Investors with gold IRAs can hold physical metals such as gold bars or coins as well as securities related to precious metals in their portfolio. A gold IRA must be kept separate from a traditional retirement account, although the rules surrounding things like contribution limits and distributions remain the same. 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’t store IRA-qualified gold at home or in a local safe deposit box. If you want to hold physical gold in an IRA, it can’t be your regular account. It must be a separate, special IRA, called a gold IRA. If you’re considering a gold IRA, contact a financial advisor to find out how the metal would fit your portfolio’s overall goals.
The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. Some IRA companies guarantee that they’ll buy back the gold from you at current wholesale prices, but you could still lose money if you close the account, which is not usually the case when opening and closing regular IRAs. Still, a gold IRA can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers over other financial assets, such as paper currency and stocks. They also make it easier to open your Gold IRA account, but they don’t provide investment advice, and you shouldn’t use the marketing material they publish as guidance in this regard.
IRA-eligible gold coins, bars, and coins must meet a number of requirements set forth in the Internal Revenue Code in order to be stored in a self-directed IRA. You probably also know that gold is a “collectible” and that IRAs are not allowed to own collectibles. Physical gold can play an important role in a well-diversified retirement portfolio. However, there are certain Gold IRA rules that must be followed if you want to take advantage of the full benefits of such a facility. A gold IRA rollover involves withdrawing money from another defined contribution account, such as an IRA, 401 (k), 403 (b), or a savings plan.
To avoid the possibility of having to pay taxes and penalties, your Gold IRA company can process the transfer on your behalf. A key selling point that gold IRA companies like to tout in their marketing is that if you own a gold IRA, you own the physical precious metals. Gold bars and round gold and silver coins are also allowed in an IRA if they have a fineness of 99.9%. Unlike withdrawing funds from a traditional retirement account, a gold-backed IRA allows you to have a powerful physical asset in your hands, gold that you can keep, sell at a later date, use as currency in times of crisis, or pass on to family members.
The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian. If you’re considering a gold IRA, you should always do so as part of your wider investment strategy, taking into account your time horizon until retirement, expected income needs, and risk tolerance. You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days.