You’re sold on the shiny perks of precious metals IRAs, but how do you decide between silver and gold? Let’s explore the pros and cons of each to help you make an informed decision.
The first step in deciding between a silver IRA vs. gold IRA is to learn the basics about how precious metals IRAs work and why investors might choose one over the other.
Precious Metals IRAs: Let’s Start With the Basics
Individual retirement accounts, or IRAs, allow you to stash away money and grow it over time. If you pick a traditional IRA, you don’t pay taxes on the funds until you start taking withdrawals. With a Roth IRA, though, you pay taxes on the money upfront. The money then grows tax-free, which means you won’t owe anything when you take withdrawals.
Normally, IRAs hold investments like stocks, CDs, and so on. Precious metals IRAs, comparatively, can hold metals like gold, silver, platinum, and palladium. You can choose either a traditional or Roth precious metals IRA. The tax advantages remain the same as they are for a regular IRA.
Many investors view precious metal IRAs as a way to diversify portfolios. For example, if you invest in stocks and the market plummets, you could lose quite a bit. Gold, however, has built-in value, so its price doesn’t freefall nearly so much. Additionally, its value could increase thanks to global events and interest rate changes.
One small downside is that not all precious metals are eligible for IRAs. For example, acceptable gold has to be 99.5% pure, and silver products must be 99.9% pure. On top of that, non-proof coins must be in mint condition with proper certificates of authenticity. Proof coins must be in original packaging and come with a certificate of authenticity.
Acceptable gold products include:
- Gold American Eagle
- Gold Australian Kangaroo
- Gold Canadian Maple Leaf
- Gold American Buffalo
- Credit Suisse bars
Acceptable silver products include:
- Silver American Eagle
- America the Beautiful coins
- Austrian Vienna Philharmonic coins
- Chinese Panda coins
- Mexican Libertad bullion coins
Silver IRAs vs. Gold IRAs: How Do They Stack Up?
To answer, “Which is the best: silver IRA vs. gold IRA?” you’ll have to compare the historical performance of these precious metals.
Historically, gold has held its value better than silver, and its price tends to increase during global upheavals. For instance, the price of gold jumped significantly after the 9/11 attacks in New York and shortly after Russia’s invasion of Ukraine in 2022.
Gold also has plenty of applications. It’s used in dentistry, medicine, jewelry, and electronics. Unless manufacturers find an alternative to gold, it’ll always be in demand. On top of that, gold is rarer than silver, which translates to a higher price.
Silver has plenty of industrial uses, too. For example, its antimicrobial properties make it a must-have in medicine and dentistry. Because silver costs less than gold, it presents a lower barrier to entry. However, silver prices are more volatile than gold, making it a riskier long-term investment.
Then, there’s liquidity to consider. How quickly can you turn your precious metals into cash? Gold is usually more liquid than silver due to higher demand. Silver is less expensive, though, which can mean it’s a little bit easier to find buyers.
You’ll also have to think about storage and insurance costs. Gold is more dense than silver, which may impact the price you pay to store and insure it.
Gold IRAs: The Good and the Bad
Perhaps the biggest perk of gold is that it tends to remain quite stable even in the face of economic volatility. That means you could enjoy steady growth and take advantage of your gains in your retirement years. If you’re primarily interested in protecting your money over the long term, a gold IRA might be for you.
Gold may also serve as an inflation hedge. When inflation goes up, the dollar can’t buy as much as it once did. But there’s a constant demand for gold, so it’ll remain valuable no matter how much inflation skyrockets.
Gold does have a couple of drawbacks, though. One of these is that it’s expensive, and that’s putting it lightly! Gold prices jumped to over $2,000 in the past few years, and they don’t show signs of falling much any time soon. Unless you have a significant amount of cash lying around, buying gold could be out of your reach.
Additionally, gold has a poorer short-term growth potential than silver. Silver is better for faster gains, while gold is ideal to hold over the long term. Don’t expect to get rich quick if you stock up on gold.
Silver IRA vs. Gold IRA: Where Silver Shines and Where It Struggles
If you’re looking to set up a precious metals IRA on a tight budget, stick with silver. The price per ounce hovers between $25 and $30, making it drastically more affordable than gold. Essentially, you’re getting more bang for your buck.
On top of that, there’s the potential for impressive short-term growth. Silver is a necessity in auto manufacturing, electronics, and medicine, so demand for this precious metal will remain high. Plus, because silver is cheaper than gold, you may find it easier to sell. This is a big perk if liquidity tops your priority list.
Silver prices also tend to be more volatile than gold. Whereas gold prices typically rise and drop slowly, silver’s value could change drastically overnight.
Why the Right IRA Custodian Matters
Choosing the right IRA custodian matters just as much, if not more so, than your choice of precious metal when it comes to portfolio diversification. Your custodian secures safeguards for your gold or silver assets by holding them in an IRS-approved depository. It’s a big job, so choose wisely.
When you hire a custodian, they’ll talk with you about your depository options. You must pick a qualified depository for storing your metals, as the IRS doesn’t allow you to keep IRA-eligible metals at home.
Pick a depository with excellent security and reasonable storage fees. You’ll also need to choose a depository based on whether you prefer segregated or commingled storage. With segregated storage, the depository keeps your metals separate from everyone else’s. If you opt for commingled storage, it will keep your metals with those of other customers. Segregated storage is more expensive but could also be safer.
Start Your Precious Metals IRA Journey With Preserve Gold
Looking for a precious metals IRA partner? Reach out to us at Preserve Gold. We’ll help you pick the perfect precious metals IRA for you. See what our customers say:
- “After researching gold investment options for years, I finally found a company that made me feel confident.”
- “I feel comfortable and completely satisfied with my decision with this investment. I trust Preserve Gold and the process they follow.”
- “The knowledge my representative gave me was paramount to my success, and to do this all without making me feel inadequate is what ALL precious metal firms should be doing with ALL of their clients.”
If you still need help with the silver IRA vs. gold IRA question, call Preserve Gold at (877) 444-0923 today.
