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For those interested in investing in precious metals, it's crucial to explore the various available options. Investors seeking professional guidance in traditional assets like stocks, bonds, and mutual funds should consider Merrill Lynch Wealth Management.
As a full-service brokerage firm owned by Bank of America (BofA), Merrill Lynch offers comprehensive services, including account management and professional investment advice.
However, a pertinent question for savvy investors aiming to safeguard their savings from inflation is whether Merrill Lynch provides an IRA capable of holding physical gold, silver, and other precious metals.
Continue reading to discover if Merrill Lynch is the right choice for your needs and how it measures up against other available options.
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Background of Merrill Lynch
Merrill has rebranded itself from Merrill Lynch. It's Bank of America's investment management and wealth division for America. It works alongside B of A Securities which is the investment banking arm of the company.
They work cohesively to engage in different broker and dealer activities.
This company has its headquarters in the middle of New York. It used to take up the entirety of the large 34-story building on Vesey Street in Manhattan.
The company actively has 14,000 in its workforce and they manage a whopping $2.3 trillion worth of clients' assets. They also have an electronic trading platform that's known as Merrill Edge.
Merrill Lynch focuses on mainstream financial products that benefit Wall Street and unfortunately does not offer a IRA that can hold physical gold and silver.
But don't worry, if you are an investor that wants to lower your risk, diversify, and protect against the ravages of inflation with a physical gold IRA, we recommend you speak with Goldco, our top gold investing company recommendation.
Or you can read our comparison list of the Top Gold IRA Companies.
What is a Gold IRA?
A gold IRA is essentially an Individual Retirement Account that is self-directed. This is an account that has grown in popularity in recent times. This is particularly true among those looking for diversification of their investments.
Also, for those who value having greater stability. It's ultimately a financial instrument that provides different investors with the chance to invest in precious metals. This includes everything from bars to coins.
These are assets that they otherwise wouldn't be able to add to their retirement accounts. A lot of investors in the past have used precious metals as a hedge against both inflation and economic downturns.
They are good options for the longer-term investor that are looking to diversify their portfolio.
The main objective for the majority of these kinds of investors is to preserve their wealth over the long run. Precious metals prove to be just that for investors looking for stability.
This is more true when invested in a precious metals IRA because it's tax-sheltered and it allows them to invest in something that is much more stable and safe.
All of the precious metals in a gold or precious metals IRA are kept in a safe depository that is IRS-approved. That is until the owner of the IRA reaches their retirement age.
At that point, they can have the precious metals shipped to them or have them liquidated into cash. Also, it's important to remember that rolling or transferring your existing IRA into this type of IRA can be completed tax-free.
Why Invest Gold in Your IRA?
Individual Retirement Accounts (IRA) protect your retirement as well as your family's financial security.
These special accounts allow you to set aside tax protected savings that you can use in the future.
With these long term accounts it's important to allocate a significant portion to assets that are solid and reliable, so you have a secure and worry-free retirement.
You can have cash in an IRA, but that is devaluing at a rapid pace and inflation is out of control.
You need an asset that's dependable, retains it's value, and even increases in value over time, and there is no better asset for this than gold.
With the world's economy struggling through lockdowns, shortages, wars, and inflation, uncertainty has never been higher and investors are protecting themselves by placing physical gold in IRA's.
A gold IRA investment prospers from these crisis that negatively affect most other assets.
Risk is knowing the economic dangers and doing nothing to protect yourself and your family.
Safety is knowing the economic dangers and taking action to protect your financial future, and this is easy to do with a gold IRA.
How Does a Gold IRA Work?
The only real difference between an IRA that is self-directed and one that is a traditional IRA is the fact that a precious metals IRA gives an investor the ability to invest in more non-traditional investment options.
They get to invest their retirement money into different asset classes including precious metals, real estate, and other physical assets including art collections.
However, the overall function is very much the same as a traditional IRA.
