Investing in gold IRAs is a great way to secure your retirement funds and diversify your portfolio. With a gold IRA, you can hold physical metals such as coins or ingots, as well as securities related to precious metals, in your portfolio. It's important to understand the advantages and disadvantages associated with gold IRAs before making an informed decision. A gold IRA is a type of self-directed IRA (SDIRA) that allows retired investors to invest in physical gold.
It should be kept separate from a traditional retirement account, although the rules governing aspects such as contribution limits and distributions remain the same. You can't own physical gold in a normal IRA, although you can invest in a variety of assets exposed to gold, such as gold stocks or gold ETFs. You should also select a precious metals dealer who will make the actual purchases of gold for your IRA (your custodian can recommend one). Unfortunately, the gold IRA industry is not regulated, which means that some companies have resorted to using unethical tactics to attract customers. It's fortunate that there are so many tools available for learning about self-managed retirement assets, such as gold IRAs. Before opening a gold IRA, keep in mind that it's not the only way to invest in gold with your retirement funds.
In some cases, the company will also act as the custodian for your account, which means that it will also handle the paperwork and compliance with the IRS in relation to your IRA. Self-directed IRAs can be traditional IRAs or Roth IRAs, and the difference comes down to how you want your money to be taxed. The IRS doesn't allow popular gold coins, such as the South African Krugerrand or United Kingdom sovereign currencies, to be held in a gold IRA. Gold and silver purchased through a precious metals IRA must be stored in an approved bank or depository. In addition, while the IRS allows gold coins such as the American Gold Eagle, the American Buffalo, the Canadian Maple Leaf and the Australian Gold Nugget, it does not allow investing in gold coins from the South African Krugerrand or British sovereignty. Any reinvestment in a gold IRA will follow the same rules that apply to renewing a traditional IRA or a Roth IRA.
While some companies sell “self-storage” IRAs, their legality is questionable and you could face penalties or fines from the IRS for personally storing your gold purchases.