IRA Frequently Asked Questions

Last Updated on April 17, 2024 by Ben

Saving for retirement can sometimes be intimidating. This starts with determining which retirement plans or accounts work best depending on someone’s financial situation. One of the most popular investment avenues is an Individual Retirement Account (IRA).

Before putting money in a traditional or Roth IRA account, it makes sense to know all its basics first. Fortunately, this article provides the answers to some IRA frequently asked questions!

At a Glance Rating:

Top 4 Gold IRA Companies

IRA assets offer a massive tax advantage in terms of long-term compounding. It allows investors to take advantage of tax-deferred growth to provide financial security when retirement comes. Investors are currently involved with precious metal assets.

Several precious metal companies are making names in the industry today. However, there are only four that stand out among the rest. Read through to get to know them and their respective pros and cons.

Augusta Precious Metals: Editor’s Choice – Great Buyback Program (4.9/5)

Star Rating

First on the list is Augusta Precious Metals. They have been in the business since 2012, intending to assist clients with their retirement portfolios. Augusta offers precious metal investments that shield investors from inflation and the fluctuating stock market.

However, note that their high-quality products and services come with a price. Augusta’s initial pricing is at an all-time high. The minimum required deposit is worth 50,000 USD, which could make other investors back out.

Its wide variety of precious metals makes Augusta Precious Metals stand out among other IRA providers. Also, they never let any IRA owner invest recklessly on their own. A company financial advisor treats their client fairly and lawfully.

This precious metal firm values a long-term relationship with its investors. Augusta’s team provides educational content to assist clients in navigating their retirement accounts and understanding the ins and outs of investing in precious metal IRAs.

Moreover, Augusta commits to providing 100% transparency in all its services. There are no hidden fees and markups, making investment pricings go without any tricky motives. This reason alone can prove how they get zero complaints online.


  • The services offered are accessible nationwide due to its many known depositories.
  • Scholarly content concerning investments is available for customers to guide their investment journey.
  • There are no awful judgments regarding the company’s products and services.
  • They provide an interactive live discussion on Augusta’s website.
  • There are numerous positive reviews from different online reviewers.


  • The required minimum distributions may be too much for investors, especially those with a strict budget.
  • The Augusta online site needs more information about all its services offered.
  • The bullion option is limited, unlike gold and silver.

American Hartford Gold: Runner up – Best Price for Bullion (4.8/5)

Star Rating

Since 2015, American Hartford Gold has gathered a fair amount of clients. It is a California-based investment company that trades IRAs. The main objective of American Hartford Gold is to help clients diversify their retirement portfolios.

Clients can relax about the security of their investments because all precious metal orders are safe and sound in storage houses. The precious metals offered are of excellent quality from South Africa, Canada, and Australia.

American Hartford Gold could be an ideal choice for clients looking for an economic IRA provider. The company does not have fixed costs, and investors can hit a good bargain depending on their financial situation.

In addition to all that, American Hartford Gold has gathered excellent ratings in the customer service category. Clients claim they are pleased with the firm’s swift reply times and the advice they provide.


  • The minimum investment is reasonable for annual IRA contribution limits in American Hartford Gold.
  • They are open for any queries and concerns 24 hours daily.
  • Investors are safe with a guaranteed buyback assurance — they can get silver and gold investments with no liquidation fees.
  • Plenty of depositories nationwide, making their products and service more convenient.


  • There is no online catalog for American Hartford Gold.
  • Coins available for investments are only gold and silver.
  • For more clarifications, clients must call a company representative because the website needs to be more informative.

Goldco: Best and Most Trusted Gold IRA Company Overall (4.6/5)

Star Rating

Goldco Precious Metals is a respected company that supplies precious metals in individual retirement accounts. This institution simplifies a complicated procedure to assist clients in safeguarding their precious metal possessions.

It is worth saying that Goldco knows what is up. They have been in the investment industry for 16 years, so it is not surprising that they are on this list. Also, the American Business Awards acknowledged Goldco in the financial services category in 2021.

IRA and precious metal investors may consider Goldco if they value an organization’s reputation and advice. Based on their reliability and ethical industry practices, they have garnered numerous favorable judgments from satisfied clients nationwide.

A Goldco representative helps retirement investors to diversify their money with precious metals. In addition, this company buys back a client’s IRA-approved precious metals at a high fee.


  • Newly registered clients are qualified for exclusive offers.
  • All financial experts from Goldco bear long-term investment experience.
  • The pricing is both highly transparent and competitive.
  • Goldco has significant public figure exposures, like Sean Hannity and Ben Stein.


  • Palladium and platinum are both unavailable in Goldco’s IRA category.
  • The minimum initial deposit may be reasonable, but some still consider it a bit pricey.

