IRA Approved Silver: Advantages & Disadvantages

As a new investor in the precious metals market, you might be interested in knowing what an IRA approved silver is. A silver IRA refers to a particular category of a retirement account. This type of account enables the investor to channelize the funds in eligible silver bars and coins. 

IRA-eligible silver helps in diversifying your portfolio but beware of the pros and cons before you channelize your funds in this domain. These aspects will be talked about in detail in this post so keep reading.

What Is IRA Approved Silver?

You might be familiar with the conventional IRAs. It can be opened at popular brokerage firms such as Schwab or Fidelity. Most investors have accounts in these firms as it helps them to channelize their money to purchase mutual funds, bonds, and stocks. These are known as paper assets

There’s also a less familiar option called a self-directed IRA which many people aren’t aware of. When it comes to tax advantages, these accounts offer the same benefits as the conventional ones. Besides, you need to follow the same guidelines as applicable in any type of IRA. 

A material difference between the two is that you would be managing the investments yourself in a self-directed IRA. When you invest in an IRA approved silver bar, your menu of investments is not limited to the offerings of the broker, and you may select anything that comes into your account. 

Interestingly, the options contain different hard assets that one can touch or see which include platinum, silver, gold, businesses, real estate, and palladium. A simple answer towhat is IRA approved silver is that it is an IRA where the account holds silver investment.

When you invest in IRA approved silver, the same rules apply as those in other IRAs. The only difference is that the investor can add precious metals such as silver into their accounts. On the contrary, the focus in regular IRAs largely lies on different paper assets and stocks. 

What Does an IRA Approved Silver Mean?

Although the IRS permits individuals to put silver into an IRA, not every type of silver can qualify for this purpose. The silver that is approved for IRA rollover custodian must fulfill certain requirements, including certain specific attributes like:

  • To qualify for an IRA, the silver needs to be at least 99.9% pure.
  •  IRA approved silver rounds and bars need to be fabricated by an ISO 9000 approved manufacturer, NYMEX, or COMEX to ensure acceptance.
  •  It’s not possible to grade-proof coins. These coins should be available in the actual Mint packaging. The Certificate of Authenticity should be available as well.

What Type of Silver Can an IRA Include?

You need to keep silver in Self-Directed IRAs. Similar to a traditional IRA, self-directed IRAs allow you to look beyond the traditional assets. Here are the IRA approved silver coins that investors should know:

  • American Eagle Proof Coins: American Eagle Proof Coins refer to a unique collection of silver coins approved by the IRA. Its benefits are far more than just its weight. Compared to other bullion assets, they have a lower mintage.
  • American Eagle Bullion Coins, 1 Ounce: This is a beautiful classic American silver coin. It is the only IRA approved silver bullion coin that the US government completely supports, thanks to its purity, weight, and content.  
  • Austrian Philharmonic Coins: It was in 2008 that the Gold Philharmonic coin started to become available in silver. The Silver Austrian Philharmonic coin currently serves as a classic alternative to its gold form.
  • Australian Kookaburra Coins: The design of Kookaburra Coins changes every year, just like the Gold Kangaroo or Nugget coins of Australia. The silver Kookaburra coins are presently available in four denominations in terms of weight, including: 1 Kilogram, 10 ounces, 2 ounces, and 1 ounce. All these options are silver IRA approved coins.
  • Canadian Maple Leaf Coins: Canadian Maple Leaf Coins have 0.9999% pure silver in them and is presently one of the purest silver coins in the world.
  • Mexican Silver Libertad Coins, 1 Ounce: This series of silver coins are produced by the Mexican government at the oldest North or South American mint, La Casa de Moneda de México.
  • Silver bars: In addition to the above list of coins, you also have some IRA approved silver bars. These bars are eligible to be included in the IRA, such as Johnson Matthey and Royal Canadian Mint. In case you are looking to diversify your portfolio, you can opt for these IRA approved silver bars.

