A gold IRA is a type of self-directed IRA that allows you to invest in gold bars for retirement. In a regular IRA, you can’t own physical gold, although you can invest in a wide variety of assets that are invested in gold, such as gold stocks or gold ETFs. Not all gold investments can belong to an IRA. The basic rule is that an IRA cannot own a collectible, and precious metals are defined as collectibles, regardless of whether the investment is in gold bars or coins. Luckily, there are exceptions to the general rule for gold, silver, platinum, and palladium, which are held in specific forms.
If you want to hold physical gold in an IRA, it can’t be your regular account. It must be a separate, special IRA, called a Gold IRA. Not only can you contribute to an employer-sponsored 401 (k), but you can also contribute to a Roth IRA, a traditional IRA, or a self-directed Roth IRA. As the court found, external deposit managers advertised that their customers could physically take possession of the coins purchased from IRAs.
Those with specific interests and knowledge to make these investments can also make targeted investments to benefit from timing and other events that can increase the value of their IRA accounts. If any of the above IRA-eligible gold coins or bars have been assessed for condition by a certification authority (such as the Professional Coin Grading Service), they are generally classified as “collectibles” by the IRS and are therefore not allowed in IRAs. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank. However, to qualify for gold IRAs, custodians must be insured, which protects your investment as long as your account does not exceed the account value specified by the custodian bank.
It may be better to invest your IRA in a precious metals ETF or own precious metals in a taxable account. Roth Gold IRAs are self-managed IRAs with after-tax contributions, which postpone the tax benefit until after you retire. So if your portfolio consists of both gold and paper investments, a loss on the gold side is offset by the gain in other assets. Coins minted by the Treasury for their retirement accounts and store them in person, evading custody fees and storage fees.
Storing your IRA gold at home can be considered a distribution, meaning you lose your tax-deferred benefits and could be punished with a fine if you’re under 59½ years of age. If the custodian bank is unable to store gold coins, it can contract this service with third parties. This leads to the conclusion that only gold bars — and not gold coins — must remain in the possession of the trustee. One option is to set up a self-directed gold IRA, which allows you to buy physical gold and silver with retirement funds.
