Common Questions About Gold IRAs

A gold IRA is an investment account that allows a person to invest in physical gold to grow their retirement savings. Unlike traditional retirement accounts like 401(k)s or IRAs, gold IRAs use investments in physical gold or precious metals to fund the account. People choose gold IRAs to hedge against inflation or other potential economic instability. 

Gold IRAs work similarly to traditional retirement accounts, except that instead of holding paper assets like stocks or bonds, the account contains physical gold or precious metals, including silver, platinum, and palladium.  

When you open a gold IRA, you purchase gold or precious metals and store them securely in an IRS-approved depository. You cannot take physical possession of your gold: it must remain in third-party custody to count as a tax-advantaged IRA. At Advantage Gold, we help you with this process. 

Like other IRAs, contributions made to gold IRAs are tax-deductible or tax-free. Withdrawals from the account are subject to taxes. Any early withdrawal before age 59 and ½ typically results in a 10% penalty. 

The IRS has strict regulations surrounding the types of metals you can hold in a precious metals IRA. Eligible coins and bullion must have exact purity specifications.

Self-directed IRAs are accounts that allow investors to hold greater control over their retirement investments. With this type of IRA, investors can choose from various options beyond traditional stocks, bonds, or mutual funds. Alternative investments available for these funds include: 

• Real estate 
• Private equity 
• Precious metals 

A third-party custodian or trustee typically manages this type of account and specializes in alternative investments. These trustees ensure the investor complies with all IRS regulations and manage the administrative tasks of the account. 

Self-directed IRAs have one drawback: they are often more complex and have a higher degree of risk than traditional investment accounts. Investors should perform their due diligence and pay attention to associated taxes or fees. To help determine what retirement options are best for you, consider speaking with a financial advisor. 

Investing in gold presents some unique opportunities. For example: 

• Gold has traditionally held its value very well. 
• Gold can potentially hedge against the declining U.S. Dollar and inflation.  
• Some people view gold as a way to preserve assets during political or economic instability.  
• Some people who flee regions impacted by war have used their physical gold to protect their wealth or escape the turmoil. 
• Investing in gold is a perfectly legal and sound way to diversify your portfolio. 

Several types of retirement accounts are eligible for gold IRA rollovers, including: 

• Traditional IRAs 
• Roth IRAs, provided the investor pays taxes on converted funds 
• SEP and Simple IRAs 
• 401(k) and 403(b) 
• Pension plans 

Note that not all investment accounts are eligible for gold IRA rollovers. In some cases, only a portion of the retirement fund may be converted to a gold IRA. 

The IRS has specific guidance around the types and quality of precious metals in a gold IRA. 

The following metals are eligible for this type of retirement account: 

• Gold: 99.5% purity 
• Silver: 99.9% purity 
• Platinum: 99.95% purity 
• Palladium: 99.95% purity 

All precious metals must be produced by refiners, assayers, or manufacturers with accreditation or certification from: 

• NYMEX 
• COMEX 
• NYSE/Liffe 
• LPPM 
• LBMA 
• TOCOM 
• ISO 900 
• Other national government mints that meet the fineness requirements

Once you open a Gold IRA, you must store your precious metals with an IRS-approved third-party depository. We serve our clients’ precious metal storage needs by partnering with Brink’s Global Services USA, Inc. (Los Angeles or Salt Lake City) and Delaware Depository (Wilmington, DE).

Investing in IRA-approved gold, silver, platinum, or palladium can be an essential part of a balanced and diversified retirement portfolio. While investing in and owning precious metals inside a Gold IRA is an exciting idea, retirement investors must know the many IRS rules that must be carefully followed. 

Finding and working with an approved and regulated gold IRA custodian that will hold precious metals for the benefit of the self-directed IRA account holder is a critical step in ensuring those IRS guidelines are adhered to. We work with STRATA Trust Company and Equity Trust Company as our recommended choice as IRA custodian. STRATA Trust Company was founded in 2008 as a wholly-owned subsidiary of Horizon Bank, established in 1905.

Every investment has risks, but most people view gold as a long-term investment. Consider market and economic conditions when determining how long you want to keep your gold and other precious metals. 

One of the many benefits of a gold IRA is its ability to take distributions. You can either take physical possession of your precious metals or liquidate them for cash.

Our buy-back process is simple and straightforward. We’ll never turn away a customer. It’s just one of the things that separate Advantage Gold from the competition. Contact us for more information.