To invest IRA funds in gold, you must set up a self-directed IRA. This is a type of IRA that the investor manages directly and is allowed to own a wider range of investment products than other IRAs. 5 For a gold IRA, you need a broker to buy the gold and a custodian to create and manage the account. Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium. Investing in a gold IRA requires the services of a custodian bank, a broker to purchase gold, and an approved depositary to store gold.
Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. Gold and other metals can also provide liquidity in your account, so they can easily be converted into cash when needed. When you’ve found a custodian bank and broker that you’re happy with, you can open your account and buy your precious metals. Birch Gold Group charges a flat annual fee and not a percentage of the account value, which could benefit investors with large balance sheets.
While the custodian or trustee oversees accounting, the SEC mandates that they are not responsible for the gold seller or broker that the investor uses. Many IRA precious metals companies also sell IRA-approved silver, platinum and palladium in their IRAs in addition to gold. On the other hand, pre-tax funds that go into a traditional IRA aren’t taxed until they’re withdrawn. Those who prefer to invest in gold company stocks (such as Barrick Gold), in mutual funds of such companies (such as Fidelity Select Gold Portfolio), or in ETFs that track the performance of a gold index (such as SPDR Gold Shares) can do so with a mainstream IRA.
Once you’ve met the requirements, the company will send a check with your money to either you or your Gold IRA custodian. Individual retirement accounts (IRAs) offer tax-deferred or tax-free growth, meaning that investments made with an IRA can be larger than similar investments made outside an IRA. Some gold IRA companies describe their offerings as diverse because you can hold more than one type of precious metal in them. If you choose to fund the account with assets that are currently in another IRA, the Gold IRA company will help you manage the rollover (more on that process below).
You should consult with an independent financial advisor to discuss your investment timeline, goals, and risk tolerance to determine whether a Gold IRA investment or a Silver IRA deserves a spot in your retirement portfolio. Self-directed IRAs can be traditional IRA (traditional SDIRA) or Roth IRA (Roth SDIRA), and they have the same rules regarding contributions, income limits, and distributions as mainstream IRAs. This specialized IRA can help diversify a portfolio, as precious metals, including gold, are often seen as an investment to combat inflation. However, it’s important to research whether an IRA account for precious metals makes sense for part of your retirement savings.
Like a traditional IRA, where you can hold stocks, bonds, or mutual funds, a gold IRA is a tax-preferred investment vehicle and is the only option to hold physical precious metals in an IRA.