If you’re wondering how to invest IRA in gold as a way to diversify your retirement portfolio, this post gives you all the steps you need.
Ever heard of Jamie Dimon’s quote: “The best way to protect your wealth is to invest it wisely”? We can have different opinions on what investing wisely means for each one of us. But who would not want to see their retirement savings maintain purchasing power for decades? It’s these questions that make some people go for a Gold IRA compared to traditional IRAs.
If we look at the recent inflation numbers briefly, the Consumer Price Index rose to 9.1% in June 2022, the highest it has been since 1981. Think about someone with a $50,000 retirement withdrawal in that year. Now, their money doesn’t have the same purchasing power as in the past. Even though we’ve seen a decrease in inflation rates in the past couple of years, your savings keep losing their purchasing power.
Is a Gold IRA the best solution for you? If so, how do you go about it? Read on to learn everything you should know about these retirement accounts.
What is a Gold IRA?
A Gold IRA is a way to hold physical metals in your retirement account. You might hear people refer to it as a precious metal IRA. That’s different from the standard IRAs that allow you to buy paper investments only, like stocks and bonds. We can trace the origins of the Gold IRAs to the Taxpayer Relief Act in 1997, which made way for investors to start holding physical gold in individual retirement accounts.
You can have both a Gold IRA and a traditional IRA. This means you can diversify your investments without having to choose one over the other. If you already have a traditional IRA, you can also convert it to a Gold IRA. You only need to work with a custodian who specializes in these accounts to handle the transfer.
Anyone who is eligible for an IRA can set up a Gold IRA. It specifically holds physical gold, silver, platinum, and palladium that meet certain purity standards. Like other IRAs, you can withdraw your money after reaching retirement age.
Many people see Gold IRAs as a way to spread out their retirement savings across unrelated assets and protect against inflation.
3 Steps for Gold IRA investing
To invest in physical gold or precious metal IRAs, you’ll need to open an account, fund it, and then buy the metals you want to add to your portfolio. Here are the exact steps:
1. Open a self-directed IRA
The first step to investing in a Gold IRA is to open a self-directed IRA account with a precious metals custodian. The custodian manages your IRA throughout your working life to retirement. They are responsible for purchasing and storing the assets for you while complying with the IRS regulations.
After opening your account, a Gold IRA company like Swiss America can help guide you through the paperwork process. You can expect to give them some personal identification and proof of address documents.
Gold IRA custodian criteria:
Look for a company that’s IRS-approved and has proven experience in handling precious metal IRAs. If you don’t already have a custodian in mind, we often recommend Gold Star Trust. They have strong customer ratings and support.
You’ll always want to find out what the custodian’s fees are for opening an account, storage, and ongoing management. Gold Star’s fees are:
Account set up: $50 one-time fee.
Annual fee: $90 yearly maintenance fee.
Storage: The commingled depository fee is $100 per year, and the segregated depository is $150 per year.
Buy/sell/exchange: No fees.
2. Fund your account
Once your Gold IRA account is ready, the next step is to fund it. You can do this by transferring money from an existing retirement account, like a 401(k) or a traditional IRA. Another option is to start making direct monthly contributions if you’re just getting started with retirement savings.
Gold IRAs have the same contribution limits as traditional IRAs. For 2025, this means a maximum annual contribution of $7,000 or $8,000 if you’re 50 or older. So, if you want to have both a Gold IRA and a traditional account as well, you’ll need to distribute your annual contributions between them.
3. Buy and store your gold
After funding your account, you can decide which precious metals to add. These could be physical bullion bars or coins of IRS-approved metals. The rules include details around purity:
Gold 0.995
Silver 0.999
Platinum and palladium 0.9995
There are also specifications on the bullion manufacturer and coin type, including:
Produced by an accredited/certified refiner, assayer, manufacturer, or national government mints.
Non-proof coins must be in brilliant, uncirculated condition and free from damage.
Proof coins must be in their original mint packaging and include a certificate of authenticity
Your precious metals dealer can help you with which metals to buy that meet all these criteria. From there, you’ll direct your custodian to buy on your behalf, and they’ll receive and store your metals.
Types of Gold IRAs or precious metals IRAs
Here are the common types of gold individual retirement accounts you’ll come across:
Traditional Gold IRAs: You fund these accounts with pre-tax dollars. They allow your investments to grow tax-deferred until you withdraw them in retirement, at which point you’ll pay taxes on the distributions.
Roth Gold IRAs: These accounts use after-tax dollars for contributions. So, you won’t pay taxes on qualified withdrawals during retirement. It makes more sense if you’re expecting to be in a higher tax bracket later.
