If you’re looking for an easy, smart way to increase your retirement savings, one alternative that should absolutely be strongly considered is buying silver in your 401k funds. Simply put, if you’re making money buying silver in your 401k gradually and eventually sell it all for cash, you’ll never be taxed on those gains. It’s that simple. What many people don’t understand, however, is that the tax law actually allows you to exclude a portion of your investments when you’re retirement age. That’s right; you can claim a deduction for every year that you’ve been collecting this income. So let’s take a look at how you might go about claiming your full investment exclusion.
There are several reasons why buying silver in your 401k is a good idea. First, it’s easy to do so, and the result is that you’ll end up with significantly higher earnings. The other advantage is that the tax benefits associated with this activity can help offset the cost of the entire plan, meaning that your actual benefit could be quite large. All told, it appears as though you’re getting quite a nice break when you make the decision to buy gold in your retirement account.
However, it’s important to note that there are some rules and regulations that govern your right to take advantage of the tax benefits associated with buying silver in your 401k plan. For instance, you cannot claim deductions for investments you make in gold bullion or other similar products. Also, another advantage of buying silver in your 401k is that you must keep track of its price. If you let it get too far out of line, the IRS could fine you for over-the-counter transactions.
These points are all well and good, but they also raise one fundamental issue with buying silver in your 401k: you have to keep track of its price. After all, it’s a product that’s subject to market fluctuations, and you can’t rely on any kind of consistent accounting methodology. To help out, another advantage of buying silver in your 401k is the fact that you don’t have to pay taxes until it’s actually received in your hands. This is another advantage, which could make keeping track of the silver’s price all the more important.
Now that we’ve reviewed the advantages and disadvantages of buying silver in your 401k, it’s time to look at how you should go about doing it. The first thing you’ll want to do is talk to your employer. Nearly all 401k’s today have a tax benefits program that allows you to contribute money to your plan before you need it. Talk to your administrator to find out exactly what the rules are for your company and if they offer any sort of tax benefits when buying silver. If they do, this can be a very attractive way for you to get started. If not, keep looking.
There are several options when buying silver in your 401k funds. You can buy ETF silver futures, which let you invest in different stocks throughout the course of the year and get a small profit every month. There are also numerous online brokerage houses that offer silver futures contracts. Keep in mind, however, that even when you buy these contracts from online brokerage houses, the commissions can still be quite high. In addition, there are some risks involved, so you’ll want to make sure you know everything about the silver market before putting your money where it belongs.
Another option when buying silver in your 401k is to purchase silver bullion bars. For years, this was the only real way of investing in silver. While they are a riskier method of investing overall than buying silver in your 401k funds, they offer tax benefits and do not require you to hold your investment overnight. The downside is that you need to store the bars at a trusted physical location, which may not be near your home. The upside, however, is that you will be able to resell them for a nice profit once the market dips.
When buying silver for your IRA, be sure to learn about IRA buy-sell provisions. Some versions of this plan actually allow you to sell silver and re-buy it under certain conditions. Keep in mind, however, that not all versions have the same tax benefits. Look for a plan that allows you to take advantage of both the buy-sell provision and the silver tax benefits. As always, talk to a qualified advisor before deciding what’s best for you.
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