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Sprott stands as a leading global asset manager, providing clients with a range of real asset investment strategies and precious metals options.
Leveraging deep relationships, extensive experience, and unparalleled knowledge, Sprott consistently outpaces its competitors.
Their diverse investment products encompass innovative commodity trusts, physical bullion, mining ETFs, managed equities, debt strategies, and private equity.
In addition, Sprott collaborates with natural-resource firms, supporting their capital needs through resource lending and brokerage services.
A key question remains: Does Sprott offer a precious metals IRA capable of holding physical gold and silver?
Continue reading to discover the answer.
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Sprott Company Background
Eric Sprott founded the company in 1981, one of the earlier champions of real asset investing and precious metals. Sprott has since grown over the last four decades mainly through organic acquisitions and initiatives.
Their role has also expanded well beyond the original focus of this business that was once one of the institution brokerages that served mainly small-to mid-cap natural resource firms in Canada.
Today, they are very proud of their deep roots in this sector and their reach is now global.
For, serious, long term investors that are looking to protect their wealth from the ravages of inflation with a gold IRA that is allowed to hold physical gold and silver, Sprott does offer these types of accounts, but we do not recommend them.
Precious metals IRAs are complex and you only want to invest with the best, most trustworthy companies that specialize in these types of accounts.
But do not worry, at BMOGAM Viewpoints we have researched nearly every company in the precious metals industry have a made a list of the handful of best companies for investors that are looking to diversify and minimize their risk with a gold IRA.
What Is a Gold IRA?
IRAs, which stand for individual retirement accounts are not something new. They are the vehicles used to safeguard the funds you are saving for retirement. Traditionally, these were once the instruments used for holding assets such as bonds, stocks, or cash.
In the late part of the 1990s, gold IRAs were introduced to the investment sector. These are self-directed that allow investors the option of choosing gold or other types of IRS-approved precious metals such as palladium, platinum, or silver to back these products.
Other types of self-directed IRAs also feature assets such as cryptocurrency, art, or real estate.
Similar to the traditional IRAs, investors can contribute pre-tax to their gold IRA which grows the value of the investment in a manner that is tax-deferred.
Both alternative precious metals and traditional IRAs work on the same basis when it comes to income limits, liquidation regulations, and contribution maximums.
These are alternative paths that can be used to achieve financial security, but they are a bit more complex when you compare them to traditional IRAs.
The precious metals or gold that you choose have to match up to the IRAs (Internal Revenue Service's) exacting standards when it comes to fineness.
The rules and regulations set out by the IRS don't permit all gold products but rather only certain bars, bullion, and coins that match up to the IRS requirements. Jewelry is not permitted even when it holds significant value.
You are also required to store any precious metal that you have chosen to back your IRA in an IRS-approved depository, which means it is like purchasing gold but you won't be in possession of it.
If you decide to use one of the storage facilities that is not approved by the IRS, your Gold IRA may be at risk of disqualification.
In addition to the complexity of managing a gold IRA, there are also higher fees involved when compared to traditional IRA products.
This is why it is important to choose a company that has the skills and experience to handle precious metals IRA products. The gold IRA providers usually charge commissions and administrative, storage, and setup fees.
One of the main benefits of gold IRAs is the potential to provide a hedge against inflation while providing innovative methods to diversify retirement portfolios.
The highly-qualified and reputable gold IRA firms that we recommend assist their clients in getting the most out of these types of alternative investments.
Reasons to Invest in a Gold-Backed IRA
If you are interested in alternative investments, gold IRA accounts are an outstanding choice.
Even though the gold price changes from one day to the next mainly caused by differing economic factors, during times of upheaval and uncertainty, the value of gold typically trends upwards. This can provide more assurance when you are planning for retirement.
Similar to the stock market and any other type of investment, gold IRAs also come with a few risks, yet historically, investing in gold is more dependable. The biggest benefit to a gold IRA is the way it helps to diversify retirement portfolios.
You won't be earning the dividends with gold investments like you might with stocks, but a gold IRA provides more protection against recessions and inflations. As the value of the paper dollar goes down, gold usually goes up.
Certain industry experts oppose the idea of gold IRAs or any other precious metal IRA due to their stringent IRS regulations, the complex nature of these accounts, and the larger fees.
Some of them also suggest that if you are looking to purchase precious metals or physical gold, rather just buy the gold or silver bars. When these assets are not held in an IRA, you won't have to worry about the depository requirements or any complicated rules.
But when you are looking for a way to protect your wealth against economic downturns and you need to diversify your portfolio, a gold IRA might be the ideal choice. You should dedicate a portion (preferably under 10%) of your savings to these alternative investments.
When using a rollover to set up your precious metals or gold IRA, you won't be subjected to the $6,000 annual limits that the IRS has set (or $7,000 if you are over the age of 50).
You should ask a financial advisor to assist you in deciding whether investing in gold is going to help you achieve your goals before you contact one of the specialized gold IRA firms to help you make your gold purchase for an IRA.
Gold Coins or Gold Bullion?
The IRS has imposed stringent regulations on precious metals that are allowed in a gold IRA. To make sure your purchase is compliant, any gold products that you choose must be 99.5% pure.
The requirements for silver are even stricter, requiring 99.9% purity. Palladium and platinum purity standards are set at 99.95%.
When choosing a company that offers gold IRA services, an account representative that you will be working with uses subject expertise to assist you in making the right purchase.
The U.S. Mint's American Eagle bullion coins are popular among investors. Other common selections include the IRS-approved Canadian Maple Leaf coins and the Australian Koala bullion coins.
