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. In a Gold IRA, you can hold real physical gold. It must comply with IRS standards and be held by the IRA trustee, not the IRA owner.
It must also be stored in an IRS-approved depot. Gold IRA rules require that you store suitable precious metals with a national depositary, bank, or an IRS-approved third-party trustee. Your custodian bank can refer you to an approved institution and handle the gold transfer as part of setting up your Gold IRA. Gold IRAs will help diversify an individual’s retirement account and serve as a hedge against certain financial factors.
You can invest in gold stocks, such as stocks of gold mining companies or gold royalties, which help finance mines. Gold American Eagle Bullion Coins, however, are the only gold coins that represent an exception to the purity guidelines. However, the IRS has introduced additional tax filing and accounting requirements for self-managed gold IRAs because of the more complicated assets they own. With your Gold IRA or Custom Precious Metals IRA, you’ll still have beneficiaries, receive quarterly statements, and you can sign up online to check your balance.
Once you’ve opened a self-directed Gold IRA, you can transfer cash to the account to fund your purchase of physical gold. As long as there is gold on this earth, it is not too late to open your own IRA for self-directed precious metals. Most gold IRA companies buy back gold that they originally sold you, but repurchases are generally made at a wholesale price, which is often around 30% below the current selling price. Unlike a gold ETF, an exchange-traded fund that tracks the performance of gold, a Gold IRA allows you to hold the physical precious metals in an IRS-approved depository.
Precious metals such as silver and gold, platinum and palladium are considered a hedge against inflation and stock market volatility. Gold IRAs allow you to keep these precious metals in an individual retirement account. The term gold IRA is primarily used to describe a self-directed IRA in which funds are invested in hard metals. To do this, you’ll need an individual Gold retirement account, commonly referred to as a Gold IRA, although it has its own additional rules to follow and fees to pay.
