A “Gold IRA” and a $300,000 Tax Mistake… Ep #226

Do you have gold as a part of your investment portfolio? Several years ago there were loads of infomercials about investing in gold, but after today’s retirement headline you may want to think twice about complicated investment strategies.

Don’t miss out on this real-world cautionary tale which provides an example of how and why owners of IRAs with assets invested in nontraditional means need to follow strict guidelines. Press play to listen.

Outline of This Episode

• [2:32] Don’t make this $300,000 tax mistake
• [5:25] You don’t have to invest your IRAs in stocks and bonds
• [12:40] You don’t need complexity to have great retirement investments
• [13:50] When the first RMD is taken from an IRA is the money considered earned income?
• [16:08] Does the custodian of an IRA pay taxes directly before distribution of the money?

Are you signed up for the Every Day Is Saturday newsletter?

If you have been wondering how you can submit your own listener question, make sure to head on over to my website RetirementStartsTodayRadio.com and simply click the ask a question button.

Another way to submit a question is by responding to my weekly Every Day Is Saturday newsletter which is delivered every Thursday morning. By joining the newsletter not only will you be reminded that in retirement every day is Saturday (even Thursday mornings), you’ll also get links to articles and resources that were mentioned on the show. 

Why one couple owes the IRS $300,000 for storing gold in their home

How’s this for a headline? A Couple Stored a Gold IRA at Home. They Owe the IRS More Than $300,000. Today’s retirement headline was written by Laura Sanders at WSJ. The article discusses a scheme that was promoted years back when ads extolled the benefits of using IRA assets to buy silver and gold coins to store at home or in a safe deposit box. However, the IRS has made it clear that there are strict rules that must be adhered to regarding IRA investments, and the couple failed to follow those rules.

You don’t have to invest your IRAs in stocks and bonds

Many people don’t realize that retirement investment accounts don’t have to invest the assets in typical securities like stocks, mutual funds, and ETFs. The law actually gives retirement plan investors many options on how they invest funds, as long as it’s not in collectibles such as artwork. Retirement accounts can hold investments in real estate, litigation funding, deeds of trust, and even cryptocurrency. One thing to watch out for with these kinds of alternatives is if your investment asset isn't liquid you could be in for some trouble around the time of your 72nd birthday when RMDs start.

Make sure to follow the rules

The article emphasizes that savers who have decided to invest in alternative assets must follow strict rules so that they are not considered self-dealing. Investors who do not follow the rules closely are risking financial catastrophe. Listen in and click through to the article to hear the details of the case so that you can understand how to avoid this type of costly situation.

Resources & People Mentioned

• A Couple Stored a Gold IRA at Home. They Owe the IRS More Than $300,000

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

Subscribe to Retirement Starts Today on

Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify