Yes, you can invest in real gold or other precious metals for your IRA. Learn about the special rules for gold IRAs and what you should consider before investing. If you already have an IRA or 401 (k), either Regular or Roth, you have the option to convert some or all of your balance to a Gold IRA. If you have a Gold IRA, you’ll incur costs for managing and maintaining the account and storing and insuring your gold.
A gold IRA was made possible by the Taxpayer Relief Act of 1997 and is a type of long-term retirement account in which a custodian bank stores precious metals for the account holder. Since it’s illegal for you to keep the gold yourself, you need a custodian that stores the gold you buy through your IRA. This is a radical departure from the time when specific requirements for a Roth IRA conversion had to be met with approval from the Internal Revenue Service. With an indirect rollover, you have 60 days from the date you receive the money to transfer the money to your custodian bank or Gold IRA company.
Gold IRA companies are essentially brokers who sell IRS-approved precious metal coins and bars that you can invest in a gold IRA, as well as non-IRA precious metals purchased from collectors. To convert your 401 (k) to gold, you’d have to leave the company you work for and then convert your 401 (k) to a self-directed IRA. Most gold IRA companies buy back gold or other precious metals that they’ve sold you, but these repurchase programs are typically run at a wholesale price, which is around a third cheaper than the retail price. Remember, you buy your IRA gold in dollars before tax, so you’ll be taxed if you accept distributions, as you would with 401 (k), s, and other tax-deferred retirement accounts.
We’ve reviewed more than a dozen Gold IRA companies and identified the best options for various investment needs, whether you’re a beginner or an experienced investor. When it comes to paper money versus gold, there are a plethora of reasons you should consider turning some of your cash into precious metals. Gold IRAs allow you to hold these precious metals in an individual retirement account and offer the same tax benefits as IRAs invested in mutual funds. If someone with a 401 (k) plan leaves their job, as in the case of a retired employee, the option is to simply transfer the 401 (k) money into an IRA.
If the storage and security requirements for holding physical gold seem problematic, there are other ways to add gold to your portfolio. 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.