What Silver Coins Are IRA-eligible?

By Tim Schmidt - UPDATED: January 12, 2025

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Individual retirement accounts (IRAs) offer investors various opportunities to diversify their portfolios and grow their wealth. Among these, silver coins are a popular asset class known for their stability and steady growth.

However, the Internal Revenue Service (IRS) imposes specific guidelines that investors must follow, meaning not all silver coins are eligible for IRAs. In this guide, we'll explore the requirements established by this federal agency and walk you through the steps to set up a silver IRA. Let's get started!

----> I've also made a full guide here to all IRA eligible coins.  (All metals).

The Importance of Silver

First mined around 3,000 BCE in Anatolia, silver was incredibly important for many different nations, including Ancient Greece, to grow. It gradually became an essential trading component that would move across the European countries and the rest of the world through the Asian spice routes.

However, the events that unfolded following the arrival of Columbus in the Americas changed the face of this commodity. Between 1500 and 1800, mining exponentially increased, eventually spreading to other countries, including the United States.

By the last quarter of the 19th century, technological advancements and mineral exploitation led to a four times increase in extraction, bringing the production to 190 million ounces annually. While economics suggest that an increased supply leads to a price drop, this is not the case with silver, as with every year comes a greater demand for the commodity.

Since ancient times, people used silver as a barter for other goods before focusing on the production of coins, jewelry, and decorative elements. During the medieval ages, this commodity was a symbol of power and wealth, with the Romans believing it to drive away spirits and protect against the plague due to its antimicrobial properties.

Today, thousands of industries use silver because of its vast industrial applications. Since it's a great conductor of electricity, silver is the main component in producing electrical wires, electronics, solar panels, fuel cells, chemicals, medicines, and mirrors, among other things.

What Are IRAs?

An IRA is a retirement tax-advantaged account that allows investors to invest a portion of their income or savings to build wealth. It's a long-term investment strategy that uses the power of compounding interest to grow the value of your portfolio.

A self-directed IRA was first introduced in the United States in 1974 under the Employee Retirement Income Security Act (ERISA). This federal law aimed to protect people participating in employer-sponsored retirement and health plans. It encouraged American workers to save for their future while offering tax advantages.

Over the years, several legislations have made it profitable for individuals to open up self-directed IRAs. They increased the annual contribution limits and allowed investors to deduct the contributions from their taxable income.

According to the IRS, the contribution limit of a self-directed IRA in 2024 is $7,000 ($8,000 for those over the age of 50), a $500 increase since 2023.

What Are the Different Types of IRAs?

In the United States, IRAs have become the most popular investment option for many investors. Millions are taking advantage of the tax-deferred compounding growth these retirement accounts offer.

There are three main types of IRAs, each with different rules pertaining to eligibility, taxation, and withdrawals. These are as follows:

Traditional IRA

A traditional IRA is the most common type of self-directed individual retirement account that lets investors grow their money tax-deferred. Upon withdrawals, the IRS deducts applicable taxes according to that year's ordinary income tax rate.

Contributions in a traditional IRA are tax-deductible. If a person invests $4,000 in a retirement account, they must deduct their taxable income for the year by that amount.

Roth IRA

Unlike a traditional IRA, the contributions in a Roth individual retirement account are not tax deductible. An investor must fund the IRA with after-tax dollars, and since taxes have already been paid on that amount, the distributions or withdrawals are tax-free.

Another thing distinguishing a Roth IRA from a traditional self-directed individual retirement account is that the former doesn't have required minimum distributions (RMD). Investors don't have to withdraw the money if they don't need it, letting it grow tax-free. Also, account holders can continue to invest in the IRA as long as they have eligible earned income.

While the contribution limits imposed by the IRS on a Roth IRA are the same as those for a traditional individual retirement account, there are income limitations on the contributions. These vary according to the filing status and modified adjusted gross income (MAGI).

SEP IRA

A Simplified Employment Pension (SEP) IRA is similar to a traditional individual retirement account but includes contributions from the account holder's employer. It is aimed at self-employed individuals, independent contractors, freelancers, and small business owners.

Like traditional IRAs, a SEP plan is easy to set up and has low administrative costs. However, since it is an employer-sponsored retirement account, an employee cannot contribute to it.

