A gold IRA is a type of self-directed IRA that allows you to invest in gold bars for retirement. 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. 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.
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. The same goes for those who have physically taken possession of gold, silver, or other precious metals that belong to their IRAs. If you want to hold physical gold in an IRA, the first step is to open a self-directed IRA (SDIRA), which you manage directly with a custodian bank.
You may love South African Krugerrand gold coins, but you can’t add them to your IRA Gold account. Money Reserve’s Precious Metals IRA program combines the traditional protection of gold and silver with the modern convenience of an individual retirement account. This company stores or stores your actual gold bars, says John Johnson, president of GoldStar Trust, headquartered in Canyon, Texas. The IRS is supposed to be taking a close look at this type of IRA right now. Therefore, be careful with this option.
If you’re considering a gold IRA, contact a financial advisor to find out how the metal would fit your portfolio’s overall goals. For example, the purity of gold must be 99.5%, silver must be 99.9% pure, and both platinum and palladium must be 99.95% pure. Therefore, a qualified custodian or trustee must be responsible for managing and disposing of property in a self-managed IRA. Since most traditional brokerage firms and banks don’t allow these types of investments, investors must hire self-managed IRA custodians for these investments.
Gold is often used as an inflation hedge, allowing investors to bet against uncertainties on the wider market. Metals aren’t particularly liquid, of course, so finding the money for these distributions could be a problem, meaning you have to sell some of your gold when that might not be beneficial. Even if they don’t believe such disasters are looming, many investors looking to diversify their individual retirement accounts (IRAs) beyond the usual suspects could want stocks, bonds, and mutual funds a stake in the physical yellow stuff. Record gold sales combined with the appearance of many more companies processing and simplifying transactions have made investing in a gold IRA a one-stop shop.
Self-directed IRAs are just IRAs offered by custodian banks and allow account holders to have more control over investments in the IRA.
