Gold has become a cornerstone of retirement portfolios across the world, serving as an effective hedge against inflation and diversifying a portfolio.
Not all gold products qualify as IRA eligible investments; collectibles cannot be owned within an IRA. For your gold to meet these criteria and become an investment vehicle in an IRA:
Purity
Gold investors seeking to add physical precious metals to their retirement portfolio should opt for products which adhere to minimum fineness requirements set by the IRS for inclusion into an IRA. This ensures their gold investments meet IRS guidelines.
The IRS also mandates that precious metal IRA-eligible products, like gold coins and bars, be produced by a reputable mint or refiner and must meet specific weight verification standards before being sold to investors.
Gold investment offers the same diversification benefits of traditional and Roth IRAs; including tax-deferred or tax-free growth potential if managed through a specialist custodian.
Coins
Some precious metals don’t qualify for an IRA because they’re considered collectibles. Coins and bars that have a numismatic value (meaning their collectability rather than gold content is valued) as well as those graded or certified aren’t eligible.
As an alternative, segregated storage may offer greater security for these investments than public ones. You should make sure to choose an investment company with competitive pricing, minimal ancillary fees and reliable customer education programs.
As an alternative, investors seeking a more budget-friendly investment should consider gold bullion bars rather than coins for easier investment. Prices reflect gold weight rather than collectability premiums. No matter which product is chosen, traditional or SEP IRA holders must start taking required minimum distributions at age 72 which will be taxed as ordinary income withdrawals.
Bars
Gold IRAs provide investors with tax advantages while investing in precious metals, but to remain compliant with IRS regulations they must purchase from a certified gold IRA company and be stored in an IRS approved depository facility.
Gold bullion bars and rounds make an excellent option for investors with retirement accounts, as their pricing is determined solely by weight rather than premiums for collectibility. To be eligible, these products must come from an approved mint with at least 995.5 fineness levels – both factors that must be fulfilled to become IRA eligible investments.
Physical precious metals do not offer passive income or dividends, so holding them long term to see any return. As a result, diversifying your portfolio by including stocks and bonds is advised in order to minimize your risk in case the market falls or should you need to sell some precious metals due to retirement expenses.
ETFs
While IRA investors have many choices when it comes to physical gold investments, some may prefer the more liquid, secure and convenient approach of purchasing physical gold ETFs instead. This approach eliminates storage requirements and costs associated with physical investments while providing exposure through stocks of precious metal mining companies.
ETFs come with their own set of fees; such as storage and ongoing account maintenance charges with your IRA custodian.
Your retirement plans should consider whether a physical gold IRA fits with your individual financial situation and goals, so consult your advisor in order to find the most appropriate option. An IRA enables you to build investments tax-deferred until it comes time to take distributions in retirement – something which may prove particularly advantageous if your interest rates are low and could erode purchasing power of traditional interest-bearing assets such as stocks and bonds over time.
