Can Gold Coins Be in an IRA?
IRAs do not permit investments in collectibles, but an exception can be made for gold coins and bullion that meet purity requirements. Although owning physical precious metals may seem efficient for holding them, their use should be maximized as efficiently as possible.
Many financial advisors recommend creating what’s known as an LLC IRA for use. Unfortunately, however, this structure has never been approved by the IRS and could result in higher custodian fees.
The IRS has strict requirements regarding purity for gold IRAs, only permitting coins and bullion bars produced from an established mint or manufacturer into an IRA account. Products must meet at least 99.5% fineness requirements while being produced by an established company like APMEX’s selection of IRA-eligible gold products.
Although many investors choose numismatic coins over gold bullion bars for legal tender, both are recognized by the IRS regulations as legal tender. Numismatic coins tend to be more costly and don’t often track spot price of gold as closely.
Precious metal investors who are saving for retirement should consider opening a gold IRA. Such accounts allow investors to defer taxes until retirement while also avoiding early withdrawal penalties; however, setting one up can be time consuming and costly, with fees like initial and recurring account setup fees; seller markup on spot price; storage fees at approved depository facilities and cash-out fees being part of the equation.
Gold coins differ significantly from bullion bars by having unique markers and micro-graving, making it more difficult for counterfeiters.
Gold that qualifies for an IRA must meet stringent purity guidelines, whether produced at a national government mint or produced by an accredited refiner, assayer and manufacturer. South African Krugerrands do not qualify as they only have a fineness rating of 995.5–below the minimum required minimum for an IRA. Furthermore, collectible metals cannot be held within your IRA.
When investing in gold, storage options must be carefully considered. The IRS mandates that precious metals held within an Individual Retirement Account be stored with an authorized custodian or trustee; many companies advertise products allowing customers to control and hold onto IRA assets themselves through something called “home storage Gold IRA.” Unfortunately, this structure is neither recognized by nor approved by the IRS and could incur penalties should anything go awry.
Gold coins may be purchased and stored in a self-directed IRA with proper documentation. Investors must abide by IRS regulations prohibiting home storage of collectibles; to prevent taxes and penalties being levied against their metal holdings.
Storage at home places precious metals at risk from theft and can be costly to insure. Furthermore, legal issues or bankruptcy proceedings could put these assets in jeopardy of being taken by the government for seizure purposes.
Many precious metals IRA companies provide investors with an option known as a “checkbook IRA,” which enables them to store physical gold at home without breaking IRS regulations. Unfortunately, this arrangement may violate these rules: precious metals IRA accounts must be stored with an IRS-approved depository and provide evidence that their gold is properly recorded with asset titles; investors might wish to consider more secure offshore storage solutions instead.
Gold coins are a popular option for Individual Retirement Accounts due to their collectibility and ease of sale, though you must ensure the coins you purchase meet IRA eligibility criteria; that means being produced by a national government mint, with minimum fineness requirements set by the IRS. Examples of such gold coins are American Eagle bullion and coin; South African Krugerrands; Australian Kangaroo & Nugget Bullion Coins and Austrian Philharmonic Bullion Coins.
Gold investing can be an excellent way to diversify your retirement portfolio, but always ensure you choose a reputable gold IRA company. When shopping, look for one with transparent pricing on purchases without charging extra fees such as storage or shipping fees; additionally it should offer secure storage and insurance for precious metal investments, have an outstanding industry reputation, provide customer education without bias and use IRS-approved depositories to store the physical products.