Secure Act Inherited IRA

Tax Planning in Retirement

I opened a traditional individual retirement account (IRA) to save my hard-earned money for retirement. I knew that with IRAs, I could grow my assets in a tax-advantaged way.

In the future, someone can inherit my investments following the Secure Act Inherited IRA.

However, I wanted to diversify my investments to achieve the most stable portfolio. It is why I invested in a Precious Metals IRA.

A Precious Metals IRA is a self-directed account that allows one to invest in assets like gold, silver, platinum, and other approved metals. It might be an excellent choice to avoid depending on paper assets alone.

At first, it might seem daunting to invest in a Precious Metals IRA. The key is finding a reputable plan provider that best suits individual needs.

1. Augusta Precious Metals

www.augustapreciousmetals.com

Star Rating

Augusta Precious Metals provides top-quality precious metals and specialized self-directed IRAs. The company started operations in 2012 and commits itself to its customers’ peace of mind and financial growth.

They offer cash purchases for precious physical metals with a minimum order of 50,000 USD. Their more popular offerings involve using gold or silver to fund a self-directed IRA.

Contact their in-house specialists to start opening an account. They will assign an IRA custodian from Equity Trust, a trusted company with over four decades of experience.

Funds for an IRA under Augusta Precious Metals can come from a rollover from an existing retirement account. After making an initial investment, account holders can buy gold and silver coins or bullion to maintain their accounts.

Augusta Precious Metals offers a wide range of coins and bullions like American Eagles, Canadian Maple Leaves, 10oz Gold Bar, 10oz Silver Bar, etc.

The company boasts high ratings from the Business Consumer Alliance and the Better Business Bureau. Augusta Precious Metals also stores customers’ assets in the Delaware Depository, which is highly secure and IRS-compliant.

Another layer of protection comes from all-risk insurance worth 1,000,000,000 USD from Lloyd’s of London. It assures customers that their gold and silver assets are safe and secure.

Pros

    • Augusta Precious Metals values customer education, and they have a Harvard-trained specialist on board. Specialists can help you determine the best way to manage your precious metals IRA.
    • The company offers low annual, set-up, and maintenance fees compared to its competitors. There is a one-time fee of 250 USD and 200 USD each year.
    • They offer a Gold Buy-Back program, should you wish to liquidate your gold. While you always have the option of selling it on your own, their program ensures you have a buyer with comparable rates.
    • Their workflow is streamlined, and they assign a personal custodian to help with your concerns during your account opening, funding, and maintenance.

Cons

    • Augusta Precious Metals requires a 50,000 USD initial investment when opening a precious metals IRA. Compared to other companies that offer a 20,000 USD initial investment, it might seem like a large sum.
    • The company does not offer palladium or platinum for physical purchase and IRA investment. Some competitors might provide a more extensive selection of precious metals than Augusta Precious Metals.

2. Goldco Precious Metals

www.goldco.com

Star Rating

Goldco Precious Metals remains one of the longest-standing self-directed IRA providers in America. The company began operating in 2006 and is one of the US’s most respected precious metals IRA providers.

They offer gold, silver, platinum, and palladium investments for purchase within an IRA account. Potential customers may request an informational kit from their website, free-of-charge.

They have specialists ready to guide clients through the process of opening and to maintain a precious metals IRA. To kickstart the account, clients should contact specialists or sign-up through their website.

To fund an account with Goldco, you can roll over existing TSP, 401(k), 403(b), and savings accounts. You can also purchase physical gold and silver through their order desk.

After funding the new IRA with an existing account of your choice, you can now invest in precious metals that only Goldco offers. Their clients need not feel overwhelmed, as they have specialists that can provide counsel and education every step of the way.

Goldco provides many storage options, including the Delaware Depository, the International Depository Services Group in Texas, and Brinks Salt Lake City. Each option is IRS-compliant and secure.

The company received glowing reviews from the Business Consumer Alliance, the Better Business Bureau, and recognition from the Stevie Awards and INC 5000.

Pros

    • Unlike its competitors, the company offers palladium and platinum options to fund your IRA. These investments can be delivered to you or stored in your chosen depository.
    • Goldco BuyBack Guarantee provides one of the highest rates in the market. If you wish to sell your precious metals, they can buy them from you at one of the largest sums possible.
    • The company offers exclusive promotions for its new customers. For instance, they offer 10% Free Silver Depending on your initial investment. If you invest 100,000 USD, you can receive 10,000 USD worth of free silver.
    • Goldco is a reputable company that has been in business since 2006. It is one of the US’s oldest and most well-known precious metals IRA providers.

Cons

    • Goldco is not as transparent with its fees. You must call a representative or specialist to learn how much you will pay annually and set up your account.
    • The company requires a 50,000 USD initial investment when opening an IRA. They also have high minimum order rates when purchasing physical silver or gold.

