Gold IRAs have higher maintenance fees than other types of IRAs because of the additional costs associated with investing in gold. In addition to brokerage fees and account setup fees, the investor must pay additional costs to store and insure the precious metal. Additionally, the IRS has guidelines on what type of gold can be purchased for an IRA and how it should be stored. If you want to hold physical gold in an IRA, the first step is to open a self-directed IRA (SDIRA), which you manage directly with a custodian bank.
Many online gold IRA providers have streamlined systems and work closely with established custodian banks to take the guesswork out of making these decisions. You can invest in gold stocks, such as stocks of gold mining companies or gold licensing companies, which help finance mines. Despite what some of their sales and marketing literature might imply, you shouldn’t rely on Gold IRA companies for investment advice. Make sure you check the list of approved gold objects with your custodian manager before you deposit gold into your IRA.
However, the IRS has introduced additional tax filing and record keeping requirements for gold IRAs due to the more complicated assets they own. The IRS does not allow popular gold coins such as the South African Krugerrand or British sovereign coins to be stored in a gold IRA. Once you’ve opened a self-employed gold IRA, you can transfer cash to the account to fund your purchase of physical gold. For investors who want to take advantage of the preferential tax status of an individual retirement account and invest in gold at the same time, a gold IRA can be a good option.
A self-directed gold IRA can give you peace of mind if you want to hold physical assets. However, if you want to diversify precious metals without the hassle and expense of a gold IRA, you can also invest in gold ETFs, gold mutual funds, and stocks of gold mining companies. Many Gold IRA custodians work with specific depositories and have developed procedures that make selling and storing gold easy and secure for their customers. As with most important financial decisions, opening a Gold IRA isn’t a decision you should make lightly or before you’ve thoroughly researched yourself. You could buy gold outside of a retirement account, but a gold IRA offers valuable tax benefits.
Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved trustee.