Opening a Gold-Backed IRA Fidelity Account
Planning for and securing the future has never been as vital as now. Although the habit of saving for the rainy day is prevalent among the working class, it needs to be even more widespread. Many people still don’t feel the need to secure their futures financially and live in the bubble that they’ll continue to earn the way they currently do in the future or that their finances will only get better with time. While having a positive outlook toward life is lovely, it shouldn’t be at the cost of complacency or jettisoning practicality out the window.
Investing in stocks of companies or funds is not a recent phenomenon. But that market is quite volatile and not ideal for saving for retirement. Individual stocks and bonds are not just erratic in their behavior, but their value is also entirely contingent on externalities. In other words, they aren’t inherently valuable. That doesn’t imply stocks and other traditional investment vehicles cannot be a part of your retirement planning. But it would help if you had a relatively stable asset to prevent the boat from capsizing. In other words, you need a gold portfolio.
Gold is an excellent asset to park your money in, especially when the stock market is turbulent. However, it has some cons. Securely storing the gold is arguably the biggest hassle. It won’t just give you sleepless nights; the costs are high too. This is where a self-directed gold IRA enters the room. A gold IRA is a more modern way to invest in gold. But how does it work? And what does Fidelity Investments have to do with a gold-backed IRA? Keep reading to find that out and more.
To help you understand better and comprehensively, we shall discuss the following:
- A brief introduction to a gold-backed IRA
- An introduction to Fidelity Investments' gold-backed IRA offerings
- Setting up a gold-backed IRA with Fidelity
- Answers to some critical questions and more
If you don’t know what a gold IRA is, this article is for you. But if you are familiar with the concept but unsure which custodian to select, you may want to continue reading.
Table of Contents
What is a Gold-Backed IRA?
A gold-backed IRA or gold IRA (individual retirement account) allows you to hold physical gold bullion, gold-related investments, or other precious metals (such as silver, platinum, and palladium) in your retirement savings. Unlike a regular IRA that usually allows stocks, funds, bonds, etc., a gold IRA embraces all valuable tangibles. However, the main focus is on gold-based assets, such as gold bullion bars, gold coins, gold mutual funds, gold ETFs, etc.
A gold IRA entails a custodian or IRA company like a traditional IRA. But the precious metals IRA has a few other stakeholders: a depository and a precious metal dealer. Most physical metals dealers and storage firms have tie-ups with a custodian. If you manage to associate with a reputed custodian, joining the dots in the gold IRA square should be a breeze.
If you’d like to learn more about gold IRA, its various stakeholders, funding requirements, withdrawal rules, tax advantages, fees, etc., please check the other articles on our site. Let’s focus on Fidelity Investments and its role in helping you set up a gold IRA.
Read more: IRA Approved Gold
An Introduction to Fidelity Investments
Founded in 1946, Fidelity Investments is one of the world's biggest and most renowned financial services firms. The company provides varied financial products, which include mutual funds, retirement accounts, ETFs (exchange-traded funds), brokerage services, etc. The company is mainly known for its research capabilities, robust investment platforms, and customer support.
Like several other financial institutions, Fidelity too offers gold-backed IRA services. However, Fidelity is primarily a financial institution focusing on multiple financial investing verticals. In other words, unlike other gold IRA firms, Fidelity doesn’t directly sell precious metal coins or bars eligible for a gold IRA. Fidelity can facilitate and coordinate your precious metals retirement account, hooking you up with specialized facilities and ensuring your gold IRA becomes a valuable part of your retirement planning strategy.
Why Choose Fidelity Investments for Your Gold Investing Needs
If you choose Fidelity Investments as your gold investment service provider, you stand to benefit from the following:
- Experience and cachet: Fidelity has decades of experience and pedigree, meaning your retirement account is safe and professionally managed. The company’s track record and credibility offer the much-needed confidence investors look for in a gold investing firm.
- Diverse gold offerings: Fidelity offers different gold investment products, such as gold mutual funds, gold ETFs, access to physical precious metals market, etc. That means you’ll not have to shop for those investment products to add to your retirement account.
- Business tie-ups: Since Fidelity is an established company with decades behind them, it has professional associations with various businesses in the sector. In other words, locating approved depositories with the most stringent security standards to safeguard your gold shouldn't be challenging.
- Customer support: As stated above, Fidelity’s customer support is excellent, thanks to the company’s great work culture, reflecting how the employees treat their clients. Whether it’s creating the account, contributing to it, or just navigating the website or online platform, the customer support team helps throughout and at all times.
- Robust online platform: Fidelity’s website is robust and user-friendly, helping investors monitor their gold IRA accounts, perform transactions, access account data conveniently, etc.
- Educational resources: Fidelity offers extensive educational materials, including videos, articles, interactive tools, webinars, etc., to help its gold investors comprehend the inner workings of investing in precious metals and making informed gold investment decisions.
Gold-Backed Fidelity IRA: Eligibility and Account Creation Process
To reiterate, Fidelity doesn’t offer gold IRA services. Regardless, here are the eligibility requirements to create a gold-backed IRA with a company of your choice:
- You must be 70.5 years old or younger. The age limit, however, applies only to traditional gold IRAs. Roth gold-backed IRAs have no upper age threshold, but account holders should have earned income (income generated through a business or job).
