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Coins in Your IRA?
09/20/2012 4:24 pm EST
Focus: ALTERNATIVE INVESTMENTS
Eric Jordan, author of Modern Commemorative Coins, discusses a little-known provision that allows one to have some coins in their IRA.
You don’t just have to put the typical asset classes into your retirement accounts. Today, we’re talking about that with our guest, Eric Jordan. Now Eric, I understand that some gold and silver coins are allowable in IRAs. I didn’t know that.
Yes, they are. Silver, gold, and platinum eagles are allowable in IRAs, and that’s very interesting you should ask that question. The government says that all silver, gold, and platinum eagles are allowed in IRAs, but collectibles aren’t, right.
What they completely overlook is that silver, gold, and platinum eagles are the fastest growing collector group of coins there are, and because they have, by pronouncement, said that silver, gold, and platinum eagles are allowable in IRA’s, they’re a very special class.
You cannot take a rare better day classic coin and put it in an IRA, because it’s a collector item. It’s not allowable, but you can put a collectible, potentially collectible, silver, gold, or platinum eagle in an IRA even though you pay twice the amount for it, because it’s been pronounced allowed. It’s a wonderful loophole. I mean, they just handed it to you and they can do much, much better than the base metal, if you’re selective in what you buy.
Now, it seems a lot of people, I would guess, probably don’t know about that. What would be the advantages of doing this rather than stocks or fixed income?
It diversifies your portfolio for starters. A lot of people are very interested in silver, gold, and platinum right now. Honestly, that much interest scares me, because I’m a contrarian and I like to buy things when they’re a little bit overlooked. But, the nice thing about putting a silver, gold, or platinum eagle that you’ve bought from the mint that’s real low mintage is if the metals drop, the key dates, the rarest issues tend to rise.
So, if you bought it close to melt and the melt moves, the value of the metal moves, you’re great. If you want to do it, but you’re a little worried about dropping metal prices, there could be some sag, then it’s a good thing to be in because those key dates tend to do just fine when the metals are soft.
So Eric, if people are interested then in using some of these coins in their retirement accounts, it’s kind of unusual. What’s the best way they should go about this?
Well, first of all, you need to decide what you want to put in there. You need to be tracing U.S. Mint sales. You buy them direct, you go ahead and have your manager that you have your IRA setup with, your Roth setup with, tell them what you wish to buy, have them buy them from the United States Mint and then put them in storage for you. It’s really not hard. The key is you.
You need to decide what you want to put in there, and remember 95% of the coinage that’s available you don’t want. You need to cherry pick the better 5%. I’ll give you a beautiful example. The United States Mint strikes a coin called the W Mint Mark $50 gold eagle. It’s been running around 8000 mintage every year. They sell it directly to the public, unlike most of their bullion issues. That coin, on a typical run, is between ten and 100 times rarer than the typical common dates. If you’re going to buy gold, buy that.
Great ideas today, great information. Thank you so much.