The four precious metals that may be held in an individual retirement account are gold, silver, platinum, and palladium, as long as they are IRS-approved coin or ingot products. 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.” Specialized custodian banks such as Fidelity, Schwab or TD Ameritrade do not manage physical gold in an IRA. So if you want to keep gold in your IRA, you’ll need to set up a self-directed IRA first and then you’ll need to find a custodian that specializes in self-directed gold IRAs.
A quick Google search for “self-directed Gold IRA” yields numerous results. I know that American Bullion has been around for years, and so has APMEX. While it’s legal to own gold or silver through an IRA or other retirement account with some restrictions, it’s not the best or most efficient way to own the precious metals. After doing this research, you’ll likely come to the conclusion that the gold or gold bars and coins shouldn’t belong in your IRA.
Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved trustee. If you suddenly need gold to trade in groceries, you’d need to call your custodian manager first and fill out the necessary paperwork to get access to your own gold. The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. However, the IRS has introduced additional tax reporting and accounting requirements for gold IRAs due to the more complicated assets they own.
Gold bars and round gold and silver coins are also allowed in an IRA if they have a fineness of 99.9%. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank. If this is the only IRA account or if there isn’t enough liquidity in the other accounts, you’ll also need to sell some of the gold to raise the money to make the RMD. Before you open a gold IRA, keep in mind that it’s not the only way to invest in gold with your retirement funds.
To do this, you’ll need an individual gold retirement account, commonly referred to as a Gold IRA, although this account has its own additional rules and fees. Once you’ve opened a self-employed gold IRA, you can transfer cash to the account to fund your purchase of physical gold. 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. This is a prohibited transaction, as an IRA owner is not allowed to make any purchase or sale transactions with the IRA.