3. American Harford Gold

www.americanhartfordgold.com

Star Rating

American Hartford Gold is a family-owned organization operating in Los Angeles, California. It was established in 2015 with a mission to help clientele expand their portfolios through precious metals IRA.

They offer platinum, gold, and silver, which you can purchase within an IRA or for personal storage. The company believes these precious metals are safe-haven assets that balance an investment portfolio. It can help an investor become more financially stable.

They offer an AHG Gold IRA that allows you to invest in gold bars and coins within your account. They accept traditional and Roth IRA, TSP, 401(k) and 403(b), and other savings plans to fund your new account.

The process is simple: contact their specialists and fill out paperwork, transfer funds to your new account, and select which precious metals to include.

American Hartford Gold provides dependable customer service if a client is unsure what precious metal to buy. They can provide insight regarding the metal that best suits a customer’s needs.

A distinct feature of this company is its support for charitable organizations in the country. American Hartford Gold supports A Place Called Home, the Wounded Warrior Project, The Claire Foundation, Our House, and No Kill Los Angeles.

Pros

    • American Hartford Gold has a lower minimum investment than other precious metals IRA providers. It is excellent news for those who wish to open gold or silver IRAs with minimal risk.
    • A Price Match Guarantee from the company ensures they will match or go even lower than a competitor’s pricing. With this feature, you can save as much as 30% on participating gold and silver products.
    • American Hartford Gold boasts its 100% free IRA rollover process. It guarantees free storage, insurance, and maintenance of your assets for up to 3 years.
    • They offer free shipping deals for physical gold and silver purchases, all of which are insured and registered. The company also provides big freebies on selected products.

Cons

    • American Hartford Gold requires high annual fees, 75 USD to 125 USD, and storage fees of about 100 USD. It may be a steep price to maintain an IRA.
    • American Hartford Gold does not ship outside the United States for purchases outside an IRA. It might complicate things for interested clients abroad.

4. Birch Gold Group

www.birchgold.com

Star Rating

Birch Gold Group believes in providing quality education to its customers to ensure they make the best decisions regarding their investments. They pride themselves on transparency and efficiency as a company.

They offer precious metals such as gold, silver, palladium, and platinum. However, their main product is a precious metals IRA, which customers can avail of in 4 simple steps.

First, customers must pick where to source their funds for the new account. Birch Gold Group accepts traditional, Roth, SEP, SIMPLE IRAs, and other retirement plans for rollover.

Afterward, clients choose what precious metals — gold, silver, palladium, platinum — to buy within their IRA. After the purchase, the assets are stored in a secure and insured depository like Brink’s Global Service or Delaware Depository.

With the account ready, all the customer has to do is monitor the performance of the IRA. If there are questions or concerns, an in-house precious metals specialist can attend to your matters.

These capable specialists come from past posts in IBM, Dun & Bradstreet, and other large companies. Birch Gold Group trains its professionals to put the client first so that one can expect speedy customer service from this company.

Birch Gold Group also boasts high ratings from the Better Business Bureau, Business Consumer Alliance, and Consumer Affairs.

Pros

    • The company is highly transparent with pricing and fees, accessible through representatives or on the website. It protects customers from sudden price changes and hidden fees.
    • Birch Gold Group offers discounts and free shipping promotions on physical purchases of precious metals outside an IRA. It makes buying gold and silver easier for potential clients.
    • Birch Gold Group requires only a 10,000 USD minimum investment to open a precious metals IRA, which is fair compared to the 50,000 USD of other companies.
    • The company offers a broader range of precious metals products that customers can include in their IRAs. It is a feature that not many companies possess.

Cons

    • Birch Gold Group might not be an ideal choice if you want to purchase a couple of thousand dollars worth of precious metals. They require a 10,000 USD minimum order.
    • While customers can call in-house specialists quickly, the IRA custodian provides limited contact. However, the company will still coordinate with the custodian on important transactions.

The SECURE Act

The SECURE Act, which stands for Setting Every Community Up for Retirement Enhancement Act, determines how and when an IRA inheritor can distribute funds.

The SECURE Act applied to IRA providers on January 1, 2020.

It also aims to increase the accessibility of IRAs for individuals like small-business owners and part-time workers by providing affordable and convenient plans. The act also added possible annuity options for 401k accounts.

The SECURE Act Inherited IRA mandated a few fundamental changes to existing policies. Instead of allowing an IRA inheritor to stretch their withdrawals throughout their lifespan, they should withdraw all funds within ten years of the original owner’s passing.

It also changed the required minimum distributions (RMDs) from 70 ½ to 72.

