Because of these attractive features, many investors are wondering whether they can gold physical gold in their individual retirement account (IRA). 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. You can sell the gold or precious metals in your IRA anytime without taxes or penalties, unless you withdraw the money from your IRA.
When you withdraw the money from your IRA, you’ll have to pay taxes on the cash, unless it’s a ROTH IRA. If you have a precious metal IRA, your IRA directly owns physical bullion bars or coins, which you select and order directly. It may be better to invest your IRA in a precious metals ETF or own precious metals in a taxable account. 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.
The practical problem is finding an IRA trustee who is willing to set up a self-governing IRA and facilitate the physical transfer and storage of precious metals assets. Once you’ve set up your Gold IRA, you can transfer or transfer the funds from an existing IRA or other retirement plans. A gold IRA can be a traditional IRA, a ROTH IRA, a SEP IRA, a SIMPLE IRA, or an inherited IRA that manages itself and owns IRA-eligible physical gold coins or gold bars. Custodian banks that offer a checkbook IRA structure generally recommend that their customers store the IRA metals in a safe deposit box.
A self-directed IRA is different from other types of IRAs because you can invest in assets such as real estate and precious metals. You can also make annual contributions to your IRA based on limits based on your IRA category and age. Storing your IRA metals at home can put the IRA account holder at significant risk of IRS penalties. Ideally, keep your gold and other precious metals in your Gold IRA until you retire, as these accounts are designed for that.
In fact, this general rule prohibits IRAs from investing in precious metals or coins made from precious metals. However, there are specific rules for the types of gold and precious metals you can invest in with a self-directed IRA. Therefore, the transaction is characterized as a taxable distribution by the IRA, followed by a purchase of the metal or coin by the IRA owner (you). IRS rules for precious metals don’t allow you to store your coins and bars at home or in a safe.
