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. The Internal Revenue Service (IRS) allows holders of self-managed IRA accounts to purchase bars and coins minted from gold or other approved precious metals such as silver, platinum, or palladium. A Gold IRA must be managed separately from a traditional retirement account, although the rules regarding things like contribution limits and payouts remain the same.
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. If your IRA provider has a buyback program, this ensures that you don’t have to bother selling your gold yourself. Fortunately, most gold IRA providers will help you comply with these regulations and make your retirement savings in precious metals as easy as possible. 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.
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. An IRA also allows gold bars and bullets made of gold and silver if they have a fineness of 99.9%. 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. With so many scams and misleading ads out there, it’s important to do your research before you open a Gold IRA account.
After you’ve funded your account, you can let your IRA custodian know which gold bars you need to buy (and how much). Therefore, gold IRAs require the use of a custodian bank, usually a bank or brokerage firm, that manages the account. Here’s how you can use a Gold IRA to save money that would otherwise have gone to the government.