Contributions in a SEP IRA are tax deductible, and the IRS may impose taxes upon withdrawals. That said, the maximum contribution that an employer can make is higher than what is allowed in traditional or Roth retirement accounts.

Why Should You Consider Silver for Your IRA?

Investors have many options to choose from when it comes to setting up a precious metals IRA, including gold, platinum, and palladium bullion and coins. It's essential to do thorough research before distributing your savings across multiple asset classes to minimize the impact of fluctuations on a retirement portfolio and ensure steady growth.

There are several reasons why investors prefer silver bars and coins in their IRAs, some of which include the following:

Silver Can Help Diversify

Putting all your savings in gold or any other asset class can be risky, as a drop in value can significantly affect your retirement account. It's essential to diversify and invest in different precious metals or financial instruments to reduce the impact of fluctuations on an investment portfolio.

Silver doesn't perform in the same way as traditional assets, such as stocks and bonds. It can help cushion the blow from economic uncertainty, balancing the losses of other financial instruments during a downturn.

Silver Is a Great Hedge Against Inflation

When the prices of goods and services rise, purchasing power declines, making it more expensive to afford the same items. To combat inflation, investors often allocate their money to various asset classes, including silver bars and coins. This strategy helps ensure financial security during a geopolitical crisis or market volatility.

Demand for Silver

The economic forces of demand and supply dictate the price of commodities, including silver bullion, coins, and rounds. While mining is on the rise, so is the need for these precious metals due to their vast industrial applications. Many industry experts anticipate continued growth in demand, leading to a steady rise in prices in the coming years.

Silver Is a Tangible Asset

Silver has a physical form and presence, unlike paper assets, such as stocks and bonds. You can touch and feel the commodity, which can be reassuring for investors.

A precious metals IRA lets you store physical silver in the form of bullion, coins, and rounds at an IRS-approved depository. It gives investors a sense of personal satisfaction knowing they own tangible assets.

Silver Is Recognized as a Store of Value

When a country's economy performs poorly, people lose confidence in the overall market. Due to uncertainty and fear, many investors park their money or savings in gold, palladium, platinum, and silver bullion, coins, and rounds. These asset classes retain or gain value during market volatility.

Silver Offers Additional Tax Advantages

Whether it's palladium bullion or silver coins, a precious metals IRA lets investors purchase these commodities using pre-tax dollars. Since you don't have to pay taxes on your initial investment, it'll grow tax-free over the years, ensuring greater growth potential of your retirement savings.

Silver Is Highly Liquid

Liquidity is crucial for investors. Unlike stocks and bonds, which can take several days to sell, silver is highly liquid, enabling IRA holders to sell their assets quickly and at a value close to the current market price. This flexibility is especially beneficial when you are in dire need of cash or want to adjust your retirement strategy.

What Are the IRS Requirements for Silver in an IRA?

Although silver offers many advantages to investors, it's important to remember that you can only purchase IRA-eligible silver for your retirement account. According to the IRS, there are some requirements that govern a precious metals IRA, and these include the following:

• Purity: An investor can only purchase silver with at least 99.9% purity for their self-directed IRA.
• Storage: The IRS requires investors to store their silver bars, coins, and rounds at an approved depository. While many IRA companies, through loopholes, allow account holders to keep the precious metals at their homes, it's illegal, and the IRS will treat it as an early withdrawal, leading to hefty penalties.
• Mint: You can only purchase silver bars and coins that are minted by a refiner, assayer, or manufacturer certified by the national mint or government.
• Non-collectibles: While collectible coins may be worth much more than their intrinsic value, making them a great investment option, they are not IRA-eligible. You can only purchase silver bullion, coins, and rounds that are produced by a national or government-certified manufacturer.

What Silver Coins Are IRA-eligible?

Silver bars and coins that meet the eligibility requirements set by the IRS are eligible for purchase in an IRA. Some of these include the following:

• Canadian Silver Maple Leaf Coins
• American Silver Eagle
• Austrian Silver Philharmonic
• British Silver Britannia
• Australian Silver Kookaburra
• Mexican Silver Libertad
• Chinese Silver Panda Coins
• Royal Canadian Mint Silver Bars
• Johnson Matthey Silver Bars
• Australian Silver Lunar Goat Coin
• SilverTowne Liberty Bell Stackable Silver Rounds
• SilverTowne Buffalo Stackable Silver Rounds
• Sunshine Morgan Silver Rounds
• SilverTowne Prospector Silver Bar
• Somalia Silver Elephant Coin
• Scottsdale Silver Reserve Round
• Engelhard Silver Bar

Besides the abovementioned IRA-eligible silver bars and coins, there are many more options for retirement account holders to consider. However, before investing in any precious metals, it's crucial to ensure that they meet the requirements set by the IRS.

