With a traditional IRA or other retirement account, you can invest in gold through the stock market by buying stocks in mining companies or mutual funds that hold those stocks. Another alternative is a gold ETF, an exchange-traded fund that tracks the performance of gold as an asset. Gold IRAs are aimed at investors who want to diversify their assets while saving for retirement. Precious metals such as silver and gold, platinum and palladium are regarded as hedges against inflation and stock market volatility. Gold IRAs allow you to hold these precious metals in an individual retirement account.
The accounts offer the same tax benefits as IRAs, which are invested in stocks, bonds, mutual funds, and ETFs. A gold IRA is a type of self-managed individual retirement account (IRA) that allows you to own gold bars. 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 stocks of gold mining companies or exchange-traded gold funds (ETFs). Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium.
Investing in a gold IRA requires the services of a custodian, a broker to purchase gold, and an approved depositary to store gold. Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. Gold IRA companies are essentially brokers that sell IRS-approved coins and bars of gold and other precious metals so you can invest a gold IRA. Therefore, the first step to operating a Gold IRA is to search for a custodian or trustee that offers Gold IRAs.
You can choose a mix of gold and silver, and some gold IRA companies also offer platinum and palladium, which you can buy and hold in your IRA. Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved trustee. Gold IRA companies are not investment companies that have a fiduciary duty to act in your best interest. A gold IRA is characterized by the fact that the account holder owns the actual precious metals, as opposed to stocks or fund shares in mining companies.
Self-directed IRAs can be traditional IRA (traditional SDIRA) or Roth IRA (Roth SDIRA), and they have the same rules regarding contributions, income limits, and distributions as mainstream IRAs. To do this, you’ll need an individual gold retirement account, commonly referred to as a Gold IRA, although this account has its own additional rules and fees. Then you 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. Many of these companies allow investors to buy precious metals, which include silver, platinum, and palladium in their IRAs in addition to gold.
If gold seems like a solid choice for you, Sentell suggests investing no more than a third of your retirement savings in a gold IRA. If you want to invest in precious metals, a gold IRA allows you to combine the benefits of IRAs and precious metals investments. It should be emphasized that a gold IRA is only necessary if an investor wants to invest in physical gold bars, coins and gold bars. For gold IRAs, government regulations specify what type of gold can be kept in the account and where it should be stored.
We’ve reviewed more than a dozen Gold IRA companies and identified the best options for investors with different needs and financial sophistication.