A gold IRA or precious metal IRA is an individual retirement account in which physical gold or other eligible precious metals are stored for the benefit of the IRA account holder. It works in the same way as a regular IRA, except that it holds physical investment coins or bars instead of paper assets. Precious metal IRAs are usually self-directed IRAs, a type of IRA in which the custodian allows you to manage more diverse investments in the account. Gold IRAs are a type of self-managed individual retirement account.
You can use them to invest in precious metals such as gold, silver, platinum, and palladium. Then you can enjoy the tax benefits that come with an IRA. Although investors can undoubtedly buy physical gold and store it in a private safe, the IRS strictly prohibits this for gold (and other precious metals) purchased by the IRA. The IRS has issued private letter rulings to the most important gold ETFs, which state that IRAs may own the ETFs.
You probably also know that gold is a “collector’s item” and that IRAs are not allowed to own collectibles. Gold may be the only precious metal you’ll find in all gold IRAs, many also allow you to invest in other precious metals. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian can. Gold IRA providers usually offer plenty of assistance in setting up and funding your account, as well as extending existing retirement accounts.
An IRA also allows gold bars and bullets made of gold and silver if they have a fineness of 99.9%. 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. While it’s legal to own gold or silver via an IRA or other retirement account with some restrictions, it’s not the best or most efficient way to own precious metals. Since there are multiple Gold IRA providers to choose from, it’s helpful to know what factors to consider when choosing one.
If your IRA provider has a buyback program, this ensures that you don’t have to bother selling your gold yourself. While you can technically set up an LLC and control your IRA purchases yourself (as long as you meet some strict requirements), you still can’t store the gold in your home. After you’ve funded your account, you can let your IRA custodian know which gold bars you need to buy (and how much). Fortunately, most gold IRA providers will help you comply with these regulations and make your retirement savings in precious metals as easy as possible.
