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Be careful with 'collectibles'
Before doing anything exotic with your IRA, make sure it's allowed by the IRS -- because many investments aren't. Generally, the tax agency bars investment in what are known as "collectibles." These include:
- Alcoholic beverages.
- Any coins that aren't specifically allowed.
All of this means that if you use a traditional IRA to invest in collectibles, "the amount invested is considered distributed to you in the year invested," according to IRS guidelines. Translation: It's taxable.
Furthermore: "You may have to pay the 10 percent additional tax on early distributions," the IRS warns.
For more information on IRA investments, read IRS publications 590-A and 590-B.