In short, this means you can’t invest in physical gold bars (or any other approved investment metal) via a standard Roth IRA. The easiest way to invest in gold through your IRA is to buy stocks of gold mining companies or buy an investment fund that includes stocks of mining companies. This strategy is known as buying “paper gold.” There are also gold ETFs (GLD) and mining ETFs that offer indirect access to gold investments.
It’s important to understand all costs and expenses before you buy physical gold to keep it in an IRA. However, the coins or gold bars must be held by the IRA trustee or custodian and not by you as the IRA owner. IRS rules allow funding for a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan. Many Gold IRA companies have preferred custodians, which they either recommend or require from customers, or you can search for a custodian via the RITA website.
There are many rules and regulatory frameworks that you must enforce if you’re considering a gold IRA. We researched 18 legitimate companies that offer Gold IRA services and reviewed them for the highest consumer ratings from the Business Consumer Alliance (BCA). As with a traditional IRA, a gold IRA allows pre-tax contributions, and investment income can then accrue deferred for tax purposes. The best way to reap the benefits of a gold IRA is to use it as an accumulation tool as part of a wider, more diversified investment strategy.
However, if you work with a reliable and customer-focused Gold IRA company, they are likely to have favorable repurchase policies for coins or gold bars, although their transaction costs for gold bars may be higher. Or, if you have a traditional retirement savings account and would like increased exposure to gold, read here how to buy a gold ETF, an exchange-traded fund that tracks the performance of gold. A high-quality Gold IRA company will only work with thoroughly vetted, reputable third-party warehousing companies or secured depositories. Be careful when looking for Gold IRA companies, as many of the less reputable companies are known for passing collectibles and numismatics on to their customers to increase their profit margins.
In practice, this means that the minimum accounts with many Gold IRA companies require you to invest much more than the 5% or fewer financial advisors generally recommend allocating precious metals, which could put your nest egg at too high risk. Presumably, if a reputable brokerage firm acts as an IRA trustee, it won’t allow an IRA to buy shares in an ineligible ETF at all.
