Almost any type of investment is allowed within an IRA, including stocks, bonds, mutual funds, pensions, unit investment trusts (UITs), exchange traded funds (ETFs), and even real estate. If you’ve decided that a gold IRA is right for you, you’ll need to set up a self-directed IRA. With this type of IRA, you can manage the account and invest in a wider range of products than other IRAs. 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.
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. IRA rules for precious metals require you to work with a custodian, a financial institution that is responsible for protecting the assets in your Gold IRA. 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. A self-directed IRA is different from other types of IRAs because you can invest in assets such as real estate and precious metals.
Most gold IRA companies have relationships with top custodian banks and usually offer these services as part of their package. Traditional gold IRAs, Roth and SEP gold IRAs are subject to contribution limits, just like their non-gold counterparts. You can’t add gold or precious metals to your Gold IRA yourself, even if you already own IRA-eligible metals or plan to buy them for investment purposes. IRS rules allow funding a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan.
To avoid the prospect of missing out on the rollover cutoff, many people choose to have their Gold IRA company coordinate the rollover through a direct transfer from institution to institution. 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. If that doesn’t matter to you, there are other ways to add exposure to precious metals to your retirement portfolio, such as buying stocks in gold mining companies. Although IRAs used to be limited to owning American Eagle gold and silver coins, IRAs can now invest in IRS-approved gold, silver, palladium, and platinum bars and coins.
Make sure you check the list of approved gold objects with your custodian manager before you transfer gold to your IRA. If you take personal control of the physical gold from a self-managed IRA, the IRS counts it as a payout, meaning you may face taxes and penalties for early withdrawals. In some cases, the IRS is authorized to close your entire account.
