There are two ways to invest in gold using an IRA. One option is to set up a self-directed gold IRA, which allows you to buy physical gold and silver with pension funds. 5 It is also possible to invest in a mutual fund or ETF that invests in precious metals, although this is not the same as owning physical gold bars. Gold is a popular investment these days, and there are plenty of Gold IRA companies that you can work with, with different fees, services, and quality of customer support. For more information on what to look for when choosing a Gold IRA company, check out Money’s Guide to the Best Gold IRA Companies.
They sell gold coins, gold bars, and the like, but they don’t offer IRA investment advice (regardless of what their websites or other marketing materials might suggest). If you withdraw gold from your IRA before you’re 59½ years old, you’ll be charged income tax on the value of that gold, as well as a 10% penalty for making an early withdrawal from a retirement account. In practical terms, this means that the minimum account accounts with many gold IRA companies would require to invest much more than the 5% or less that financial advisors generally recommend investing in precious metals, which could put your nest egg at too high risk. However, if you want to keep physical gold in your portfolio, self-directed IRAs allow these types of investments.
Self-directed IRAs, which include Gold IRAs, have the same contribution and distribution limits, which depend on your age, as traditional IRAs. While the majority of IRAs invest in more traditional assets such as stocks, bonds, and cash equivalents, the tax code also allows self-controlled vehicles that can hold precious metals such as silver or gold. When you open a Gold IRA, you should choose carefully to ensure that you get the best service at the best possible price. Annual fees are generally charged by the account custodian, and storage and insurance fees are more often owed to the custody account than to the Gold IRA company.
A gold IRA is an alternative investment option for retirement savers who want to own gold as an inflation hedge or to diversify their assets outside the stock market. Unfortunately, most Gold IRA companies don’t have a good record of fee transparency on their websites, so finding out the details may require a phone call or two. That means you can’t go out and buy gold bars or gold coins as part of your retirement portfolio. There are plenty of rules and regulatory hurdles that you’ll need to overcome if you’re thinking about buying a Gold IRA.
It’s important to be aware of all costs and expenses before you buy physical gold to keep in an IRA. Unlike gold ETFs or gold company stocks, a precious metal IRA allows you to hold the physical precious metals in accordance with IRS regulations.