- The IRS (Internal Revenue Service) requires your MAGI (modified adjusted gross income) under a particular upper limit. The IRS determines that threshold each year. Traditional gold IRAs have no income restrictions.
- You must be employed (salaried, contractor, or self-employed) to be eligible to set up and add to a gold IRA. If you are unemployed but your spouse is working, you’ll be eligible based on your partner’s employment status.
- There are annual contribution limits, which the IRS determines every year. It may change or remain the same every subsequent year. For 2023, individuals under 50 can add $6,500 a year to their physical precious metals IRA or $7,500 if they’re above 50 years. In previous years, it was $6,000 and $7,000.
Regarding fees, Fidelity doesn’t charge anything as setup or maintenance fees to create a gold investing or trading account. And since the company is not into physical gold and precious metals sales, storage fees don’t apply. Fidelity is very straightforward and transparent with its pricing on its gold products and other investment offerings.
Fidelity IRA and Gold Investing
If you’ve decided to invest your money in a gold-backed IRA, it’s not an option with Fidelity. But you can always look around. In the next section, we throw company names you could look at. But don’t take our word. Always do your research. Check out the company’s website or contact their customer support. Compare it with the competition.
If you’re convinced after interacting with the company’s gold IRA advisor and meeting the eligibility requirements discussed above, choose between a traditional or Roth gold IRA. Your financial objectives and tax preferences will help you decide between the two. Talk to a financial advisor to learn more. They will help evaluate your risk tolerance and appropriately pair your investing choices with your unique retirement objectives.
Once ready, contact the gold IRA company by phone, website, etc., and express your interest. Complete the account application form and send it across. Once the application is accepted, fund your account. Choose your funding source or method. You may contribute money or rollover cash from a 401(k), traditional IRA, or any existing retirement account.
The process could take a couple of days to a week to finish. Once your account is all set up, log into the online platform to check your gold IRA, make investment-related decisions, and manage savings. You can use your gold-backed IRA to hold gold, silver, and other precious metals but only in paper form. We recommend popular bullion coins, such as Gold American Eagle Coin. Click here to learn more about the coin.
Physical precious metals are commonly invested in through a gold IRA. But the precious metals retirement accounts could also hold paper gold such as gold stocks, ETFs (such as iShares Gold Trust and SPDR Gold Trust), mutual funds, and other gold products. People usually buy gold and silver to add to their self-directed gold IRA. You may add Fidelity’s various paper-based gold products. The precious metals mutual funds and exchange-traded funds that Fidelity offers result in increased exposure to the multiple aspects of the gold market.
Fidelity Gold IRA Alternatives
Since Fidelity doesn’t allow investing in actual precious metals through its gold-backed IRA, you may want to look at companies that permit purchasing gold in the metal. Some of the companies include Augusta Precious Metals, Goldco, American Hartford Gold, APMEX, and Oxford Gold Group, to name a few. These companies may offer all gold IRA-related services or only a few.
Some could be great at offering a broad choice of gold bullion coins and bars to choose from for IRA investments, and others may be experts in handling a self-directed gold IRA and helping their clients create a self-directed IRA. Almost every company mentioned above focuses on personalized support and investor education.
Read more: Top Gold IRA companies
Gold is a solid hedge against economic uncertainties (such as inflation), interest rates, geopolitical tensions, supply-demand dynamics, etc. Adding physical gold to a savings or retirement portfolio, such as a gold IRA, is a great way to invest in the precious metal. Your experience with a gold IRA depends on the custodian and how well they guide you throughout.
Fidelity Investments is undoubtedly a great company for all your gold investment requirements, except for a gold-backed IRA. Hopefully, this article provided all the information you needed to know where to look for or the companies to contact for setting up a gold IRA.
Remember, the way to a successful retirement entails much thought, thorough research, and the inclination to adapt to shifting market dynamics. With a company like Fidelity Investments watching your back, the likelihood of a gold-rich retirement is brighter, promising stability and abundance in the future. Embrace a Fidelity gold product today to set your retirement journey on the right path.
Can I purchase precious metals with a Fidelity gold-backed IRA?
No, you cannot purchase gold, silver, or other physical metals through Fidelity. As mentioned above, Fidelity primarily deals with securities that provide exposure to gold prices or the precious metals market. In other words, it deals with paper gold (precious metals stocks and other similar precious metal products) and facilitates trading precious metals. Fidelity, however, makes up for not directly letting you directly invest in precious metals by offering myriad gold products. Contact Fidelity to learn more.
What is the difference between physical gold and paper gold?
Physical gold is gold in the metal. Tangible gold items, such as coins, bars, etc., are forms of physical gold. Paper or digital gold is gold only on paper. Gold mining stocks, gold funds, gold ETFs, etc., are examples. Some people prefer physical gold over its paper counterpart gold because the former affords a sense of ownership. Paper gold doesn’t result in actual gold ownership. But tangible gold repels investors who don’t care about physical possession and don’t want to deal with the need to store physical gold. To learn more about the differences, read our comparison article here.