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. 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 search on Google for “self-directed Gold IRA” yields numerous results. I know that American Bullion has been around for years, and so has APMEX.
Gold bars and round gold and silver coins are also allowed in an IRA if they have a fineness of 99.9%. I believe the idea behind storing gold or silver in a Roth IRA is to create a tax haven against such an egregious move by the government. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank. This is in contrast to the more common assets that regular IRAs are limited to, such as cash, stocks, and bonds.
So it’s important that you work with a company like IRA Financial Group that has the expertise and resources to help you comply with IRS rules without having to deal with selling coins or precious metals. While the price of gold rose to new highs over the summer, you’ve probably seen a number of ads recommending investing in gold via an IRA. Although many financial institutions allow individuals to buy stocks and mutual funds in an IRA, you can buy both traditional and alternative investments with a self-directed IRA or Solo 401 (k). A gold IRA also has similar tax benefits to a normal IRA, allowing interest to accrue tax-free until the owner is ready to retire.
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 type of IRA that the investor manages directly and is allowed to own a wider range of investment products than other IRAs. Gold can certainly have a place in a well-diversified portfolio, but it’s important to weigh the risks of buying gold compared to other assets. Because the gold in a gold IRA must be stored in an IRS-approved deposit, you can’t store it in a safe, a home safe, or under your mattress.
The Internal Revenue Code has provisions about what type of gold and other precious metals investors can buy, but aside from these few regulations, it is legal to buy gold with a self-directed IRA. What is confusing and frustrating is that some gold coins and types of gold bars are allowed, others are not. The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. If you’re interested in investing in gold, you’ll first need to set up a self-directed IRA (or Solo 401 (k) for the self-employed) with a self-directed or passive custodian such as the IRA Financial Trust.
