Gold IRAs have higher maintenance fees than other types of IRAs, which is due to the additional costs associated with investing in gold. In addition to brokerage fees and account setup fees, the investor must pay additional costs to store and insure the precious metal. Rules against holding collectibles Tax legislation prohibits IRA holders from investing in life insurance, S corporation stocks, or collectibles. Some types of gold coins are classed as collectibles and would break the rules
What’s confusing and frustrating is that some gold coins and gold bars are allowed, but others aren’t. And it’s not like the IRS keeps a master list of what’s allowed and what isn’t. Also, make sure you carefully review all IRA specialty companies, custodian managers, and gold storage facilities that you use to implement your strategy. Of course, depositories don’t work for free, and you’ll have to pay storage and management fees for your Gold IRA
People who want to invest in gold but don’t want to bother setting up a gold IRA have other options. So if you want to keep gold in your IRA, you’ll need to set up a self-directed IRA first and then you’ll need to find a custodian that specializes in self-directed gold IRAs. Still, a gold IRA can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers over other financial assets, such as paper money and stocks. If this is the only IRA account or if there isn’t enough liquidity in the other accounts, you’ll also need to have some of the gold sold to raise the money to produce the RMD
You can choose from many of the same IRA types, such as a traditional IRA, a SIMPLE IRA, or a Roth IRA. However, the Taxpayer Relief Act of 1997 expanded the list of assets that could be included in an IRA to include gold and several other precious metals, such as silver, platinum, and palladium. If you really think it’s a good idea, at least check the IRS rules and custodian fees before you deposit gold into your IRA. You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able
to recommend one for you).
Since all gold IRAs must be self-controlled, opening one means that the individual has control over investment decisions. You can set up the SDIRA either as a traditional IRA (tax-deductible contributions) or as a Roth IRA (tax-free distributions). Gold IRA companies work with specialized custodian managers and precious metals warehouses, and they’ve usually already reviewed the options and identified preferred companies and institutions that they recommend. The price of gold tends to rise with the cost of living, meaning that retirement savings held in gold are less likely to be undermined by inflationary
forces than cash alone.
There are a few things you should consider before you decide to convert your savings into a gold IRA.