SEP Gold IRAs: Simplified Employee Pension Gold IRAs are for self-employed individuals or small business owners. These accounts allow for higher contribution limits and can include contributions for employees as well.
IRS rules and regulations for Gold IRAs
The Internal Revenue Service sets the specific rules and regulations that investors must follow to hold precious metals in a Gold IRA. These rules and regulations mostly concern storage, approved metals, prohibited transactions, and withdrawals.
Following these guidelines keeps the tax advantages of your retirement account.
IRS storage rules for a Gold IRA
One of the rules is that you must store physical gold in an IRS-approved depository. So, you can’t keep your precious metals at home or in a personal safe. This is because if you hold gold or other precious metals in your possession, the IRS considers this an early distribution.
IRS rules for withdrawals
If you have a traditional IRA, you can’t just leave the money in it forever. At some point, the IRS wants to get paid and charge you taxes 🤓. So, at age 72, you’ll have required minimum distributions (RMDs) from this account.
If you have a Roth Gold IRA, this doesn’t apply since you’ve already paid taxes before moving the money into this account.
Pros of holding physical gold in an IRA
Here are the benefits of a specialized individual retirement account for physical precious metals.
Safe haven asset
When the world is in chaos, people turn to gold. Why? It’s because gold is universally accepted, and it doesn’t rely on one country’s currency. So, if something bad were to happen, people know that they could take their gold to any country and convert it to money.
And, it’s not just individual investors. Central banks that handle treasuries for their country also buy physical gold to protect their country’s financial stability. This is also partially why gold is up over 30% in the past year, as these banks keep adding to their gold reserves.
Diversification
It’s always a good idea to diversify your assets. This is smart no matter what you invest in. You don’t buy stock in just one company; you buy across the market. The same applies to the types of assets. Gold investments give you a way to de-risk your portfolio because it doesn’t follow the other markets.
So if the stock market is down, gold can be up. Or, if real estate crashes, gold just keeps plugging away and growing in value. Most investors like holding varied assets that give them the potential to preserve wealth if other areas crash.
Inflation hedge
You’ve likely heard that gold is an inflation hedge, but why is that? First, there’s only so much gold in the world, and we can’t just make more. So – it’s scarce, which is different than currency, which the government can easily just print more. The more they print, the less your money can buy.
Tax benefits
A gold or precious metal IRA gives you all the same tax benefits as a traditional IRA. Depending on which IRA type you set up, you can defer taxes on your gold investments, or you can grow your account tax-free.
No counterparty risk
Physical gold doesn’t rely on an internet connection, government policies, or a bank for your asset to be worth something. You don’t need a company to meet its revenue targets, and it won’t matter if there’s a major cyber attack. None of these things affect your gold.
Most investors like this element of control and independence.
Cons of holding physical gold in an IRA
There’s a few disadvantages to consider if you are looking to open a special gold IRA account:
Fees
As we mentioned above, you’ll have some fees. These include custodian account fees and storage costs. But the reality is you’ll have fees with traditional IRA accounts, too, like broker’s fees and management fees.
Non-income producing
Gold isn’t an income-producing asset. It’s really meant as an “insurance policy” and a way to protect your wealth. You won’t get dividends or cash flow, but you also won’t have as many dramatic ups and downs as the stock market. Gold gives you peace of mind knowing that you’re protecting some of your wealth.
Gold IRAs vs other IRAs
Asset types allowed
The first comparison is in terms of asset types. Other IRAs hold paper assets like stocks, bonds, and mutual funds. A Gold IRA allows investors to hold physical gold bullion bars and coins as well as selected precious metals.
Costs
In terms of costs, some people believe traditional retirement accounts are cheaper to maintain. But the reality is that a Gold IRA can often be less expensive overall. That’s because traditional accounts may come with hidden fees due to active management, while most Gold IRAs involve a one-time setup fee and annual storage costs.
Counterparty risk
Another variation is the risk factors. Traditional retirement accounts carry higher third-party risks since they depend on market performance and asset managers. Gold IRAs generally present less risk because they involve tangible assets that you can control.
Withdrawal options
Also, both types of accounts offer tax advantages, but Gold IRAs provide a couple of options for required minimum distributions. You can sell your gold and get the proceeds. Or, you can actually take physical possession of your gold instead of selling it off. Many investors like this flexibility to keep their gold assets if they want.
Level of control
With a traditional IRA, a broker usually manages your investments. You rely on them to make decisions on your behalf. In a Gold IRA, you have more control. You can direct your trades and choose the specific metals you want to invest in.
