Gold IRAs provide you with an opportunity to diversify your retirement portfolio by investing in physical precious metals that will be held in an IRS-approved depository and can only be retrieved upon reaching retirement age.
Coins and bars eligible for inclusion in an Individual Retirement Account must meet minimum fineness standards set by the IRS, mandating that any investments be from either a national government mint or accredited refiner/assayer/manufacturer.
Purity
Gold coins can be an attractive investment choice for investors seeking to diversify their portfolio and shield it against currency collapse or economic downturns, but it’s essential that investors understand all costs associated with investing as well as any possible unanticipated losses that might arise.
Purity should always be an important consideration when investing in gold coins and bullion. For IRA-approved metals, specific purity standards must be met, such as being at least 99.5% pure (for gold), or 99.9% pure for silver (for IRA approval of silver products). Common examples of this are American Eagle proof and bullion coins as well as Canadian Maple Leaf and Australian Kangaroo bullion products from these categories.
Your precious metal investment options include traditional, Roth, SEP, and SIMPLE IRAs; however, in each of them a dedicated custodian must be found for these assets. Only a select few firms act as trustees for self-directed IRAs that specialize in physical transfer and storage for precious metals – these generally charge annual storage and insurance fees.
Weight
Gold coins’ weight should be an integral consideration when selecting precious metals for an IRA. While gold bars are priced according to their gold content, coins tend to be more costly due to their collectible value and large mintage figures.
No matter which form of gold investment you select, it is vital to carefully evaluate all associated fees. Usually you will incur both an initial setup cost as well as annual storage fees with the custodian.
Gold can help diversify your portfolio and act as an insurance policy against inflation, but not all precious metals qualify for inclusion in an IRA. Only certain bullion coins meet the minimum fineness requirements set by the IRS; examples include American Eagle coins, Australian Kangaroo/Nugget bullion coins and Austrian Philharmonic coins – each made of different sources and containing various amounts of gold but all complying with IRS standards for fineness standards.
Circulation
Gold coins are popular tangible assets for investors, yet only some qualify for inclusion in an Individual Retirement Account (IRA).
Only certain coins meet certain criteria to qualify, specifically legal tender status and contain at least 99.5% pure gold content. That rule excludes American Eagles and South African Krugerrands with proof designs as well as older U.S. coins that do not meet fineness requirements.
Instead of restricting yourself to coins alone, consider investing in gold bullion bars from world-class mints such as Johnson Matthey and Credit Suisse. Bullion bars provide more liquidity, tracking more closely with spot gold prices. As such, they’re less costly to buy and sell while being more convenient to store at home or the bank safety deposit box – both essential factors when taking physical possession of your IRA metals is considered distribution and subject to taxation.
Collectibility
Gold can best be invested in through an exchange-traded fund (ETF), which can be bought and sold whenever the market opens. Some financial advisors advise physical bullion or coin investments instead, which come with additional storage, handling, insurance costs as well as being difficult to liquidate and vulnerable to theft.
For optimal gold storage within an IRA, a custodian offering a true self-directed account must be selected as it allows investors to invest in any asset meeting IRS guidelines – precious metals included – but also facilitate a handoff to a depository for physical possession of them.
Some IRA companies provide a service whereby they ship coins directly to you once you turn 72 and need to take required minimum distributions; however, the IRS could view this purchase as illegal, so it’s crucial that buyers understand their tax ramifications prior to making such an acquisition.
