How to Invest in Gold and Silver in an IRA

How to Invest in Gold and Silver in an IRA

Most financial professionals across the globe agree that asset diversification can be a key to success. A self-directed IRA can buy gold and silver coins or bars as long as the purchased metals meet the IRS requirements. Some benefits of holding gold and silver in an IRA are…

  • Gold and silver are tangible assets
  • They allow for a truly diversified portfolio
  • They can provide a hedge against equity fluctuations and inflation
  • Asset growth and profits are tax-deferred

As a premier self-directed IRA custodian, Midland Trust is equipped to handle all the unique requirements involved with holding gold in your retirement plan. We work with reputable depositories to arrange depository account set up, facilitate valuations for IRS reporting, and provide account administration. Midland simplifies the process into 4 easy steps:

Step 1: Simultaneously open your Midland and depository accounts

The IRS specifically states that gold and silver in an IRA must be in the physical possession of a trustee or depository. You cannot have physical possession of the metals at your home or in a safety deposit box at your local bank. Midland has established relationships with two reputable depositories, Delaware Depository and First State Depository, to help satisfy this requirement.

Step 2: Fund your Midland account

Once your Midland account is open, Midland will help you fund your account, whether it is by transfer, rollover or contribution.

Step 3: Find a reputable metals dealer and send us an invoice listing the metals to be purchased.

The most common gold and silver coins purchased are the American Eagle and Canadian Maple Leaf coins. Bars and rounds manufactured by an NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements are also common.

Most depositories have an inhouse metals dealer, which can help reduce shipping times and costs. Should you opt to work with a third-party dealer, do your due diligence to ensure you are working with a reputable company that is familiar with IRS rules.

Step 4: Authorize Midland to pay the invoice for the metals by electronically completing a Midland Purchase Authorization Form

A dedicated client service specialist will assist you throughout the entire process, from funding the IRA to confirming the deposit of the gold into your Depository account.

For more information visit www.midlandtrust.com/individual-investors/gold-silver/ or call a Midland Rep today at 239-333-1032.

INVESTING IN REAL ESTATE WITH YOUR CHILDREN

Investing in Real Estate With Your Children

I learned about investing when my father introduced me to his brokerage account at a young age. It was through him that I learned what stocks were and grasped a general idea of how the stock market works. He set up a custodial account for me, as I was under the age of 18. He then put my life savings in stocks, a whopping $1,000 that I had saved from birthdays and mowing lawns. Investing for your children is somewhat easy as all you need to do is set up a brokerage or custodial account if they are under the age of 18. Not all parents may be knowledgeable about the stock market. Alternatives such as real estate, offer a wider variety of investments that appeal to a broader market.

REAL ESTATE INVESTING WITH CHILDREN

Like stocks, properties tend to go up in value over time. You can also rent a property and generate a passive stream of income.

Real estate investing is not for everyone. But for those in the real estate industry, this may be a preferred alternative (or addition) to investing in the stock market. Purchasing real estate with your children is simple and self-explanatory. Find a property and buy the property. You could even own the property 50/50 with your child. If you are using IRA funds, financing can be challenging. There will be more rules and potential taxes in which you will need to familiarize yourself. For this reason, most IRA transactions are cash.

INVESTING WITH RETIREMENT ACCOUNTS

We should teach saving at a young age, especially the importance of investing with IRA accounts where gains grow tax-deferred. Unfortunately, my father was not very knowledgeable about IRA accounts. It was not until I started working at Midland that I began to understand the importance of saving for retirement. Using tax-deferred strategies such as IRAs, HSAs, ESAs, 401ks, and 1031 exchanges became important. IRAs and other investment options are not taught in school, so it’s important to teach your children at home.

IRA CONTRIBUTIONS AND GIFTING

To be eligible to contribute to an IRA, you must have earned income from a salary, commissions, tips, or bonuses. It is unlikely that your child is working a summer job solely to save for retirement! Yet, if you have expendable cash, you can always gift your children money. The annual gifting limit is $15,000 per year (as of 2020). As long as your children have enough earned income from a job, they can potentially use the proceeds of your cash gift. The gift could help them max out their IRA contributions and even HSA and 401k (if eligible). Learn more about gifting money to your children for retirement savings.

Investing in stocks through an IRA is very straightforward. All you do is set up an IRA brokerage account and buy a stock. Investing in real estate through IRA funds is a little more complicated. A brokerage is not going to allow you to make this investment, as it is not in their business model. They will try and pitch you the option of purchasing Real Estate Investment Trust (REIT) stocks instead. However, you can use your retirement funds to invest in real estate, which includes buying land, rental properties, commercial properties, and even loaning money via promissory notes. You can do all this in a tax-deferred manner using self-directed retirement accounts such as 401ks, IRAs, ESAs, and HSAs. While your children likely do not have the same amount of funds as you do, they can still invest in real estate by structuring things differently.

