Should you invest in a gold IRA?

Gold IRAs allow you to purchase physical gold and other precious metals to save for retirement.

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With rising interest rates, stock market volatility, and the possibility of a recession looming overhead, many Americans are taking this time to shore up their finances and reassess their portfolios.

For some, moving into gold investments might be a priority, as gold tends to be a strong hedge against inflation and a long-term protector of wealth.

Fortunately, there are many ways to invest in gold, including physical gold purchases, gold stocks, and gold IRAs. The latter — the gold IRA — is an option for those looking for a tax-advantaged strategy. Below we will discuss what you need to know about gold IRAs and how they work.

If you think you could benefit from the benefits a gold IRA provides then start by requesting a free information kit to learn more. 

How a gold IRA works

A gold IRA — also sometimes called a precious metals IRA, is a special type of retirement account that allows you to hold physical gold rather than just stocks, bonds, and mutual funds, like other IRAs.

There are rules, though. You can only buy approved precious metals — gold, silver, platinum, and palladium — of a certain type and quality. It also must be stored with an IRS-approved, non-bank trustee. You can’t just keep your gold at home.

Gold IRAs work similarly to other retirement accounts in that you must fund the account first and then purchase your investments (in this case, gold) through a reputable dealer. There are many companies that can help. You can easily explore your options via the table below.

Benefits of investing in a gold IRA

There are several benefits to investing in a gold IRA. First is their tax treatment. Depending on which type you open, your contributions may be tax-deductible (with self-directed gold IRAs) or tax-free upon withdrawal (with Roth gold IRAs). 

Gold IRAs are also a good way to diversify your portfolio, especially if you’re heavily invested in stocks and more traditional assets. They can be a good hedge against inflation, too, so if you want your wealth to retain its long-term value despite any fluctuations in the power of the dollar, it might be a smart strategy to consider. 

How to get started

To open a gold IRA, you first need a custodian — a bank, trust, or brokerage approved by the IRS to manage these types of accounts. Make sure to shop around for your custodian, as fees, service, and other factors can vary widely.

Once you’ve opened your IRA, you can fund the account with a rollover from another retirement account, like a 401(k) or traditional IRA. You can also make a cash contribution using a check or wire transfer.

Then, you can choose the precious metals dealer you’d like to work with, select your approved bullion, and direct your custodian to purchase the assets on your behalf. After they’re purchased, the metals will need to be transferred to an IRS-approved depository for safekeeping. Your custodian should be able to recommend one in your region. 

Goldco can help you get started today!

Other considerations

While gold IRAs do have their perks, there are disadvantages to these accounts, too. They might come with high setup and maintenance fees, and since they require distributions starting at age 72, they could mean selling your assets at a loss if the timing’s not right.

Finally, gold isn’t a high-growth investment, so if you’re looking for something that’s going to deliver big returns, a gold IRA probably isn’t it.

If you are considering a gold IRA, talk to your tax preparer or an investment professional to see if they’re right for your goals and finances. You can also request a free information kit to learn more.