part. As in all things, exercise prayerful discernment.
Ralph Estep Jr.:
Well I know we covered a lot of ground today. To recap, precious metals IRAs allow your retirement account to invest directly in physical gold and silver, platinum and palladium. This offers portfolio diversification and could hedge against inflation. But the cost and volatility means proceed with caution. This is that yellow light. Work only with reputable custodians and dealers, understand the tax implications and keep your allocation conservative. And above all, if you don't listen to anything else I say, seek God's wisdom.
Ralph Estep Jr.:
Well, that wraps up for this edition of financial Friday. I encourage you to visit our website. That's at askralphpodcast.com to join our email list and you get a free copy of my book. That's it right here, Mastering Your Finances. That saves you 10 bucks over the Amazon price. Do me a favor and share this episode if you found it interesting. And as I always say, remember to stay financially savvy out there and keep your eyes on God. He will guide you in the path of wise investing if you let him. Well, thank you for listening and God bless you.