QUICK RULES OF INVESTING IN REAL ESTATE USING IRAS

  1. The first step is to find a self-directed IRA custodian, such as Midland, that can do the recordkeeping and report to the IRS on the movement of funds and the real estate in the IRA.
  2. You do not need to own the property 100% with IRA funds. When purchasing the property, you can team up with other entities or your funds. But, all expenses and income going forward have to remain proportional to how you purchase the property. For example, if you buy a $100,000 property using $90,000 (90%) of your IRA funds and $10,000 (10%) of your child’s IRA funds, going forward, all expenses and income have to remain in this proportion. If your real estate tax bill is $1,000, then your IRA would need to pay $900 (90%) and your child’s IRA would need to pay $100 (10%).
  3. You cannot live in the property personally or have disqualified people living in the property if your IRA owns it. Disqualified parties include your parents, grandparents, spouse, children, grandchildren, daughter, and son’s/daughter’s in-laws.
  4. You cannot put “sweat equity” into the property, which means you and disqualified parties cannot add value to the property by cleaning, fixing, replacing, or landscaping.
  5. When investing in real estate using your IRA, it is highly recommended to maintain an IRA cash balance to cover unexpected costs associated with owning property.

If you have questions or want additional information on investing in real estate with your children, call us at 239.333.1032 or visit www.midlandtrust.com.

MIDLAND TRUST IS NOT A FIDUCIARY: Midland’s role as the custodian of self-directed retirement accounts is non-discretionary and administrative in nature. The account holder or his/her authorized representative must direct all investment transactions and choose the investment(s) for the account. Midland has no responsibility or involvement in selecting or evaluating any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.

AUTHOR: Andy Anger, Senior Associate in Client Services at Midland Trust

We Are Midland – Our Goals, Values, and Mission

We Are Midland

WHO WE ARE

At Midland Trust, we want to tell you who we are and that you, our clients, are important to us. Learn about Midland’s goals, values, and mission.

MIDLAND’S VALUES & GOALS

Human Capital Investment

We invest in the growth and development of each employee. We do this because we realize their value to Midland. Midland respects and values every employee. Our teams build a positive and enthusiastic environment to reach our goals. We assume the best in others and stress the positive in all situations.

human capital investment

Responsiveness

Using feedback from our clients and employees, we evolve. We improve our offerings, training, and processes. What drives our clients in the marketplace is also driving us.

responsiveness

Honesty and Integrity

We treat every individual client and employee with integrity and honesty.

honesty and integrity

Leadership

Each of us leads and motivates by example and lives our corporate values every day. We coach, train, develop, and empower employees to reach their full potential at Midland and in our greater communities. We are here to serve.

leadership

Corporate Citizenship

Midland Trust is committed to being a responsible corporate citizen everywhere we operate. We believe in engaging in opportunities in our communities. We work with our neighbors to improve lives.

corporate citizenship

OUR MISSION

Midland became an Employee Owned (ESOP) company. The employees share in the success of our company. We make them the priority of our mission so you can succeed. We are Midland.

People Make Midland

Get to know the Midland Leadership Team!

Trading Commodities in Retirement Accounts

Trading Futures and Forex In a Retirement Account

With the uncertainty and ever-changing nature of the stock market, commodities trading has become much more attractive. Trading commodities in IRAs has been allowed since they were established in 1974 and there are some real benefits to both the investor and futures professionals. At Midland, we’re making it our goal to educate about alternative investments that provide diversification and, therefore, stability in retirement accounts to protect the long-term futures of our clients and readers.

Futures and forex (foreign exchange) trading accounts can be held in any type of IRA including; Traditional, Roth, SEP, SIMPLE, and Solo 401(k) plans. These plans allow individuals to save for retirement tax-free or tax-deferred and gives professionals an alternative source of funds that their clients can use.

BENEFITS FOR INVESTORS

Adding futures to a retirement planning strategy can mean investing in something the investor is familiar with, allowing them to use their knowledge and expertise to benefit their retirement. Futures also adds a dimension of diversification and can help hedge against losses in other markets.

BENEFITS FOR PROFESSIONALS

Offering the IRA investment option to your clients can help you serve your clients better because most investors aren’t aware that they can use IRAs to invest in commodities. Offering IRAs can also grow your business by doubling the number of accounts you establish per customer; personal and IRA.

WHAT DRIVES/IMPACTS THE VALUE OF COMMODITIES?

