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. A gold IRA must be kept separate from a traditional retirement account, although the rules surrounding things like contribution limits and distributions remain the same. 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.
You can’t store IRA-qualified gold at home or in a local safe deposit box. 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. Money Reserve’s Gold Standard Precious Metals IRA program combines the traditional protection of gold and silver with the modern convenience of an IRA.
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. Many people who want to avoid this risk instead have their Gold IRA company carry it out as a transfer from institution to institution instead of taking it on themselves. If this isn’t a priority for you, there are other ways to add precious metals exposure to your portfolio in addition to a gold IRA. A key selling point that gold IRA companies like to tout in their marketing is that if you own a gold IRA, you own the physical precious metals.
The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. Physical gold can play an important role in a well-diversified retirement portfolio. However, there are certain Gold IRA rules that must be followed if you want to take advantage of the full benefits of such a facility. Unlike withdrawing funds from a traditional retirement account, a gold-backed IRA allows you to have a powerful physical asset in your hands, gold that you can keep, sell at a later date, use as currency in times of crisis, or pass on to family members. In addition to the account depository, the Gold IRA Company coordinates the tasks of the custodian, the facility where the precious metals in your IRA are physically stored.
A gold IRA rollover involves withdrawing money from another defined contribution account, such as an IRA, 401 (k), 403 (b), or a savings plan. To find custodian banks that offer true self-directed IRAs, you can search the Internet for “gold IRAs” or “self-directed IRAs.” You probably also know that gold is a “collectible” and that IRAs are not allowed to own collectibles. If you already have an IRA or 401 (k), either Regular or Roth, you have the option to convert some or all of your balance to a Gold IRA.
There are minimum requirements for the fineness or purity of metals, as well as regulations that govern the size, type, and weight of your IRA gold. You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days. Storing your IRA gold at home can be considered a distribution, meaning you lose your tax-deferred benefits and could be punished with a fine if you’re under 59½ years of age.
