Investment in physical gold through an IRA comes with fees and risks if your portfolio remains diversified.
To purchase physical gold, a self-directed IRA that permits alternative investments like precious metals is required. Furthermore, you’ll require both a dealer and depository that will safely hold onto it.
1. You need a self-directed IRA
Physical gold investments cannot be directly invested through traditional IRAs or 401(k). Instead, you should open a self-directed IRA that allows you to manage and direct your own investments – as well as gain access to more assets than with traditional accounts.
This type of IRA allows you to hold precious metals like gold, silver and platinum. Furthermore, it also enables investing in real estate and private businesses.
Physical gold has long been an attractive retirement investment due to its stable price, potential inflation hedge properties and ability to build wealth over time. However, you must consult an experienced precious metals IRA specialist in order to make sure that your physical gold complies with IRS requirements.
These specialists will handle the paperwork on your behalf, freeing you to focus on other investments while enjoying all the advantages associated with owning physical gold in an IRA account. Furthermore, they can assist in finding a trusted custodian and help determine how best to store metals.
2. You need a custodian
Many investors opt to add physical gold to their IRAs for diversification and as an inflation hedge; however, gold IRAs often incur higher fees than traditional IRAs due to custodian and storage charges.
To open a Gold IRA, it is necessary to locate an approved and reliable custodian. Preferably one that offers multiple investment platforms as this will have an effect on what type of account is created. Additionally, your desired investment amount in precious metals will have an effect on this decision as this may determine its type.
Once you’ve located a custodian, the next step in purchasing physical gold for your IRA should be buying physical coins or bars from a dealer that sells coins with minting fees attached and bars from one ounce up to 400 ounces; storage fees will apply if storing in a vault.
3. You need to buy physical gold
Gold IRA companies typically charge a markup on the precious metals they sell and store, in addition to fees for vaulting, insurance and shipping services. Investors should factor these costs into their calculations when considering potential returns; some types of gold bullion and coins may not qualify due to IRS guidelines stating they are collectibles and therefore ineligible for an IRA account.
Physical gold differs from Gold IRAs in that an IRA offers tax advantages while physical gold does not. Therefore, investors may find owning physical gold through an IRA isn’t always the most appropriate way of investing in precious metals; typically speaking a Gold IRA should be your go-to option when looking to purchase precious metals as investments.
4. You need to store it
Gold is an asset with increasing value over time and many practical uses, from treating chronic diseases to producing oxygen on Mars. Furthermore, it is the only currency used as a global standard, making it a safe bet when investing in your retirement savings.
Investors must remember that the IRS requires their IRA-eligible precious metals be stored at an approved depository and cannot store them at home, as doing so can violate IRA rules and incur distribution penalties and taxes.
To avoid these complications, investors should find a gold dealer that has established relationships with reputable storage facilities and IRA custodians for their investments. Many IRA-approved dealers may even provide discounted rates or insurance options which can result in significant savings over time. Furthermore, having your precious metals stored securely will protect it from theft.
