Gold IRAs appeal to investors who want a diversified retirement portfolio. 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.” Over the centuries, gold has proven to be one of the most stable assets, making it a fantastic candidate for your IRA. To avoid the prospect of missing out on the rollover cutoff, many people choose to have their Gold IRA company coordinate the rollover through a direct transfer from institution to institution.
If you’re not sure whether a gold IRA or a silver IRA is right for you, contact a fee-based financial planner who isn’t affiliated with a gold IRA company to determine whether it would be a good addition to your portfolio. Gold bars and round gold and silver coins are also allowed in an IRA if they have a fineness of 99.9%. Whether you’re planning to start a Gold IRA from scratch or extend your current retirement account, the process starts with creating a self-directed IRA. Alternatively, you can handle all of the paperwork yourself or find a Gold IRA company that specializes in this process.
To avoid running afoul of tax rules for proprietary transactions, self-governing IRAs, including gold IRAs, must have an IRS-approved custodian bank. A self-directed IRA is often referred to as a gold IRA or gold-backed IRA when it is specifically set up to store physical metals in the form of gold bars, coins, or polishing coins. A gold IRA can give you the tax benefits of a traditional retirement account, but you must comply with IRS regulations or risk fines and penalties. For more information on what to look for when choosing a Gold IRA company, check out Money’s Guide to the Best Gold IRA Companies.
A gold IRA is an alternative investment option for retirement savers who want to own gold as an inflation hedge or to diversify their assets outside the stock market. If that doesn’t matter to you, there are other ways to add exposure to precious metals to your retirement portfolio, such as buying stocks in gold mining companies. IRS rules allow funding a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan. Most IRA companies may buy back gold, but be aware that the price at which they buy gold is lower than the price at which they sell gold.
If you just want to buy gold or silver, here’s what you need to know about buying gold outside of an IRA. It’s important to be aware of all costs and expenses before you buy physical gold to keep in an IRA.