Birch Gold Corporation: Great Staff Overall (4.5/5)

Star Rating

Birch Gold Group is a company that’s been around for more or less 17 years. The company is among the most proficient IRA providers based on its products and service offerings. It is no surprise why they deserved to be on this list in the first place.

With almost two decades of industry experience, Birch Gold Group is prepared to provide clients with an investment blueprint to match their financial needs, wants, and risk tolerance.

Birch Gold Group has countless positive reviews on reputable independent review websites. In addition, this precious metal provider has only a few flaws. Clients wishing to secure their IRAs must consider teaming up with Birch Gold Group.


  • They have teamed up with various depositories nationwide. This provides more accessibility and reachability for potential clients.
  • The 17 years of experience are hard to beat.
  • The minimum investment to open a qualified retirement account is a green flag for more investors.
  • Their exposure in Ben Shapiro’s show attracted plenty of clients.


  • Unlike other precious metal investment companies, Birch Gold Group does not have a live web conference between financial advisors and clients.
  • The Birch Gold Group’s main website needs an update regarding relevant information.

How is an IRA Different from a 401(k)?

Most people are probably familiar that IRAs and 401(k) plans are both tax-advantaged retirement accounts. However, many still need to learn about its differences.

For starters, IRA is a retirement account that anyone can open independently, with or without an employer. On the contrary, a 401(k) plan requires someone to sponsor this account through a job. The employer automatically deducts the payment from the employee’s paycheck to fund the 401(k).

Furthermore, IRAs typically offer investment choices over 401(k) plans. Regardless, the allowed contribution levels are much cheaper.

The bottom line is that both are good for anyone aiming to grow and prepare for retirement. You don’t need to choose between two retirement plans — get both if there is an opportunity!

Traditional vs. Roth: How Do They Work?

Even though they have a similar objective, traditional and Roth IRAs work differently. The most distinguished difference is how and when funds get taxed.

Traditional IRAs allow investors to get state and federal tax deductions. What happens here is the money going into the account would be tax-free, but they are considered taxable income once you are ready to withdraw them in retirement.

In contrast, Roth IRAs have no tax deductions, but the money grows tax-free. Once the retirement date comes, the investors are not subject to paying taxes on withdrawals. Unlike traditional IRAs, Roth IRAs do not require an age limit for withdrawing.

Make sure to speak with your tax advisor regarding these things before investing.

Which IRA Type is Best for Me?

It may be applicable to contribute to both IRAs. Doing so will provide an investor with taxed and non-taxed withdrawal options upon retiring.

However, if the budget is of concern, an investor can only contribute to one. In that case, an effective way to determine which IRA suits an investor’s financial pursuits is to consider their retirement tax bracket.

If an individual is currently under a low tax bracket but anticipates making more during retirement, choosing a Roth IRA is the best option.

On the other hand, traditional IRAs are for people who do not expect to gain any passive revenue during retirement and will therefore be in a lower tax bracket. They would take advantage of the offered tax deductions today.

How Much Money Should I Invest in an IRA?

In 2022, the ideal target is to hit the 6,000 USD per year, or as close to one’s budget permits. Moreover, it can go up to 7,000 USD for 50 years or older.

For instance, a 6,000 USD annual investment at a 7% rate of return can blow up to 612,438 USD after 30 years. You wouldn’t hesitate to withdraw money at that point.

Such contributions are subject to compounding returns. This strategy relates to a snowball rolling down a hill. A snowball starts small and steady but gets more prominent as it collects more snow. Like money, the investments work automatically by themselves upon regular funding.

When Should I Make IRA Contributions?

As mentioned, a monthly IRA contribution is ideal. However, the frequency is a hundred percent up to the investor. Some may contribute monthly, annually, or before annual tax deadlines the following year.

However, consider how much money it could snowball into once an investor starts contributing sooner than later. Of course, any investments bear risk, but the more time the money is in the field, the more time it can grow.

How Do I Convert My Traditional IRA to a Roth IRA?

There are three easy options for traditional to Roth IRA conversion. Investors may choose between a rollover, trustee-to-trustee transfer, and the same trustee transfer.

Rolling over an IRA lets investors receive a distribution from their traditional IRA and contribute them to the new Roth IRA. This is payable within 60 days once the distribution check arrives.

In terms of trustee-to-trustee transfer, an investor must contact the financial institution that handles their traditional IRA investments to transfer a specific amount directly to the Roth IRA’s trustee in a different financial situation.

The last option is for the same trustee transfer. What happens here is very straightforward — if the same financial institution handles both IRAs, the investor can transfer the amount from their traditional IRA to a new Roth IRA.

How Do I Open an IRA?

One of the most popular IRA frequently asked questions is about opening an IRA. Although there are many alternatives to choose from, setting up an IRA account is quite simple. Here is how to get started:

1. Choose Where to Open the IRA

Some choices include financial institutions such as banks, brokerage firms, and Robo-advisors. Brokerage firms offer full-service asset management, perfect for clients needing more time to check on their investments regularly.