  • Global and industry demand
  • Political instability
  • Organizations that control exports (OPEC for crude oil as an example)
  • Natural disasters
  • USD (can impact gold for example)
  • Inflation
  • Market volatility
  • Weather (especially for agricultural commodities)
  • Speculation

HOW TO GET STARTED (5 EASY STEPS)

Creating and funding a commodities trading account in your self-directed IRA is a relatively simple process. Many clients of Midland choose to invest their retirement funds in futures and forex with their self-directed IRA to build tax-sheltered income on the returns.

STEP 1: ESTABLISH A MIDLAND ACCOUNT

You can complete our online application or our paper application which you can fill out by hand and mail, email, or fax to our office.

STEP 2: FUND YOUR ACCOUNT

You can fund your account in 3 ways:

  1. IRA to IRA Transfer
  2. 401(k) or other, qualified plan via Rollover
  3. Annual contribution

STEP 3: ESTABLISH A TRADING ACCOUNT WITH AN INTRODUCING BROKER

When establishing your trading account with an introducing broker, you must abide by the following guidelines:

  • Select “Individual” account type
  • The trading account must be titled in the name of and owned by your IRA
  • If you are not trading this account yourself, you must grant a Commodity Trading Advisor (CTA) permission to trade in the account on your behalf

STEP 4: SEND MIDLAND YOUR COMPLETED TRADING AGREEMENT

Send Midland the completed trading agreement with your desired trading company as well as your CTA agreement if applicable. Midland will countersign the trading agreement to build this account within your IRA. A trading account number will be created within a few business days.

STEP 5: FUNDING

In your Midland360 online client portal, you can grant permission for Midland to facilitate your funding. For investment amounts over $100,000, a manual purchase form is required and completed with a phone call. Midland will also call to verbally confirm your approval to fund the investment into the trading account. Funds will go out the next business day via wire.

If you have any questions regarding trading commodities in an IRA or need help getting started, please contact Midland by calling us at (239) 333-1032 or visit our website at www.midlandtrust.com and chat with one of our professionals.

MIDLAND TRUST IS NOT A FIDUCIARY: Midland’s role as the custodian of self-directed retirement accounts is non-discretionary and/or administrative in nature. The account holder or his/her authorized representative must direct all investment transactions and choose the investment(s) for the account. Midland has no responsibility or involvement in selecting or evaluating any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.

Prevent IRA Investment Scam and Fraud

IRA Investment Scams and Fraud Prevention

With the Pandemic of 2020, there have and will be significant changes in our lives. These changes create opportunities, both good and bad for investments. Now is the time, more than ever, to be on the lookout for scams and other untrustworthy fraudsters. This article will help with IRA investment scams and fraud prevention.

Do not let your IRA account fall victim to one of these bad investments. Unfortunately, we live in a world that is full of scams and schemes and people attempting identity theft. According to a report in 2019, U.S. investors held about $8.8 trillion within their IRAs. This significant figure makes IRAs an attractive target for fraud. It is so important to do your due diligence before making any investment.

You Have Control

As the IRA owner, you have total control over where and what you want to invest in when you use a self-directed account. With any self-directed IRA, your IRA custodian or administrator are not responsible for the performance of your investment. The IRA administrator or custodian only does recordkeeping for the account and is not involved in the investment decision in any way. You, as the IRA owner, are responsible for vetting and evaluating all your IRA asset choices. This should be true for every asset you choose, including stocks and bonds.

Before making any investment using a self-directed IRA, you should ask yourself the following:

  • Who is touching my money?
  • How long have they been in business?
  • Are they regulated?
  • How does the Custodian Administrator contact me?

If you don’t know this information from the start, ask. You should feel comfortable with the entire investment process. It’s essential to do your research on the company you plan to invest in. Just by doing a Google search on your investment, the manager can give you a lot of insight into your potential investment. You should also be aware of any unsolicited investment offers, especially if it is promoting the use of a self-directed IRA. It’s smart to ask yourself, “If this investment opportunity is so good, why isn’t everyone doing it?” Who is the target market of the investment? Do your homework on every investment!

If an investment offers an outrageous guaranteed return with very low risk, then you might want to ask the question, “Is this investment too good to be true?” Go with your gut instinct and don’t invest in anything that makes you feel uncomfortable. It’s always a good idea to ask a professional in case you are unsure. Midland Trust is not a fiduciary, but your CPA and tax advisors are great resources to consult with when making any investment.

Once you choose an investment, it’s essential to monitor your self-directed IRA and the value of your investment. We at Midland Trust offer online access to your self-directed IRA. An online portal easily allows the client to view current and past statements and to keep track of your account. You, as the IRA owner, will need to have contact with the investment sponsor to get an up-to-date value of your assets.