Ownership/Distribution Options

The SECURE Act distinguished the different beneficiary categories, each with specific ownership and distribution rules.

Spouse

A surviving spouse counts as an eligible designated beneficiary (EDB) for IRAs. If a late husband has their widow as their beneficiary, she has multiple options. She can treat the inherited IRA as her own by naming herself the owner.

She could also roll the inherited account into a Precious Metals IRA or another qualified plan. Should she choose to distribute the assets, she can utilize the 10-year or single life expectancy rule.

Non-spouse-eligible designated beneficiaries

EDB also covers chronically ill or disabled inheritors, a child of the original owner who is still a minor, and an individual who is at most ten years younger than the original owner.

The Internal Revenue Code determines the qualifications for chronically ill and disabled beneficiaries.

A chronically ill or disabled beneficiary can distribute their inherited assets through the 10-year or single life expectancy rule.

A minor child can take distributions with the single life expectancy option. When they reach the age of majority, they must take distributions within ten years.

A non-spouse inheritor who does not fit the specifications above and is ten years younger than the original owner may choose the 10-year or single life expectancy option.

Non-eligible designated beneficiaries

A non-spouse individual who does not meet the above mentioned categories counts as a designated beneficiary (DB). For example, an IRA beneficiary who is at the age of majority counts as a DB. Some trusts, like funds with one beneficiary, also qualify as DBs.

Inheritors under this category cannot take ownership of the IRA. Due to the SECURE Act, DBs cannot elect the single life expectancy option. Instead, they must take distributions under the 10-year rule.

Non-designated beneficiaries

Non-qualified trust funds, charitable organizations, and estates categorize as non-designated beneficiaries. This classification includes beneficiaries without life expectancies and non-individual IRA inheritors.

Distribution options for this category depend on when the original owner passed away. The beneficiary should distribute the account’s assets within five years if they expire before their required beginning date.

If they pass after their required beginning date, the beneficiary shall continue taking distributions using the original owner’s calculated single life expectancy.

Converting a Pre-Tax Retirement Account to an Inherited Roth IRA

By transferring funds from an existing pre-tax account, one can convert it to a Roth IRA. Take note that each version has minimum investments depending on the plan administrator. 

Pre-tax account owners enjoy tax-advantaged contributions, while Roth IRA holders contribute with after-tax dollars. Although Roth IRAs require taxes on contributions, investors can enjoy tax-free withdrawals later. 

Thus, many opt to convert their pre-tax retirement account to an inherited Roth IRA. Often, opening a Roth IRA includes a form to determine one’s beneficiaries, making it an inherited account in the future.

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What Is the Inherited IRA 10-Year Rule?

The IRA inheritor must follow specific SECURE Act policies. It depends on categorization and resulting ownership and distribution rules.

Non-spouse EDBs and non-eligible designated beneficiaries must withdraw all funds from the inherited IRA within ten years of the original owner’s death. The policy above is called the Inherited IRA 10-Year Rule.

Another option some plan administrators provide is to distribute the entire account balance by the tenth year after the original owner’s death. It lets the account grow before the assets are withdrawn at the end of the ten years.

Only individuals who inherited an IRA exactly on or after January 1, 2020 must follow the 10-year rule.

Exceptions to the Inherited IRA 10-Year Rule 

Surviving spouses who inherited an IRA from their late partner can treat the inherited IRA as their own or elect either the 10-year or single life expectancy option.

The late IRA owner’s minor child also receives payments until they reach the age of majority. After a certain age, they must take distributions within ten years. 

Beneficiaries younger than the original IRA holder by ten years can also choose whether to elect the single life expectancy or 10-year option.

Tax Considerations of the IRA 10-Year Rule

Taking distributions from an inherited traditional IRA means incurring tax from each withdrawal. If one opts to empty the inherited account at the end of ten years, they would still incur a hefty tax from that withdrawal.

Taking equal distributions over time also requires one to pay taxes from each withdrawal. One could also reinvest these distributions into smaller contributions, resulting in lower taxes. 

For inherited Precious Metals IRAs, it is ideal to consult plan providers about the next step. One could sell the inherited precious metals or keep them as an investment. Another option is to reposition the inherited IRA into a different form of precious metals IRA to diversify the

Final Thoughts – Secure Act Inherited IRA

Wanting to leave something behind for your loved ones is only natural. 

Understanding the technicalities of the SECURE Act Inherited IRA is vital. That way, you can ensure your loved ones benefit from your hard-earned assets in the most tax-efficient way possible. 

It might be an excellent choice to choose a plan provider that can assess and cater to your needs, like Augusta Precious Metals. You can expect hands-on experience with them when setting up, maintaining, and liquidating your account. They are a reputable company that can help preserve and grow your wealth for generations.

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