This means that any contributions to this type of IRA are still tax-deductible for up to $6,000 per year or $7,000 for those who are over the age of 50.
Otherwise, you can opt to get a tax-free distribution when you begin to actively access the funds at your retirement age.
You will find that the same restrictions apply to both types of IRAs. If you end up withdrawing funds before you hit the age of 60, you will have to pay a 10% penalty and any capital gains tax if the value of the metals increases in that timespan.
However, the Internal Revenue Service does offer some exceptions to the 10% added penalty. These exceptions include withdrawing funds for education or for depositing a first-time home purchase.
The majority of people wouldn't notice major differences between either of these IRA accounts. The gold IRA and traditional IRA accounts are otherwise very similar.
They require you to follow the same procedures including placing your funds into the account and receiving a statement every quarter. You also will be subjected to the same rules and regulations as a traditional IRA.
Gold IRA Rollover Explained
A gold IRA rollover is one of the more basic concepts when it comes to alternative investment. The total rollover ends up transferring value from a traditional account to your new precious metals IRA.
You can move around value from a traditional or a Roth IRA whenever you want without paying a tax penalty on it.
When you go with a gold IRA company, you will be asked to complete an application that includes a transfer request form. You won't have the funds in your possession, but they will transfer directly from your current IRA to your precious metals IRA.
This entire process can take upwards of 2 weeks. Once it's done, you will have a rep that can help you go through with the purchase of the gold or other precious metals.
You can easily do a gold IRA rollover from your 401(k) or other accounts if you don't work for that company any longer. However, if you are currently employed, you will need to do a partial rollover if you meet the age minimum.
Whenever you are using a direct transfer, the current custodian will send out a check to your new gold IRA company to help them facilitate a purchase of your precious metals.
If the money transferred is indirect, you will end up getting a check delivered in your name. From there, you will be required to deposit these funds into your account and forward them to your new gold IRA company.
This needs to be completed within 60 days. If you end up exceeding the deadline and you aren't 59.5 years old yet, you will be required to pay a 10% tax penalty for making an early withdrawal.
What Gold is Approved for an IRA?
Not every gold asset can be owned within an IRA. The simple rule is that no IRA is allowed to have collectibles within it. Because precious metals are defined by the IRS as collectible, you cannot have them.
The good news is there are some exceptions to this basic rule. There are precious metals that can be included but they must meet specific requirements.
A bullion coin that is deemed legal tenders can be placed into an IRA. However, the coins need to have a 99.5% fineness level. Another coin that meets these requirements would be the American Eagle coin.
These qualify along with other bullion coins that are state-issued. Another qualifying coin would be the Canadian Maple Leaf. However, British Sovereign coins and South African Krugerrands do not qualify for the exception.
You'll also find that older United States coins like Double Eagles don't qualify either.
Different rounds and bullion bars of silver and gold are allowed so long as they have a 99.9% purity rating. This means they typically need to be manufactured by a COMEX or NYMEX-approved refinery or by the National Government mint.
The majority of IRA custodians will not allow you to own precious metals in their IRAs. This is why you need to find one that specializes in it. By finding a specialty company, you can make it much easier to invest in precious metals.
Reasons to Invest in Gold
Gold has long been used as an investment. It's been deemed a safe investment for many. It dates back to 550 BC when gold was used to mint official coins.
During this time, it was used as a medium of exchange.
Because gold is a finite resource, it has been and will continue to be a prized commodity across the globe.
This safety net is what attracts investors. Not only that, but it also has thermal and electric conductivity components that make it a modern industrial asset further amplifying its value.
For any retail investor, gold has become a modern-day hedge for inflation and economic crises. Whenever the stock market in the United States tanks, investors flock to gold as a hedge to avoid the pitfalls of an economic downturn.
While there is always a risk and there are always exceptions, throughout history gold has been able to outperform markets when there was global instability and economic downturns.
