How to Acquire Silver Without Hurting Your Wallet

Silver is the kind of asset that can strengthen your portfolio beyond traditional stocks and bonds, as we outlined previously. Many investors choose to add silver to their tax-advantaged retirement plans — meaning they get the “safe-haven” protection of precious metals and the tax benefits of an IRA.

Photo of silver coinBut before you run out and buy your own silver bullion, there are a few simple rules you should understand to maximize the effectiveness of your silver buy.

Why Does It Matter How I Acquire Silver?

If you want to acquire silver as an investment, there are rules and regulations you have to follow so that you do not run into trouble with the government or get dinged on your taxes. You also have to decide which silver investment you want —  a limited number of silver coins and bullion bars are legally eligible for inclusion in your retirement account.

The IRS is very specific about which kind of retirement account can hold precious metals. Moreover, because silver is a tangible, physical asset, it has to be made, shipped, and stored somewhere. It is important to keep these in mind if you want to avoid headaches down the road.

Use a Self-Directed IRA or 401(k)

Unfortunately, most standard 401(k) plans and IRA providers only allow silver exposure through mining company stocks or other “paper metal” equities. You have to set up a self-directed IRA or 401(k) before you can include real silver inside your retirement plan.

Only a self-directed retirement account allows investors to buy eligible silver (or gold) coins and bullion with maximum tax efficiency. There are other important features about a self-directed IRA or 401(k), which include the following:

  • The ability to invest in other alternatives, including real estate and private placements
  • The ability to make your own investment decisions instead of relying on third-party managers
  • The ability to partner with a wide range of different specialized custodians

(Read this for more on picking custodians in a self-directed IRA.)

Once you find an IRS-approved custodian to partner with, the account needs to be funded. Most self-directed accounts are funded with a rollover from an existing account, since the the annual fees associated with precious metals IRAs are least impactful on larger accounts (the alternative is opening up an new IRA, through which an investor might need several years of maximum contributions to reach the same size as a rollover).

Making Your Purchase: the Trustee and Vendors

Deciding where to buy silver (or gold) and where to send your silver (or gold) are secondary concerns until you find the right trustee. It is relatively common for trustees to list their prices and credentials on their websites, but take the time to read client reviews before making a decision.

After you open and fund your self-directed account, you will work with your IRA administrator (trustee) to buy specific silver investments. Your purchase instructions must specify from which dealer to buy the coins and at which facility your coins should be stored.

Remember: to maximize your tax efficiency and save on cost, you need to find reputable vendors who sell IRA-eligible silver and reputable storage facilities.

In sum:

  • You cannot buy the silver yourself. You must direct your IRA trustee/custodian to make the purchase.
  • Your silver coins and bullion must be IRS approved for inclusion in a silver IRA.
  • You must find an appropriate vendor from which to buy the silver and an approved storage facility within which to store the metal.
  • Do your research — work with reputable professionals who provide expert and competitively priced services.

In addition to the tips and strategies listed here, if you call now, American Bullion, which provides all the education you need, will discuss your options and handle all the steps for you, hassle-free! Our goal is to help give you control over your own retirement, and we work hard to ensure our services are transparent, safe, and quick.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.