The biggest mistake an investor can make is to not do the due diligence on their investment. We can not stress the importance of learning more about your finances before you get started. Some asset classes are riskier than others, be sure to ask as many questions as you like before you get started. Below are several websites that can help you investigate your investment:

If you have any questions or would like additional information, please contact Midland Trust at (239) 333-1032 or visit www.midlandtrust.com.

Top 7 RMD Changes With the CARES Act

Top 7 RMD Changes With the CARES Act

With turning 72 (or 70 1/2 prior to December 31, 2019), you’re normally required to make annual distributions from your 401(k), IRA, or other tax-advantaged retirement accounts (excluding Roth IRAs). If you fail to take a required distribution, you’re taxed heavily (50%) on the amount you were required to withdraw. Thanks to the CARES Act, you are not required to take money out of your retirement accounts in 2020. The upside of not having to take your RMD this year for many investors is that you can leave your investments alone and not have to worry about liquidating or taking a piece of your investment in-kind to satisfy your RMD. There is also the advantage of not having to pay taxes on the funds taken for RMD purposes. Read on to learn about the top 7 changes to RMDs with the CARES Act.

CARES Act: Top 7 RMD Changes

1. 2020 RMDS Are Waived For IRA Owners & Beneficiary Accounts

The CARES Act has waived RMDs for defined contribution plans, governmental eligible deferred compensation plans, and individual retirement plans (which are IRA accounts and IRA annuities).

This includes accounts the individual owns personally and is a beneficiary of. RMDs have been waived for both of these cases with the CARES Act (Section 2203).

Please note: RMDs are not waived for defined benefit plans.

2. 2019 RMDs Waived Until April 1, 2020

For an individual whose first RMD year was 2019, they had the option of deferring their RMD until April 1, 2020. This waiver only applies if the first year’s (2019’s) RMD was not taken by December 31, 2019, and the individual intended on satisfying their first year requirement in 2020.

3. Distributions Can Be Rolled Back Into an IRA

RMDs are not typically eligible to be rolled over to another IRA. However, because RMDs are waived for 2020, distributions done this year can be rolled back into an IRA in order to avoid paying taxes on those funds as long as this is done within 60 days from receiving the funds. Additionally, a distribution that is properly rolled over is excluded from income reported for that year.

Please note: The one-per-year rule still applies (see number four).

4. The One-Per-Year Rollover Rule Still Applies

Taking a distribution from an IRA account and then rolling the funds into another IRA within the 60-day window (which is referred to as an indirect rollover) can still only be done once per calendar year. This does not apply to Roth conversions or rollovers where an employer-sponsored retirement plan, a 401(k) for example, is on the distribution or rollover end of the transaction).

5. The 60-Day Rollover Extension/Waiver

EXTENSION

The 60-day rollover period can be extended if the 60-day deadline was missed due to a timing error by the financial institution or due to any of the reasons listed in Revenue Procedure 2016-47. If this happens, the rollover contribution may be made as soon as possible, but generally within 30 days of the missed deadline.

The deadline is generally postponed due to a federally declared disaster. This year, in response to COVID-19, the deadline for completing a rollover was extended to July 15, 2020 under IRS Notice 2020-23.

WAIVER

With the IRS Private Letter Ruling (PLR) request, the IRS may waive the 60-day rollover requirement. However, the IRS charges a hefty fee of $10,000 to review these waiver requests, with no guarantee of a favorable ruling. The IRS considers the circumstances of each case when making a decision. The IRS uses guidelines (available in IRS Revenue Procedure 2003-16).

These are just a few of the circumstances in which the 60-day deadline can be considered under the waiver.

6. RMDs Can’t Be Rolled Over From Beneficiary Accounts

Except for spousal beneficiaries, an individual may not roll over any portion of a distribution from an inherited retirement account.

Under the spouse-beneficiary provision, the rollover may not be made to a beneficiary (inherited) retirement account and must be made to the spouse’s own IRA (non-Beneficiary IRA).

7. The 5-Year Rule Becomes 6

The 5-year period is extended by one year if 2020 is part of those 5 years. See the table below.

Year the Account Owner Died Year the Account Must be Fully Distributed
2015 2021
2016 2022
2017 2023
2018 2024
2019 2025

For questions regarding how these RMD changes with the CARES Act affects you, contact your tax and/or financial advisor today. If you have questions about how this specifically affects your IRA account at Midland, you can reach us by calling (239) 333-1032 or by visiting www.midlandtrust.com.

MIDLAND TRUST IS NOT A FIDUCIARY: Midland’s role as the custodian of self-directed retirement accounts is non-discretionary and/or administrative in nature. The account holder or his/her authorized representative must direct all investment transactions and choose the investment(s) for the account. Midland has no responsibility or involvement in selecting or evaluating any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.