Gold IRAs and the Benefits of Diversification
One of the major benefits of investing in gold comes from it being such a good diversification option for any investor. As you get closer and closer to your target retirement date, it's very important to manage your risk as much as possible.
It's very important to minimize risk when you get older because that's when you will need your money the most. You don't want to lose your financial resources too late because you don't have time on your side to recover.
A market downturn or a selloff overnight could completely wipe out your retirement. It could even delay your retirement for years if you are too overexposed to the volatility that comes with the stock market.
Because of this, a lot of older investors who are nearing the age of retirement end up looking to diversify their holdings to minimize any exposure they have to the risk associated with the market conditions.
There is an underlying premise that gold has a 0.27 correlation with the stock market. Thus, it can function as a useful hedge against it. Gold bullion markets tend to remain strong whether the stock market increases or decreases in value.
This can help to protect an investor from wild swings.
These alternative assets do not have the same liquidity as other assets. Because of this, they cannot easily be bought and sold so quickly. This ends up resulting in fewer knee-jerk reactions from investors across the globe.
Having fewer knee-jerk reactions decreases volatility and makes your investment much safer and less stressful.
Merrill Lynch Portfolio Management Services
Merrill Lynch is a company that ultimately takes over the burden of trading for its clients. It's different from other online brokerage companies in that it's not for self-management. Instead, the company employs professionals to manage the assets for its clients.
They charge a fee based on the percentage of assets being managed from the accounts.
One of the affiliated companies ends up being responsible for holding the assets and the other is responsible for making the different investment decisions for them.
While having two companies that are affiliated with one another isn't necessarily optimal, it's a reputable company that is entrusted by many. It's also fully regulated by FIRNA and it's fully insured by SPIC.
Investment Style of Merrill Lynch Wealth Management
Any client that chooses Merrill Lynch can opt to give their professional advisor full control over their account. This means you can allow them to choose your investments for you. They will do this based on your financial goals.
They will also work to handle the day-to-day activities involved with maintaining the account. They can create customized accounts and they can use managed strategies.
You can also ask for advice from the advisor on what different kinds of investments would be suitable for you. This can help you figure out where you should be putting your money with professional help.
Whenever you are in the process of starting a relationship with an advisor, you will go over your financial objectives and goals to ensure they understand what you want. They will work with you one-on-one to figure out pertinent details that need to be known.
Clients will typically choose different allocations based on how many accounts they have.
Not every strategy is optimal for every person. For instance, the online Merrill Guided Investing programs only have a limited number of strategies that will invest in mutual funds or ETFs.
Conclusion
In general, Merrill has typically been marketed towards those with higher net worth. Those that don't have over $250,000 would typically be funneled to Merrill's much more automated programs.
These accounts typically come with fewer fees that you have to worry about. However, they don't have customized plans or personal advisors to help you. Therefore, it might not be a good fit for everyone.
Your experience will also likely depend on the advisor you end up getting. They have thousands of different advisors working for them. Because of this, you may not end up with a good one or you may end up with one that goes above and beyond for you.
Some of these advisors have been in business for a very long time and some might be brand new.
Therefore, before choosing Merrill, you need to find a professional advisor that you feel a good rapport with and one that has the experience you are seeking.
Merrill Lynch is not an option for investors looking to protect their wealth with a physical Gold IRA, there are much better companies to work with that we have researched extensively on this website.
Our #1 Recommended Gold IRA Company is: Goldco
We also encourage you to read our comparison list of the top gold IRA companies.
You can get a Free Gold Investors Guide from our top gold and precious metals company recommendation by clicking the link above or you can read our article of the top companies we reviewed this year:
>> CLICK HERE to read our list of the Best Gold IRA companies. <<
Or, if you like what you have read about Merrill Lynch, you can go to there website below:
I started BMOGAM Viewpoints as a way to compile all my views on investing in one place. I own my home, have some real estate, and own a few stocks like most people, but what really drives my interest in investing is I have a strong love of precious metals, especially gold.
