The term gold IRA refers to a specialized individual retirement account (IRA) that allows investors to hold gold as a qualified retirement plan. 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. Many people who want to avoid this risk instead have their Gold IRA company carry it out as a transfer from institution to institution instead of taking it on themselves. The term gold IRA is primarily used to describe a self-directed IRA whose funds are invested in hard metals.
Some investors believe that holding physical precious metals is less risky than investing (either directly or through funds) in gold industry stocks such as mining companies. A common way to fund a new Gold IRA account is to use funds that are already in another retirement account, such as another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan, in accordance with IRS rules. Gold IRAs will help diversify an individual’s retirement account and serve as a hedge against specific financial factors. 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.
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. 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. Such safes do exist, but gold bars are much more accessible than the daily gold owner can imagine. The Gold IRA also sells you the gold bars and coins (or other precious metals) that you want to invest in your Gold IRA.
If you want to hold gold outside of a retirement account (which means you can keep it at home), here’s more information on how to buy gold outside of an IRA. To avoid the possibility of having to pay taxes and penalties, your Gold IRA company can process the transfer on your behalf. As long as there is gold on this earth, it is not too late to open your own IRA for self-directed precious metals. A self-managed IRA offers the same tax benefits as a traditional IRA, but allows you to hold precious metals and other alternative assets in accordance with IRS regulations.
Surprisingly, a gold IRA doesn’t just have to hold gold, you don’t have to hold any gold in one at all. It may be better to invest your IRA in a precious metals ETF or own precious metals in a taxable account.