For those who want a hands-off role in their IRAs, Robo advisors can take the wheel. They generally come with low management costs. Besides, investors can easily manage their investments through an online dashboard.

2. Select the IRA Type

There are two well-known IRA types, traditional and Roth IRAs. These two differ in the timing of tax deductions. Traditional IRA contributions are tax-deductible, while Roth IRA contributions are through past-tax income.

Other IRAs include SEP IRAs for self-employed professionals, SIMPLE IRAs for small business owners, and Payroll Deduction IRAs for those who want to contribute directly from their paychecks.

With all these IRA options, it would be best to talk to a financial counselor for more guidance regarding which type suits an investor’s financial capacity.

3. Open the IRA Account

Opening an account depends on the selected IRA advisor or provider. Investors can open their IRAs online if they take the DIY approach.

If they choose to team up with a bank or advisor, they would need to present either electronic or hard copies of the personal information required. This may include, but is not limited to, the following:

  • Personal data (name, contact number, SSS, etc.)
  • Government-issued ID
  • Banking information
  • Beneficiary Details
  • Preferred contribution method

4. Make Contributions to IRA

After setting up the IRA account, it is time to make contributions. Investors can accomplish this through rollovers, electronic payments, checks, or links from directly transferred funds.

Take note that there are limits on IRA contributions. For example, ages under 50 can contribute only up to 6,000 USD. People 50 years older are free to contribute up to 7,000 USD. Even though the money counts as income, the extra contributions will cost investors at tax time.

5. Start Investing

The investment choices a client makes in their accounts determine the level of risk and the rate of return of their IRAs. There is a wide selection of investment avenues one can choose from. There are bonds, stocks, index funds, mutual funds, precious metals, and many more.

This is where portfolio diversification comes in. Clients can choose one investment. They can decide as many as they like as long as it is within their risk appetite and financial capacity.

What Can I Invest In with my IRA?

The short and obvious answer here would be “a lot.” Any eligible client can invest in almost any type of financial security, like bonds, mutual funds, stocks, ETFs, and so on. Nowadays, precious metals are something most investors are trying to venture into.

However, as a general rule, life insurance contracts must not be included in an IRA plan. Also, collectibles, such as antiques, gems, and stamps, are prohibited.

While there is no one-size-fits-all approach, having basic asset allocation knowledge can save an individual from possible investment losses. This will help make sound financial decisions like how much to invest and when to stop.

Will I Get a Tax Deduction for my Contributions?

It heavily depends on the chosen IRA contribution. For instance, if one chooses a Roth IRA, the contributions may not be tax-deductible, but withdrawals are 100% tax-free. On the other hand, contributions on traditional IRAs may be tax deductible, depending on the modified/adjusted gross income and retirement plan at work.

In addition, taxpayers earning low-to-moderate income may qualify for the Saver’s Credit, which has a tax credit of up to 50% on every first 2,000 USD retirement savings contribution annually to a 401(k), IRA or other account types.

What is the Deadline for IRA Contributions?

The IRA contribution has the same deadline as the tax return deadline for any given tax year. It typically lands on the 15th of April. This makes traditional IRA tax breaks unique. Investors can take advantage of prominent tax deductions after every calendar year.

However, depending on which weekday the Tax Day falls, it can still differ. A good example here is the 2016 tax year. The deadline became the 18th of April, 3017.

Can I Contribute to an IRA Even If I Have a 401(k) at Work?

Of course! Investors can still contribute to the IRA even if they already have a 401(k) plan. Remember, traditional IRA contributions may not be deductible if investors do not meet the IRS’ income limitations.

In contrast, Roth IRA investors can take advantage of the long-term tax benefits. They are only limited by the IRA income limits — not participating in their employer’s retirement plan.

Under What Circumstances Could I Use my IRA Before Retirement?

Retirement investors can withdraw their IRA money without paying any fine once they turn 59 and a half years or older. However, there are a few peculiarities.

One commonly used exception is the capability to withdraw worth 10,000 USD for a first-time home purchase. This purchase does not necessarily mean the investor’s home. They can also use this exception when buying a home for their child.

Higher education expenses, such as college savings, are also applicable here. Investors can withdraw any amount from their IRAs to pay these expenses without penalty.

Aside from such reasons, one can make early withdrawals in their IRA when they become totally or permanently disabled. They can also pay for health insurance even if they are unemployed, on active duty, or military reservists.

Final Thoughts – IRA Frequently Asked Questions

Individual retirement accounts (IRAs) offer investors a superb opportunity to save on taxes. It is a clever financial strategy to minimize tax payments while growing one’s money.

There may be a lot of IRA frequently asked questions, but one thing is sure: setting aside money is the most certain way to save for retirement — especially if one knows how to take advantage of tax savings over time!

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