In short, this means that you cannot invest in physical gold bullion (or any other approved investment metal) through a standard Roth IRA. The easiest way to invest in gold through your IRA is to buy shares in gold mining companies or buy a mutual fund that includes shares of mining companies. Buying gold in an individual retirement account (IRA) is promoted as a way for savers to diversify their investments. Gold and other precious metals are considered a hedge against inflation and can rise in value during periods of stock market volatility.
A Roth Gold IRA is a type of self-directed IRA that you can use to invest in various tangible assets, such as art, antiques, collectibles, and even real estate. If you already have an IRA or 401 (k), regular or Roth, you have the option of transferring part or all of your funds to a gold IRA. Gold and other precious metals are just one of the many things you can buy with a Roth Gold IRA. For many, that means opening a Roth IRA, a type of account that offers tax-free withdrawals once you reach retirement age.
A key rule to know about keeping physical gold in an IRA is that precious metals MUST be kept in an approved custodial institution, such as Delaware Depository Service Company or Brink's Global Services, and not in your home or in a safe. If you're not sure if a gold or silver IRA is a good fit for you, consult a commission-only financial planner who is not affiliated with a gold IRA company to determine if this would be a good addition to your portfolio. Some IRA companies will guarantee that they will buy you gold again at current exchange rates, but you could still lose money if you close your account, something that usually doesn't happen with opening and closing regular IRA accounts. Read more about what to look for when selecting a gold IRA company in Money's guide to the best gold IRA companies.
If gold seems like a good option to you, Sentell suggests investing no more than one-third of your retirement funds in a gold IRA. A gold IRA is a kind (pun intended) of an individual retirement account (IRA) that allows investors to own physical gold, silver, platinum and palladium instead of more common assets, such as cash, stocks and bonds, to which normal IRAs are limited. Opening a self-directed IRA and investing in precious metals is a bit more complicated than opening a traditional IRA or a Roth IRA. It's important to make sure you understand all the costs and expenses before buying physical gold to keep it in an IRA.
With a gold and silver Roth IRA, your contributions are made after taxes, which means that you'll pay taxes on the money before you deposit it in your IRA account. People who believe that physical possession of gold or other precious metals is safer can gain that peace of mind with a gold or silver IRA. Gold IRAs are normally defined as “alternative investments”, meaning that they are not traded on a public exchange and require special experience to value them. To avoid the possibility of not meeting the reinvestment limit, many people choose to let their gold IRA company coordinate the transfer through a direct transfer from one institution to another.