Although IRAs used to be limited to holding American Eagle gold and silver coins, IRAs can now invest in gold, silver, palladium, and platinum bars and coins approved by the IRS. Not all gold investments can be owned by an IRA. The basic rule is that an IRA must not own a collector’s item and precious metals are defined as collectibles, regardless of whether the investment is in gold bars or coins. Fortunately, there are exceptions to the general rule for gold, silver, platinum, and palladium, which are held in certain forms. Gold IRA companies streamline the account opening process.
They sell gold coins, gold bars, and the like but don’t offer IRA investment advice (regardless of what their websites or other marketing materials might suggest). It’s important to do your research when choosing a product. For more information on what to look for when choosing a Gold IRA company, see Money’s Guide to the Best Gold IRA Companies. A gold IRA is an alternative investment option for retirement savers who own gold as a hedge against inflation or want to diversify their assets beyond the stock market.
People who believe that physical possession of gold or other precious metals is safer can gain that security with a gold or silver IRA. This is a prohibited transaction as an IRA owner is not allowed to make any purchase or sale transactions with the IRA. If you withdraw gold from your IRA before you’re 59½ years old, you’ll be charged income tax on the value of that gold, plus a 10% penalty for withdrawing it early from a retirement account. Buying physical gold to store in a retirement account can also be more expensive than investing in assets such as stocks, bonds, or mutual funds.
Once you’re 72 years old, you’ll be required to accept the required minimum payouts (RMDs) from a traditional Gold IRA (but not from a Roth IRA). To avoid missing the rollover cutoff, many people choose to have their IRA Gold company coordinate the rollover through a direct transfer from institution to institution. While the price of gold rose to new highs over the summer, you’ve likely seen a number of ads recommending investing in gold via an IRA. An IRA also allows gold bars and bullets made of gold and silver if they have a fineness of 99.9%.
Gold IRAs are normally defined as “alternative investments,” meaning they are not traded on a public stock exchange and require specialized expertise to value them. There are plenty of rules and regulatory hurdles you’ll need to overcome when thinking about a Gold IRA. You then have to buy the approved gold or other precious metal and have it transferred to the custodian bank so that the custodian can deposit it, explains Moy. If you just want to buy gold or silver, here’s what you need to know about how to buy gold outside of an IRA.
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. So if your portfolio is balanced with both gold and paper-based investments, a loss on the gold side is offset by gains on other assets. Record gold sales combined with the presence of many other companies to process and simplify transactions have made investing in a Gold IRA a one-stop shop.