Can I Hold Gold in a Self-Directed IRA?
Gold is an attractive investment choice for self-directed IRAs, but investors should conduct a careful due diligence process when researching dealers. Nontraditional assets that can be purchased using a self-directed IRA include real estate (though there may be specific rules related to investing), startups, private lending arrangements, tax liens and precious metals like gold, silver and platinum.
IRAs and Precious Metals
Self-directed IRAs are an increasingly popular way of holding precious metals, providing one of the easiest ways to do so. This method involves setting up an account with a custodian such as a bank, credit union, trust company or similar institution which will act as the administrator for your assets while not offering investment advice.
Physical gold, platinum and palladium bars may be stored in an IRA as well as coins that meet certain purity and weight standards; however, most IRAs tend to hold exchange-traded funds (ETFs) instead due to their more efficient nature.
Before opening a precious metals IRA, it’s wise to consult with a financial advisor or tax professional. They can help determine if this investment matches with your goals and budget, while being aware of all fees associated with storage and insurance as well as withdrawal timeframes as metals are not liquid investments.
Precious Metals in a Self-Directed IRA
Gold IRAs can be an excellent way to diversify your retirement portfolio, yet financial experts advise allocating no more than 10% to physical precious metals due to high upfront costs associated with opening a self-directed IRA and dealing with dealers, custodians and depository providers.
IRS has specific rules regarding which metals qualify and their storage requirements, so it’s crucial that you work with a reliable dealer and storage provider. Some custodians charge asset valuation fees per transaction which could quickly add up.
If you choose to purchase physical gold and other metals for your IRA, be certain that they meet the minimum fineness standards established by the IRS and are stored safely with an IRS-approved depository like Delaware Depository. Furthermore, home storage could constitute distributions and be subject to an additional 10% penalty fee if you’re under age 59 1/2.
Precious Metals in a Traditional IRA
Add physical precious metals to an IRA requires extensive planning. You’ll require a dealer that offers purchases eligible for inclusion in an IRA, and a custodian and depository for storage purposes; keeping gold bullion or coins at home would violate IRS standards, so any storage companies you consider must meet IRS standards as well.
The IRS imposes stringent rules regarding which precious metals may be included in an Individual Retirement Account (IRA). Gold bars and coins accepted into self-directed IRAs must be hallmarked by either NYMEX or COMEX-approved refiner/assayers with 24 Karat purity (0.995+ fineness), without alloys such as silver.
An established precious metals IRA company can assist in this process and often work with multiple custodians and depositories to keep costs to a minimum. Be wary when considering your options in regards to fees.
Precious Metals in a Roth IRA
As with some retirement account options, precious metals allow investors to invest in physical gold directly. That is why special care must be taken when investing in this form, such as working with an authorized dealer, custodian and depository to avoid prohibited transactions.
IRAs may hold IRS-approved bullion coins and bars, silver and platinum bullion as well as certain government-minted coins such as American Gold or Silver Eagles that meet purity requirements. Unfortunately, an IRA does not permit ownership of collectibles or anything besides physical precious metals.
Add precious metals to an IRA as a means of diversifying and protecting against inflation. It is a popular option among investors looking for non-correlated investments beyond stocks and bonds; however, investors must be mindful that price appreciation alone determines price increases.
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