Maximize Your Finances Ahead of the May 17th IRS DeadlinePosted on — Leave a comment
For two years running now, the IRS gifted taxpayers with extra time to file their income tax returns.
You now have until May 17, 2021 to compile your financial documents, complete your tax return and make contributions to 2020 IRA accounts.
This extra time offers you a valuable opportunity to review your portfolio and diversification strategy.
You probably are familiar with (and most likely already have) a traditional IRA account. This is a useful strategy to grow your retirement funds.
There is a drawback to traditional IRA accounts however. They typically only allow you to invest in paper-based assets like stocks, bonds and mutual funds.
As you know, diversification is essential to reducing portfolio risk as well as maximizing long-term returns.
If you are looking for an opportunity to add an additional layer of diversification into your investment strategy, a self-directed IRA could be right for you.
A self-directed IRA allows you to buy and hold a variety of alternative assets like gold and silver, real estate and even assets like water rights, undeveloped land, livestock, and cryptocurrency.
The IRS contribution limits for a self-directed IRA are the same as a traditional IRA and you will enjoy the same tax advantages. For 2020 contributions (with a set-up deadline of May 17, 2021) that totals $6,000 or $7,000 if you are age 50 or older. The key difference are the types of assets you can buy and hold in a self-directed IRA.
History demonstrates that gold is uncorrelated with the S&P 500. That simply means when the S&P 500 plunges, gold typically moves sharply higher. That makes gold an excellent portfolio risk diversification tool and an ideal investment for a self-directed IRA.
You will need to open an account with an IRS-approved custodian bank to add gold to a IRA. Blanchard has a longstanding relationship with GoldStar Trust Company, but we’ll gladly help you get started with any IRS-approved custodial institution you choose.
You can easily roll over an existing IRA or 401(k) or open a new precious metals IRA.
With a self-directed IRA, you can invest in a wide variety of precious metals including gold, silver, platinum or palladium. However, the IRS has specific criteria your precious metals must meet:
- Gold: .995 fine (Gold American Eagle is the only exception)
- Silver: .999 fine
- Platinum: .9995 fine
- Palladium: .9995 fine
These are examples of gold and silver you can add to a precious metals IRA: 1 oz. American Gold Eagle Coin and a 1 oz. American Gold Buffalo or a 10 oz. or 100 oz. Silver Bar.
See all IRA eligible coins here.
Learn how to get started with a precious metals IRA here. Or, call Blanchard at 1-800-880-4653 and we can answer any questions you may have about this process. You still have time before the May 17th deadline to set up a precious metals IRA for 2020. Get started today!
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