An individual retirement account (IRA) is a type of investment account that offers tax benefits to people who use one to save for retirement. A gold IRA is a self-directed IRA that allows investors to receive tax benefits while investing in physical gold and other precious metals. To invest IRA funds in gold, you must set up a self-directed IRA. This is a type of IRA that the investor manages directly and is allowed to own a wider range of investment products than other IRAs.
For a gold IRA, you need a broker to buy the gold and a custodian to create and manage the account. This company stores or stores your actual gold bars, says John Johnson, president of GoldStar Trust, headquartered in Canyon, Texas. Your Gold IRA provider can help you determine which coins, bars, and other gold bars meet the requirements for storage in a Gold IRA. You want to choose a Gold IRA company that is transparent, easy to set fees, and has a good reputation.
Consult reputable outside sources or a fee-based financial planner for investment advice if you’re not sure whether a gold IRA is right for you. Many online gold IRA providers have streamlined systems and work closely with established custodian banks to take the guesswork out of making these decisions. Since IRA owners are required to accept distributions when they reach 73 years of age, they could be forced to sell gold at a lower price than they would like. Making a mistake, even if it happens accidentally, can be very costly. So it’s worth knowing what the IRS will and won’t let the IRS do with your Gold IRA.
There are minimum requirements for the fineness or purity of metals, as well as regulations on the size, type, and weight of your IRA gold. If you want to hold gold outside of a retirement account (which means you can keep it at home), here’s more information on how to buy gold outside of an IRA. Gold IRA rules prevent people from taking possession of precious metals in their IRAs, which means you can’t store the metal in a safe in your home. 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.
Surprisingly, a gold IRA doesn’t just have to hold gold, you don’t have to hold any gold in one at all. There are three types of gold IRAs, and each is essentially the logical consequence of the traditional IRA for gold IRAs. Given that the stock market typically rises by around 7% in an average year, it would be rare for a gold IRA to outperform other retirement investments. 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.
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. Given that you can also hold silver coins or gold bars, platinum, and palladium in a gold IRA, the correct term is technically “precious metal IRA.”