Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium. Investing in a gold IRA requires the services of a custodian bank, a broker to purchase gold, and an approved depositary to store gold. Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. Many people who open gold IRAs use funds from another IRA to do so, but it’s not a good idea to convert your entire nest egg into a gold IRA.
The rules for withdrawals (selling the gold for cash) depend on whether the gold IRA is a traditional or a Roth IRA. Gold IRAs are usually defined as “alternative investments,” meaning that they are not traded on a public stock exchange and require specialized expertise to value them. Given that you can also hold silver coins or gold bars, platinum, and palladium in a gold IRA, the correct term is technically “precious metal IRA.” To comply with the many regulations surrounding gold IRAs, you can’t store your gold at home or in a safe deposit box.
To set up a Gold IRA, you’ll need to work with a Gold IRA company to set up an account and buy the precious metals of your choice to fund it. In addition to the account depository, the Gold IRA Company coordinates the tasks of the custodian, the facility where the precious metals in your IRA are physically stored. Most gold IRA companies recommend or require that you work with a specific custodian and custodian, although some give you a choice of two or more. If this isn’t a priority for you, there are other ways to add precious metals exposure to your portfolio in addition to a gold IRA.
With a traditional IRA or other retirement account, you can invest in gold through the stock market by buying stocks in mining companies or mutual funds that hold those stocks. You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able to recommend one for you). Many of the custodians and brokers that open established IRAs that invest in traditional assets are unable to open and operate an SDIRA, including a gold IRA. The gold in a gold IRA must be stored in an IRS-approved depot. You can’t store it in a safe, a house safe, or under your mattress.
Surprisingly, a gold IRA doesn’t just have to hold gold, you don’t have to hold any gold in one at all. Popular gold IRA companies include Orion Metal Exchange, Birch Gold Group, Red Rock Secured, Gold Alliance, Oxford Gold Group, and Goldco.
