Gold IRAs appeal to investors who want a diversified retirement portfolio. 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. To invest in gold with an IRA, you must follow two IRS guidelines.
First, you can only invest in IRS-approved gold. While the list of approved options is changing, the IRS says it must be “highly refined precious metal.” While the price of gold rose to new highs over the summer, you’ve probably seen a number of ads recommending investing in gold via an IRA. They sell gold coins, gold bars, and the like, but they don’t offer IRA investment advice (regardless of what their websites or other marketing materials might suggest).
Many Gold IRA companies have preferred custodian banks that they either recommend or require their customers to use, or you can search for a custodian on the RITA website. Whether you’re planning to start a Gold IRA from scratch or extend your current retirement account, the process starts with creating a self-directed IRA. If you’re not sure whether a gold IRA or a silver IRA is right for you, contact a fee-based financial planner who isn’t affiliated with a gold IRA company to determine whether it would be a good addition to your portfolio. IRS rules allow funding a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan.
One important rule to know about storing physical gold in an IRA is that your precious metals MUST be stored at an approved depository institution such as the Delaware Depository Service Company or Brink’s Global Services, not in your home or in a safe. There are plenty of rules and regulatory hurdles that you’ll need to overcome if you’re thinking about buying a Gold IRA. Self-directed IRAs, of which gold IRAs are one type, have the same contribution and distribution limits, which depend on your age, as traditional IRAs. Because of these attractive features, many investors are wondering whether they can gold physical gold in their individual retirement account (IRA).
Unlike gold ETFs or gold company stocks, a precious metal IRA allows you to hold the physical precious metals in accordance with IRS regulations. An IRA backed by gold allows investors to invest their money in a wider variety of assets, but they are still subject to the same contribution limits as traditional retirement accounts. A gold IRA can give you the tax benefits of a traditional retirement account, but you must comply with IRS regulations or risk fines and penalties. People who believe that physically owning gold or other precious metals is safer can achieve that peace of mind with a gold or silver IRA.
For more information on what to look for when choosing a Gold IRA company, check out Money’s Guide to the Best Gold IRA Companies. To own gold, whether in the form of coins or precious metals, you need a genuine, self-directed IRA in an IRA, which is offered by a few custodian banks.
