Back in July of this year CoinLink ran a story about Gold IRA’s and the choices available to consumers/investors. Since we are coming up to the end of the year we thought it would be prudent to re-examine the topic, especially in light of the exceptional performance of Gold in the past 12 months, and the rather extraordinary events that have unfolded in 2009. But first a bit of background.

What is a “Gold IRA” ?

Traditional IRA investment accounts you open with a Bank or stock brokerage firm DO NOT allow you to purchase physical precious metals in the account. The closest you can come to this is to select one of the many ETF’s that have become available in recent years. Two of the most popular ETF’s are the GLD and SLV for Gold and Silver respectively. However what if you want to purchase the actual physical gold or silver itself? To do that, you need to set up a Self Directed IRA account.

Self Directed IRA’s require a bit more effort to set up initially, but they offer the investor the greatest level of flexibility possible by allowing you to place “non-traditional” assets into a tax deferred vehicle such as an IRA, in this case precious metals.

How do Self Directed Precious Metals IRA’s Work?

Essentialy Self directed IRAs are composed of three different elements; The Precious Metals Dealer, The Third Party Administrator and finally The Depository where your IRA assets are stored. Lets take a look at these components.

1) Your Precious Metals Dealer – where it all begins…..
For many investors this is where it all starts. Since most investors do not have existing relationships with the more esoteric components of the the Self Directed IRA , namely the third party administrator or the depository service, they often rely on the advise and hard work of their Bullion / Precious metals dealer to assist them is setting up and selecting the other two “legs of the stool”. But here is where you need to make sure that you, as the investor, are educated as to what your choices are, how they will effect your investment and to guarantee that you get the most bang for the buck.
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A consumer watchdog organization has recovered nearly $900,000 for buyers who paid far more for coins than they were worth.

The money represented full refunds in 16 recent disputes, according to the New Jersey-based not-for-profit group, the Numismatic Consumer Alliance, Inc. (NCA).

The consumers had purchased the coins – mostly overpriced bullion coins and other modern issues – on the basis of telemarketers’ sales pitches, NCA said. It said the Alliance was able to obtain full refunds totaling $884,769 for coins which were worth a fraction of their purchase price.

“Many of these buyers,” NCA said, “were senior citizens with no knowledge of coins who also lacked the Internet savvy to check out what they were buying and who they were buying it from.”

The Alliance has now recovered a total of more than $4 million for such consumers since becoming operational in 2005. NCA intervenes on these buyers’ behalf, engaging legal and other professional assistance if necessary, in an effort to ensure that coin consumers are getting their money’s worth.

The Alliance is reviewing other disputes involving coins for which consumers paid more than $10 million.

NCA seeks no compensation when it enters a dispute on behalf of an aggrieved consumer – even though it frequently incurs substantial legal bills and other expenses in the process. Funds to cover such costs are contributed by coin dealers and collectors who share its concerns. On several occasions, consumers who were aided by NCA subsequently donated funds to help it continue its work on behalf of others. (more…)

Lafayette, CO (PRWEB) May 13, 2009 — When a retirement investor wants to buy gold or other precious metals through their IRA, metals dealers frequently sell “proof coins” noting that proof American Eagles are specifically allowed by the IRS. These “proof coins” usually cost an additional 20-25% beyond the value of the coin itself and are not required for a self-directed IRA, according to Bill Humphrey, CPA and Vice President of Entrust New Direction IRA, Inc, a self-directed IRA/401(k) administrator. The investor may be having their IRA pay for the wrong proof.

No longer will retirement investors need to pay 20-25% extra. First State Depository, which provides precious metal storage, is now working with Numismatic Guaranty Corporation (NGC), the industry leader in coin certification, to offer a new service which provides proof of the metal content and purity of the coin for much less than the cost of “Proof” Gold Eagles.

Humphrey said, “People who buy gold with their IRAs are often not given the option of non-proof coins.” Often, the proof coin seems more valuable because of the description of a specialized minting process and the special mounting and special plastic capsule that the coin is shipped in. Humphrey explained, “Proof coins are not required for IRAs and often cost significantly more than the equivalent non-proof coin containing the exact same amount of metal. IRA owners investing in Gold coins with IRA funds should make sure they understand what they are buying.”

According to Humphrey, clients wanting the guarantee of gold content of the coins may want to look at a new service offered by First State Depository, a company which provides precious metal storage. First State is working with Numismatic Guaranty Corporation (NGC), the industry leader in coin certification, to offer a service which provides proof of the metal content and purity of the coin for much less than the cost of Proof Gold Eagles. (more…)