Types Of Silver That IRA Does Not Include

Although you have several IRA approved silver coins, bars, and rounds, there are some exclusions that you should be aware of. Here are some examples of silver products that the IRA steers clear from:

  • Silver that the investor already owns
  • Certified silver available from a third-party grading service

The reason for these exclusions is that a lot of silver products coming from different parts of the world fail to qualify in terms of purity. Investors can reach out to approve refiners or mints if they want their pure bars approved.

IRA Approved Silver Bars

There are four types of IRA approved silver bars to invest in:

  • 1 ounce of Silver Bars
  • 10 ounces of Silver Bars
  • 1 Kilo of Silver Bars
  • 100 ounces of Silver Bars

IRA Approved Silver Rounds

Investors have three types of IRA approved silver rounds to put their money on:

  • Sunshine Silver Rounds
  • Golden State Mint Silver Rounds
  • SilverTowne Silver Rounds

These are silver bars approved for precious metals by the IRA, which you can purchase at the custodian.

Why Should You Add Silver to Your Retirement Portfolio?

It makes sense to add IRA eligible silver to your retirement portfolio given its numerous benefits, which are discussed below: 

  • Silver is tangible (just like gold), and it’s different from paper assets such as mutual funds, bonds, and stocks.
  • Silver’s market value has grown significantly over the last few years. Statistics reveal that silver prices spiked by 473% between September 1st, 2000, and September 1st, 2020.
  • Silver is cheaper than gold and given its affordability, it might be logical to invest in silver rather than gold. Silver has historically been one of the most affordable metals in the precious metals category.
  • The history of silver is indeed long. It was in the third century BC that the first silver coins were minted by the Romans and for thousands of years, silver coins were used for transactions.

Remember that it’s not possible to keep poured silver IRA approved products at home when you house them at an IRA. You need to choose an IRS approved depository to hold your silver. You can store the precious metals at your residence when it’s time to take the IRA distributions.

Pros of a Silver IRA

Cons of a Silver IRA

  • Protects investment account from inflation
  • Returns are limited to capital gains
  • Diversifies your portfolio
  • Limitations in silver IRA custody

What Are the Benefits Of A Silver IRA?

It’s imperative to know that a silver IRA brings you every benefit that a traditional IRA does. When you think of a self-directed IRA, it can either be a Roth IRA or a traditional one. Pre-tax dollars are used to fund the account in case of a traditional IRA. 

You need to shell out income taxes at the time of retirement when you draw the money from your account. On the contrary, no immediate tax saving is possible if you invest in a Roth IRA because you need post-tax dollars to fund a Roth IRA. One can draw the money during retirement free of tax, however.

Your investments would grow free of tax when it’s in your account in both these types of IRAs. Even if you decide to sell the silver, you would not be taxed so long as the silver IRA is profitable. The Internal Revenue Service has set several limits to contributions that one can make every year. 

Some conditions apply to the usual limits. The annual limit for IRA eligible silver in 2018 was $5,500. If you are above 50 years of age, the upper limit is $6,500. In 2019, these limits increased by $500.

In addition to the above benefits, there are two more advantages of a silver IRA to be mindful of.

Silver IRA Can Protect Your Investment from Inflation and Chaos

These assets are secure and can provide you with adequate protection against economic volatility and inflation. Currency values are susceptible to decline over time. If you were to skim through historic records, the value of silver has continually risen. 

In the last century, investors have yielded tenfold returns from silver dollars. On the other hand, the paper dollars have witnessed more than a 90% decline. 

When you invest in an asset from the IRA approved silver refiners list, it indicates that you are securing your savings for retirement. It will also shield you from currency declines, which may arise because of chaos and inflation. An intelligent investment can secure your purchasing power in the future.

IRA Approved Silver Can Help You Diversify Your Portfolio

Most of the IRAs are based on bonds or stocks, which are paper assets. This implies that these are prone to risks in polaristic markets. Silver can hold its value throughout the years. 