The IRS prohibits investors from funding their precious metal IRAs with British Sovereigns, German Marks, Swiss Francs, collectibles, or rare collectibles.
There are a few advantages that coins have over bars. They are much easier to transport and sell. It is also cheaper to deliver coins since they don't require as much security and they are lighter.
But the most significant benefit of bullion is that it reflects the price of precious metals more accurately at a precise moment.
Gold IRAs also earn large commissions on bullion when compared to coins. Any of the trusted gold IRA firms, which includes the ones mentioned in this list, won't push their customers into unwanted purchases to earn higher commissions.
If you start feeling like you are getting a hard sell, then you may want to reconsider using this firm or agent.
It is important to choose coins or bullion according to what is going to match your needs. Use the education and materials that these gold IRA companies offer.
Chat to your account representative to find out about the experience and the knowledge they have obtained from serving past clients.
You will then have all the information that is needed to feel more comfortable about your selections when deciding on either gold bullion or gold coins.
Where are the Precious Metals Inside a Gold IRA Stored?
As you might have guessed, precious metals such as gold require a particular type of storage. Your investment will need to be stored in a safe or vault.
It is important to note that the IRS has regulations in detail covering what is required when storing palladium, platinum, silver, or gold that is going to back an IRA.
Precious metals for an IRA have to remain in the custody of trustees such as a credit union, federally-insured bank, loan, savings, or any of the other pre-approved facilities.
These entities may treat precious metals such as gold as detailed individual, shared funds, or single assets. Custodians might use private depositories which will be endorsed by a commodities exchange.
When the trustee isn't a banking institution, they must be able to provide proof to the IRS that they comply with the relevant auditing, reporting, security, and accounting standards.
Any of the acceptable storage entities should also have advanced-security devices and features that pick up movement, sound, or even vibrations.
Timed high-tech locks that will automatically relock will provide an additional layer of security. Most of these facilities will also have 24/7 monitoring.
Over and above high-tech security, the storage facility should also be carrying high insurance policies (up to $1 billion).
All the companies that we suggest as the top-rated gold IRA companies are backed by top-tier reputations.
If a company recommends another type of storage arrangement or option that sounds shady or even suggests that you should be storing your precious metals on your own, is a very big red flag.
Any unapproved, unofficial storage arrangement or facility for physical precious metal storage could result in the IRS disqualifying your IRA.
The storage locations that are IRS-approved that the top gold investment firms recommend or use have security benefits in place to make sure your investment is insured and protected against unforeseen circumstances.
Which Coins are IRS-Approved for a Gold IRA?
In previous years, the IRS only permitted American Eagle gold coins to hold in IRAs.
But after the Taxpayer Relief Act of 1997, the IRS has since expanded this list of approved precious metals, which now includes U.S. Treasury coins of 1/10 ounce, 1/4 ounce, 1/2 ounce, and 1 ounce.
What Exactly is a Gold IRA Rollover?
The gold IRA rollover is a basic concept in alternative investment processes. A rollover means transferring the funds or value in your current retirement account into a Gold IRA.
You are allowed to move funds from a Roth IRA or traditional IRA whenever you like without having to worry about tax penalties.
When choosing a gold IRA firm, you will be required to fill out an application and a "transfer request" form. You won't have access to these funds with a rollover since the transfer happens directly from your current IRA into your new gold IRA account.
These processes can take as long as two weeks. Once the account is funded your account representative will assist you in buying precious metals.
You can do a gold IRA rollover from a 457(b), 403(b), 401(k), or Thrift Savings Plan (for federal employees that no longer work for an entity that provided the account).
If you are still employed, then you will be allowed to perform a "partial roll over" when you meet the minimum age.
If you decide to do a "direct transfer", your current custodian will send the gold IRA company a check so that they can help you with your purchase of precious metals.
If you choose an indirect transfer, a check will be sent to you in your name. You will then be required to deposit the funds and then send them to the gold IRA company (within 60 days).
If you do not deposit the funds in a precious metals IRA account within 60 days and you have not reached the age of 59 1/2, you will be charged a 10% tax penalty which applies to early withdrawals.
Do You Have to Use a Gold Investment Company?
If you are buying gold or other precious metals outside an IRA, it is not necessary to use one of the gold investment firms.
But if you are planning to set up a gold IRA, and you want to buy precious metals to back your IRA, one of these gold investment firms is essential. There are many benefits linked to working with the right gold investment agent or firm.
One of these examples is that many gold IRA companies provide specialized perks and services. This can include educational resources, personalized customer services, buyback programs, and guided assistance when it comes to storing your assets.
Independently investing in gold may leave you in the dark in certain areas.
These investments differ from the traditional forms of investments, so it may be worth your while to secure the infrastructure and built-in support that a professional gold investment firm can provide.
Conclusion
Sprott is a great company with a long history of success. Led by Eric Sprott and Rick Rule they have treated their commodity investors well for decades.
We really like many of their investment products like their Physical Gold and Silver Trust, and their Gold Equity Fund, but we do not recommend them for IRAs that can hold physical precious metals.
The problem is that they do not specialize in gold IRA's and for this reason we obviously can not recommend them to investors that want to protect their wealth from the ravages of inflation with a physical precious metals IRA.
But do not worry, there are some great options that we have extensively researched for you.
You can start by getting a free gold IRA investing information packet, from our top recommendation, by clicking the link below.
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 top Gold IRA companies. <<
Or, if you like what you have read about Sprott, 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.