How to Open a Silver IRA

If you're looking to diversify your retirement portfolio and want to open up a silver IRA, here are the steps to follow:

Choose a Trustee

You can set up an individual retirement account by working with an approved and reliable trustee. It's a company that manages your self-directed IRA, allowing you to invest and adjust your investment strategy.

That said, not all trustees are the same. Some may charge exorbitant administrative fees, while others may not have a good track record. Due diligence is important to ensure that you're working with the right company. Check out its credentials before calling its representative with further inquiries.

Open an IRA

After thoroughly researching the right IRA company, it's time to approach the provider to set up an account. The representative of the approved trustee will provide forms requiring the following information:

• Name
• Address
• Social Security Number

Besides filling out the necessary forms, you may need to provide proof of identity (driver's license or passport) and financial documents. During this entire process, the representative will be around to guide you and ensure a smooth experience.

Fund the Account

After the trustee sets up your account, you will be provided with the credentials to access it. To start investing, you need to fund the IRA. There are several ways to deposit money into your newly opened retirement account, and these include the following:

1. Cash Contributions

This is by far the easiest way to fund your IRA. You can make cash contributions annually or set a flexible schedule for recurring payments. There are no restrictions to the number of deposits as long as you're within the annual contribution limits set by the IRS.

2. Rollover

If you have a 401(k) or a traditional IRA and wish to transfer some funds to your newly set up precious metals IRA, you may want to consider a rollover. This is often common among professionals who change their companies and are looking to take money out of their employer-sponsored retirement plan.

There are two ways to go about a rollover, and these are as follows:

• Direct rollover: Investors can let the two institutions handle the rollover. They need to inform the representatives of their existing IRA to initiate the transfer of funds.
• Indirect rollover: While a direct rollover is the most convenient, some investors may want to handle the entire process themselves to ensure peace of mind. They can do that by temporarily withdrawing the funds from their existing retirement accounts and depositing the money into the precious metals IRA. An indirect rollover must be executed within 60 days to avoid hefty penalties and taxes.

<<< Read My Complete Guide on How to Convert Your IRA to Precious Metals >>>

3. Transfer

A transfer involves moving funds from one IRA to another. While it may seem similar to a rollover, it's completely different. The account status is the same in a transfer, but the financial institution is different. For example, if you don't like your current trustee's high administrative fees or need more investment options, you can have your funds transferred to another IRS-approved company.

Simply put, a transfer involves moving funds from your existing precious metals IRA to a newly set up one at a different institution. All you need to do is to contact your current provider to request a trustee-to-trustee transfer.

Buy or Invest in Silver

Now that you've funded your precious metals account, it's time to purchase IRA-eligible silver bullion, coins, and bars. The trustee will provide you with a list of silver investment products that qualify and meet the IRS requirements.

Many investors like to work with custodians who are also precious metal dealers. This allows for direct purchasing. However, not all trustees are sellers, and you would need to reach out to a third party for investment products.

A key thing to remember is that once you purchase silver bars or coins, you must store them at an IRA-approved depository. Typically, the custodian might offer these services in-house or guide you to a third-party company.

Monitor Your Portfolio

Buying silver for your retirement savings portfolio is just the beginning of your investment journey. You must monitor your assets, assess the economic and geopolitical situation, and adjust your strategy accordingly.

Final Thoughts on Silver Coins in an IRA

Silver bars and coins can be a great addition to your IRA. They can cushion the blows from an uncertain economy, balance the losses during market volatility, and provide liquidity when you need cash.

However, we only recommend allocating up to 10% of your retirement portfolio to precious metals. This is because, while silver may offer stability, stocks, bonds, and other traditional financial assets provide greater potential for long-term growth and diversification.

Before making any investment decisions, it's essential to consider your long-term portfolio strategy, financial goals, and risk tolerance!