The Other Gold IRA
Posted By | May 17, 2016
When I write about Gold IRAs, most people assume I am limiting my remarks to the traditional variety, in which you take a tax-deduction on contributions and pay taxes on withdrawals. We like and sell these, but today I want to discuss the other Gold IRA, a Roth account.
A Gold Roth IRA certainly has its charms. Even though you fund it with post-tax money – you don’t get a tax deduction for contributions – the IRA grows tax free, and if you follow the rules, you avoid taxes and penalties on withdrawals. Those withdrawals can include your gold holdings – you don’t have to sell them first, but can distribute your gold coins right out of the account.
The two rules you have to be aware of with Roth IRAs are:
- Premature withdrawals of earnings before age 59 ½ are taxed and subject to a 10 percent penalty, although there are a number of exceptions to this penalty assessment.
- You must pay tax and penalties on any earnings you withdraw within the initial five years of first contributing to your Roth IRA. There are no exceptions for this.
Now, the nice thing about these rules is that they apply only to earnings. You can withdraw contributions at any time, without tax or penalty. Here’s another great feature: You never have to withdraw anything from your Roth IRA. As you probably know, a traditional IRA requires you to start taking minimum distributions at age 70 ½. The minimum distribution is equal to the account balance divided by the number of years the IRS believes you’ll continue to live. I don’t know about you, but I plan to live a lot longer than some Washington bureaucrat dictates, and that’s one reason I like the Roth IRA – I get to decide if and when I take out my money and gold.
You can set up a self-directed Roth Gold IRA -
Just as easily as you can a traditional Gold IRA. For the 2015 tax year, you can contribute a total of $5,500 to your IRAs, or $6,500 if you’re age 50 or older. If you have a high income, your Roth IRA contributions might be curtailed. If you file a joint tax return, your Roth Gold IRA contribution is limited when your modified adjusted gross income (MAGI) exceeds $183,000, and eliminated if your MAGI exceeds $193,000. For single filers, the two figures are $116,000 and $131,000, respectively. These figures may vary from year to year, so it is always best to check with your tax advisor for the latest information. Augusta Precious Metals offers cost-effective traditional and Roth Gold IRAs. With gold currently in a bull market, we urge you open a new self-directed IRA with us and enjoy the benefits of owning physical gold and silver right away.
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