Gold IRAs vs. non-retirement gold
As you may have already noticed, investing in Gold IRAs has some differences compared to owning physical gold investments outside of a retirement account.
Control over your investment
With a Gold IRA, you invest in physical precious metals through a retirement account. This means you enjoy tax advantages and can hold gold alongside other precious metals like silver and platinum.
However, you don’t have direct possession of the gold since it stays in an IRS-approved depository until retirement age.
Owning physical gold outside of an IRA means you have complete control over your investment. You can buy any gold coins or bars and keep them at home or in a safe deposit box.
Costs
Gold IRAs do have higher fees because of storage and management costs. If you just buy physical gold directly, you might have fewer ongoing costs. Just be aware you’ll still need to consider security measures for storing it.
Accessing cash
Selling your non-retirement gold can be straightforward. You can sell it to a precious metals dealer or an individual whenever you choose. Accessing your funds from a Gold IRA involves specific IRS rules around withdrawals and RMDs.
Taxes
For tax implications, Gold IRAs allow for tax-deferred growth, so you won’t pay taxes on gains until you withdraw funds during retirement. Gold investments not in a retirement account don’t have this benefit. If you sell for a profit, you will have capital gains taxes in that same year.
Both options have their pros and cons, and maybe a place in a diversified portfolio.
Gold IRA from Swiss America
As we mentioned above, Gold IRA custodians do not sell physical precious metals. To buy gold, you’ll work with a precious metals dealer like Swiss America. So, how do you evaluate Gold IRA companies and make the best choice? Here are our top recommendations:
Longevity
Look for a Gold IRA company that has been in business for decades. This means they have been through various economic ups and downs. Plus, it means they aren’t a fly-by-night operation looking to scam customers.
Since the early 1980s, Swiss America has helped investors through various economic cycles and market shifts. Our decades of experience make us a seasoned, trustworthy partner for your gold investments.
Customer reviews
Check out reviews and customer testimonials. The best company should have numerous positive reviews and ratings.
Swiss America’s thousands of happy clients enjoy fast delivery of high-quality metals, responsive and knowledgeable customer service, and consistent performance that meets or exceeds expectations.
Education and Advice
The right gold dealer should provide education and guidance to help you make the best decisions for your situation. Swiss America focuses heavily on investor education with resources like:
Video and podcast: We share economic news and updates in our regular podcast and Youtube videos to help you understand the drivers that impact precious metals investments.
Research reports: You can find several in-depth research reports from our team covering topics like The Secret War On Cash, The Timeliness Truth About Gold & Silver, and The Silver Report.
Daily news: Get the latest update on what’s happening in the world and its impact on Gold IRA investing through our newsletter or daily news page.
Broker expertise: Every member of our team has a deep understanding of the gold market and extensive training. We’re here to help you evaluate options, convert your IRA to gold, choose the right custodian, and even secure storage methods.
Transparent pricing
Look for companies that are up-front about pricing for Gold IRAs and precious metals investments. At Swiss America, we provide transparent pricing for both our metals and any transaction costs. You’ll know exactly what the premium is above the spot price and any establishment fees for Gold IRA accounts.
Reporting
Swiss America customers can view their account value at any time via our online portal. This information gives you the real-time value of your physical gold or other metals.
Gold trade program
Companies should also make it easy for you to sell gold if needed in the future. Swiss America’s gold trade program lets you sell your gold back to us and gives you liquidity for emergencies or portfolio rebalancing.
Final thoughts on investing in a Gold IRA
Having a Gold IRA account can help you hold physical gold and other approved precious metals for retirement. You get all the tax benefits of IRAs and the pros of investing in precious metals. This gives you a hedge against inflation and creates a diversified portfolio beyond stocks, mutual funds, and bonds.
If you want to learn more about investing your IRA money in gold or other metals, connect with the Swiss America team today!
How to invest IRA in gold: FAQs
Can I hold physical gold in a traditional IRA?
No, traditional IRAs do not allow physical gold investments. You’ll need to open a Gold IRA account to hold physical gold and other precious metals for retirement.
Can I purchase gold with a Roth IRA?
Yes, you can purchase gold with a gold Roth IRA, but you’ll make contributions with after-tax dollars.
Can I take possession of the gold in my Gold IRA?
No, you cannot take possession of the gold in your Gold IRA while it is part of the IRA.
How do you buy gold in an IRA?
To buy gold in an IRA, you need to open a self-directed IRA with an IRS-approved custodian, fund the account, and then direct the custodian to buy IRS-approved gold bullion or coins.
Note: The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.
