When it comes to gold, silver, and other precious metals, or any type of investment for that matter, a person should have a firm understanding of the costs and/or fees involved in such an investment. If a person is looking to invest in a precious metals IRA, there are many associated costs that should be reviewed and considered. Because of the tax-deferred nature of an IRA account, an approved IRA custodian must be used to hold the account. Here we will outline some of the potential costs:
Another interesting point to consider when it comes to the costs associated with investing in precious metals or a precious metals IRA is how these costs compare to paper metal products such as shares of the gold ETF GLD for example.
As we have outlined, there are numerous costs associated with maintaining a precious metals IRA. There are also fees associated with many paper metal products as well, however. If one were to buy shares of GLD, for example, he or she will be paying a management fee. According to Morningstar, the annual net expense ratio of GLD is .40 percent. This means that if one owns shares of the ETF, he or she will be paying the fund management almost half a percent on assets per year in fund management fees. This is certainly something worth considering when comparing paper gold to actual physical gold. Many people do not seem to realize that both physical gold ownership and paper gold ownership come with various fees and/or expenses.
In the case of GLD, taking delivery of the physical gold is very difficult if not impossible for most retail investors. Thus, one may be paying management fees associated with the fund and not have the ability to take physical possession of any of the gold owned by the fund. The bottom line is that while there are costs associated with buying precious metals and investing in a precious metals IRA, there are costs with other types of metals-based investments as well. Of course, one will want to weigh these costs in order to try and make the best possible decision for themselves given their financial situation and objectives.
A precious metals IRA account can potentially be a great way to accumulate precious metals within a portfolio. As with any type of purchase or investment, someone looking at starting a precious metals IRA should do their own due diligence and research. A person can research not only different gold or silver bullion dealers, but can also research and compare different IRA custodians, or trust companies. It is important that potential investors look at all fees involved when considering such an account.