An IRA is a retirement account that offers tax benefits. While a regular IRA allows you to hold stocks, bonds, and mutual funds, a gold IRA holds physical gold. It allows you to add gold to your portfolio while taking advantage of the tax benefits that IRAs offer. A gold IRA is a retirement account that allows people to invest in physical gold.
They are often used to diversify savings and create an inflation hedge. Like other IRAs, these accounts also offer valuable tax benefits. If you want to hold physical gold in an IRA, it can’t be your regular account. It must be a separate, special IRA, called a Gold IRA.
While many adults typically have one or more individual retirement accounts with investments in stocks, bonds, or mutual funds, a lesser-known type of IRA allows individuals to invest in gold. Because the gold in a gold IRA must be stored in an IRS-approved deposit, you can’t store it in a safe, a home safe, or under your mattress. Physical gold is considered an alternative investment, which is not allowed in a regular IRA. Still, a gold IRA can be a good option for investors who want to diversify their retirement accounts and also take advantage of the hedging benefits that the yellow metal offers over other financial assets, such as fiat currency and stocks.
While there are fewer companies that offer gold IRAs than other types of IRAs, you still have multiple options. A gold IRA is a type of IRA that allows investors to own physical gold, silver, platinum, and palladium. Your Gold IRA provider can help you determine which coins, bars, and other gold bars meet the requirements for storage in a Gold IRA. Gold IRA rules prevent people from taking possession of precious metals in their IRAs, which means you can’t store the metal in a safe in your home.
Gold can certainly have a place in a well-diversified portfolio, but it’s important to weigh the risks of buying gold compared to other assets. Many investors choose gold to diversify their portfolio, either by investing in a gold IRA or buying the metal outright. 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. Gold outside an IRA is considered a collective asset by the IRA, meaning gains are considered capital gains, and sales must be reported and paid with that year’s taxes.
There are several important factors that you should know and consider when trying to decide between investing in a gold IRA or physical gold. Buying physical gold for an IRA isn’t the same as buying physical gold that you want to keep at home or in a safe, although products can come from the same retailer for either purpose.