Yes, you can invest in real gold or other precious metals for your IRA. A gold IRA can give you the tax benefits of a traditional retirement account, but you must follow IRS regulations or risk fines and penalties. Buying physical gold for a retirement account can also be more expensive than investing in assets such as stocks, bonds, or mutual funds. It’s important that you understand all costs and expenses before you buy physical gold to keep in an IRA.
Once you hit 70.5 (or 72, depending on when your birthday is), you’ll need to make a minimum payout each year. The exact amount depends on your age, account type, and other factors. You can choose whether you want to make your distributions in the form of cash or using the metals you actually bought. As soon as money is available in the new IRA account, an account representative reviews the current precious metal options
that a consumer can buy.
While gold may well have a place in a well-diversified portfolio, it’s important to weigh the risks of buying gold versus other assets. The IRS has established metal fineness guidelines that determine whether gold or silver in the form of gold bars or coins are acceptable for a gold IRA. Because the gold in a gold IRA must be stored in an IRS-approved depot, you can’t store it in a safe, a home safe, or under your mattress. You don’t want to fund a gold IRA with cash because you’ve already paid taxes on that money, and the point of using an IRA as an investment tool is to take advantage of the tax benefit that comes with using pre-tax dollars
.
In practice, this means that the minimum requirements of many gold IRA companies would require you to invest much more than the 5% or less that financial advisors generally recommend investing in precious metals, which could put your nest egg at too much risk. For more information on what to look for when choosing a Gold IRA company, check out Money’s guide to the best Gold IRA companies. While Advantage Gold appeals to all types of gold IRA investors, it has a particular appeal for first-time buyers. Like a traditional IRA, a gold IRA allows pre-tax contributions, and investment income can then be deferred for tax purposes, and the contribution and income limits are the
same.
Some IRA companies guarantee to buy back the gold from you at current wholesale prices, but you could still lose money if you close the account, which is not usually the case when opening and closing regular IRAs. If you already have an IRA or 401 (k), either Regular or Roth, you have the option to convert some or all of your funds into a Gold IRA. To avoid the prospect of not meeting the rollover limit, many people choose to have their Gold IRA firm coordinate the rollover by transferring the rollover directly from institution to institution. Since IRA owners are required to accept distributions when they reach 73 years of age, they could be forced to sell gold at a lower price than they would
like.
If you’re not sure whether a gold IRA or a silver IRA is right for you, contact a fee-based financial planner who isn’t affiliated with a gold IRA company to determine whether it would be a good addition to your portfolio.
