How to Buy Physical Gold in IRA
An investment in physical gold IRAs can provide an effective means to diversify your retirement portfolio, but before making any decisions it is essential to understand all associated rules and fees.
An IRA-approved metals dealer and custodian who specializes in precious metals should be used when purchasing and holding gold in an IRA account. Be wary of companies charging excessive storage or handling fees.
Gold has almost zero correlation with stocks and bonds, making it an excellent way to diversify an IRA portfolio and protect it against inflation – something which erodes over time the purchasing power of money.
Precious metals must typically be purchased through a custodian who specializes in self-directed IRAs, such as banks, trust companies, credit unions or brokerage firms that allow investors to select their investments themselves and hold them in tax-deferred accounts.
Custodians typically provide you with a list of approved metals dealers from which you can select, then ask the custodian to send funds directly to them in order to purchase your gold, silver or platinum bullion bullion bullion from these dealers and store your metals safely within an IRS-approved depository.
Investors looking to purchase physical gold through an IRA should also consider storage costs. Failing to do so could lead to costly IRS penalties; consider paying a storage facility such as Safe Deposit Box for their metals for maximum safety and peace of mind.
Gold can be an attractive asset to include in an individual retirement account, providing protection from financial turmoil and inflation. But not every portfolio may suit this investment opportunity. Before rolling over into gold IRA, take time to consider both its advantages and drawbacks before making your decision.
As with other retirement accounts, a Gold IRA provides tax-deferred savings vehicle. But unlike stocks or mutual funds, physical gold doesn’t generate income and so you will owe taxes when withdrawing it at maturity or when taking required minimum distributions (RMDs).
Gold IRA investors must account for not only setup fees and maintenance charges but also metal-specific fees when considering investing. These may include seller markup, storage fees and insurance costs to keep precious metals secure – especially when cashing out assets with dealers offering less than the market price for them.
Gold IRA fees tend to be higher than other types of IRAs. These costs include setup and maintenance charges as well as custodian, transaction, storage fees. They may vary by institution.
Fees associated with buying physical metals like bullion bars or proof coins that require production and shipping costs to produce and ship can add up quickly, especially given gold’s non-liquid nature – more suitable as long-term investments than short-term bets.
Moy emphasizes the importance of researching and comparing fees before selecting a gold IRA provider. He advises choosing an established, competitively-priced firm with transparent pricing schemes; hidden fees could indicate otherwise. He further recommends finding one offering educational resources, dedicated account manager service and video resources from their experts – while being transparent with fees they charge and clearly disclose them on their website.
Gold IRAs may seem like an appealing safe haven investment during times of stress and uncertainty, yet investors should keep in mind that gold may not offer as high a return as stocks or mutual funds do; no dividends or interest payments would provide additional retirement income streams.
As well, storing gold purchased with an IRA at home (including in safety deposit boxes or hiding it away in closets) in violation of IRS rules would qualify as a distribution, potentially incurring taxes and penalties that exceed 59.5.
To avoid this trap, investors wishing to hold physical precious metals in their IRA should select a self-directed custodian who specializes in managing gold IRAs. They could also buy it through standard brokerage accounts through ETFs, mutual funds or stocks of gold mining companies – however these options come with additional costs associated with purchase, storage and management fees.