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. Rules against holding collectibles Tax legislation prohibits IRA holders from investing in life insurance, stock in an S corporation, or collectibles. Some types of gold coins are classed as collectibles and would break the rules.
What is confusing and frustrating is that some gold coins and types of gold bars are allowed, others are not. And it’s not like the IRS keeps a master list of what’s allowed and what isn’t. Costs of buying and storing gold Once you’ve chosen a specialized, independent gold IRA custodian, you need to remember that there are fees for all aspects of buying, storing, and selling gold. If you really think it’s a good idea, at least check out the IRS rules and custodian fees before you deposit gold into your IRA.
Required minimum distributions Once you reach the age of 70½, your Gold IRA is subject to a required minimum payout (RMD), just like any other non-Roth IRA account. A specialist Gold IRA provider (often referred to as a “Gold IRA company”) knows all the ins and outs of setting up and running this type of account. These IRAs must be standalone but have the same contribution limits and distribution rules as other IRAs. Some Gold IRA providers (“Gold IRA Companies”) offer promotions that can cover some or all fees. However, you should always find out what the fees are and under what circumstances you must pay them yourself.
A certified financial planner may be able to give you workable suggestions on how to best incorporate a gold IRA into your strategy and plan, but the final decision is up to you. If you feel pressured to buy a Gold IRA for any reason, you might want to keep looking for a better company. 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. The price of gold tends to rise with the cost of living, which means that retirement savings held as gold are less likely to be undermined by inflationary forces than cash alone.
The custodian is an IRS-approved financial institution (bank, trust company, broker), but many financial services and mutual fund companies that process regular IRAs do not use the self-directed version. A gold IRA is a specific type of retirement account that stores physical gold assets, such as gold bars and coins. Storing gold in an IRA offers tax benefits, but a physical asset doesn’t take advantage of the tax-free growth aspects of IRA investments. A gold IRA comes with many of the benefits of a physical asset as well as the tax benefits of an IRA.