Gold IRAs have higher maintenance fees than other types of IRAs because of the additional costs associated with investing in gold. In addition to brokerage fees and account setup fees, the investor must pay additional costs to store and insure the precious metal. Rules against holding collectibles Tax legislation prohibits IRA holders from investing in life insurance, stock in an S corporation, or collectibles. Some types of gold coins are classed as collectibles and would break the rules.
What is confusing and frustrating is that some gold coins and types of gold bars are allowed, others are not. And it’s not like the IRS keeps a master list of what’s allowed and what isn’t. Still, many people have decided that a gold IRA is an important part of their plan to retire as planned, and when you examine the benefits of this attractive tangible asset, it’s easy to see why. If you feel pressured to buy a Gold IRA for any reason, you might want to keep looking for a better company.
Storing gold in an IRA offers tax benefits, but a physical asset doesn’t take advantage of the tax-free growth aspects of IRA investments. You can set up the SDIRA either as a traditional IRA (tax-deductible contributions) or as a Roth IRA (tax-free distributions). For people who don’t have the time or knowledge to plan, track, and carry out due diligence, gold IRAs may be a bad choice. Physical gold wasn’t always an investment option for retirement savers who wanted to benefit from an IRA.
If you really think it’s a good idea, at least check out the IRS rules and custodian fees before you deposit gold into your IRA. If this is the only IRA account or if there isn’t enough liquidity in the other accounts, you’ll also need to sell some of the gold to raise the money to make the RMD. A gold IRA company usually has an order desk that can help you select gold (or other precious metals) that fit your investment strategy — or at least shed some light on the gold products most commonly ordered by retirement savers. You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able to recommend one for you).
The real benefit of a gold IRA is combining the benefits of precious metals yourself listed above with the additional benefits that an IRA can bring. If you’ve already saved money in a standard IRA from your employer, you can easily convert it to a precious metals IRA using a precious metals IRA provider. Thankfully, there is no limit to how much you can transfer from another IRA to your precious metals IRA. So if you want to keep gold in your IRA, you’ll need to set up a self-directed IRA first and then you’ll need to find a custodian that specializes in self-directed gold IRAs.
To invest in gold via a gold IRA, an investor must first open a self-directed IRA (SDIRA) that can manage gold.