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. These IRAs are generally not offered by the big brokerage firms or banks, as they enable investments that these companies cannot benefit from. Gold IRAs are usually defined as alternative investments, meaning that they are not traded on a public stock exchange and require specialized expertise to value them.
According to Brett Gottlieb, financial advisor and founder of Comprehensive Advisor in Carlsbad, California, you should first consider whether you want to make a physical investment in your portfolio and not in stocks or investment funds from gold companies or an Exchange Traded Fund (ETF) that tracks a gold index. You then have to buy the approved gold or other precious metal and have it transferred to the custodian so that the custodian bank can book it, explains Moy. The custodian is an IRS-approved financial institution (bank, trust company, broker), but many financial services and mutual fund companies that process regular IRAs do not use the self-directed version. Moy, chief strategist at Fortress Gold, who, as former director of the United States Mint, oversaw the world’s largest production of gold and silver coins.
Not only can you contribute to an employer-sponsored 401 (k), but you can also contribute to a Roth IRA, a traditional IRA or a self-directed Roth IRA. A gold IRA is a type of IRA that allows investors to own physical gold, silver, platinum, and palladium. As soon as money is available in the new IRA account, a customer service representative reviews the current precious metal options that a consumer can buy. You retain complete control of the gold purchased and the IRS-approved storage facility, as long as both are approved by the IRS.
These funds can be used to diversify risk for the account holder while avoiding the complications that arise from owning gold, silver, or precious metals. Roth Gold IRAs are self-managed IRAs with after-tax contributions, which postpone the tax benefit until after you retire. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank. This leads to the conclusion that only gold bars — and not gold coins — must remain in the possession of the trustee.
Metals aren’t particularly liquid, of course, so finding the money for these distributions could be a problem so you have to sell some of your gold when that might not be beneficial. However, the distribution of tax benefits and contribution limits differ from those for traditional gold IRAs.