Investing in silver implies you can eventually ditch the instability of paper assets as the metal does not lose its value, in the event the stock market crashes. When you ideally diversify your portfolio with an IRA approved silver bar or coins, you would remain immune to a market downturn or crash.

The reason we recommend silver to diversify your portfolio is that it shares a weak correlation with other financial market items. Under different conditions in the market, the asset would perform in its own way and grow your investment comprehensively. 

In addition to investing in IRA eligible silver coins or bars, one can also invest in mutual funds. Some of the other options include exchange-traded funds that invest in silver mining stocks, silver, and silver options in the IRA. 

The annual fees associated with such funds will be lower than what you’d have to shell out in case you directly owned the metal because the investors would not be incur any costs on insurance or storage.

Disadvantages Of IRA Approved Silver

Although IRA approved silver bullion looks lucrative, you need to be aware of its cons. Here are some disadvantages to invest in IRA approved silver:

Your Returns Would Be Limited to Capital Gains

You should understand that investing in silver would not help you leverage your assets through interests, rents, or dividends. This might be a major drawback for investors looking for a regular inflow of funds. When you invest your funds in stocks, you may get the annual dividend credited to your account and your money will grow and will be free from tax once retirement starts. 

You would enjoy the advantages of compounding and reinvesting the amount that would maximize your interest. In the event of the stock investments, you can benefit significantly from the compounding effect that is often referred to as the eighth wonder of the world. When you invest in IRA approved silver bullion, you would enjoy capital gains as the prices of silver soar. This increment is not guaranteed though, just like any type of investment. 

In the case of a traditional IRA, you need to start taking minimum distributions by the time you reach seventy years old. The only option to benefit from investments in silver is to make capital gains during price appreciations. 

If you need additional funds, you’d have to sell off the silver altogether and the sale price would be lower than the acquisition cost if the price of silver is running low during the liquidation process. 

Limitations In Silver IRA Custody

IRA approved silver rounds are undoubtedly an attractive avenue for a plethora of investors as they can grow a tangible and real asset. The truth is investors cannot purchase silver themselves by simply showing their coins because keeping them safely in a deposit box won’t cut it. 

It is also not possible to contribute to your retirement account with the silver you already own. It is imperative to bank on an account custodian to channel the decisions regarding your investments because you are susceptible to the risk of counterparty through fraud or theft.

Custodians negate the troubles of purchasing silver. You would be free from the hassles of transporting your bullion physically or storing them. The custodians would securely store the coins, and you would get a third-party licensed and insured vault for storage. As an investor, you would never be able to see the metal. It’s a psychological downside that you wouldn’t see or touch the metal you’re investing in. 

The Commodity Futures Trading Commission of the US came up with a listing on their web page, where certain common frauds involving precious metals are mentioned. Once you educate yourself about these scams, you can steer clear of these threats. Simply put, you need to count on an established custodian and silver dealer to store your IRA approved silver bars.

Be Informed About Fees and Charges

It’s easy to open an account for an IRA approved silver after you select an established custodian, all you need to do is fill out some forms. You’d have to fund the IRA approved silver bullion you would own. 

Investors are allowed to roll over their existing plan or 401(k). If you structure the scheme as a direct rollover, it would be free from penalties and taxes. You would need to annually shell out anywhere between $500 and $250 as storage and administration fees.

This amount largely depends on the quality of your storage facility as well as its location. The ‘spread’ involves a significant expense, which may range between 17% and 33%. The percentage depends on the rates at which the company would purchase or sell the IRA approved silver rounds.


An investment for your retirement days should be all set, so make sure you balance your portfolio according to the right type of assets. Having learned what an IRA approved silver is and its advantages and disadvantages are, it’s time you go ahead with your investment. 

Remember that you have four IRA approved silver bars and three IRA approved silver rounds to choose from. You need to choose the right custodian and dealer to purchase the silver.