A gold IRA or precious metal IRA is an individual retirement account in which physical gold or other approved 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 metals IRAs are usually self-managed IRAs, a type of IRA in which the custodian bank allows you to manage a more diverse range of 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. That’s when you can enjoy the tax benefits of an IRA. You probably also know that gold is a “collectible” and that IRAs are not allowed to own collectibles. Here’s how you can save money with a gold IRA that would otherwise have gone to the government.
With multiple Gold IRA providers to choose from, it’s helpful to know what factors to consider when choosing one. 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. The IRS has issued private letter rules to major gold ETFs, which state that IRAs may own the ETFs. 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. There are currently a variety of precious metals that meet the minimum purity requirements allowed for inclusion in an IRA Gold account. The ETF is also able to buy, store, and insure gold at a much lower price than you or an IRA custodian bank. Gold bars and round gold and silver coins are also allowed in an IRA if they have a fineness of 99.9%.
While it’s legal to own gold or silver through an IRA or other retirement account with some restrictions, it’s not the best or most efficient way to own the precious metals. If you’re interested in setting up such an account, you’ll need to look for a specialized custodian or firm that is able to handle all the documentation and reporting for tax purposes required to maintain a Gold IRA. As a result, gold IRAs require the use of a custodian bank, usually a bank or brokerage firm, to manage the account. Gold may be the only precious metal you’ll find in all gold IRAs, but many also allow you to invest in other precious metals.
Gold IRA providers typically offer extensive assistance with setting up and funding your account, as well as renewing existing retirement accounts.
