Are you worried about how the economy is affecting your retirement savings? Gold’s value doesn’t depreciate with the dollar, meaning gold investing can be a protective haven from economic downturns and stock market volatility. In fact, the price of gold tends to increase when the dollar’s value falters because investors turn to precious metals to secure the value of their assets.
Investing in IRA eligible gold through a self-directed retirement account gives you security and valuable tax benefits. Gold IRAs allow investors to invest in assets other than stocks, such as precious metals. However, the IRS has specific standards for the kind of gold you can have in your IRA.
Keep reading to learn more about IRA-eligible gold and the details and benefits of opening a self-direct gold IRA.
Gold Products That You Can Include in Your IRA
The IRS has a pre-approved list of precious metals eligible for IRA investing. All products must meet certain purity, weight, and manufacturing standards, though a few exceptions on the list have approval despite not meeting the specifications.
Generally, gold bullion coins, bars, or rounds must be 99.5% pure gold. Some gold coins aren’t eligible because they’re rare or collectible even though they meet the purity requirements. Any certified or graded gold coin isn’t suitable for holding in an IRA, even if it’s on the approved list.
Gold Coins
The following gold coins are IRA-eligible:
- American Eagle Gold Coins
- Australian Kangaroo Gold Coins
- Austrian Philharmonic Gold Coins
- Canadian Maple Leaf Gold Coins
- Chinese Gold Panda Coins
- Britannia Gold Coins
- Proof American Eagle Coins
- American Buffalo Bullion Coins
The American Eagle gold coins are 91.67% pure but remain a popular IRS-approved option for gold IRAs.
Gold Bars
IRA-eligible gold bars include the following:
- Credit Suisse Gold Bars
- Johnson Matthey Gold Bar
- Valcambi Gold CombiBar
Many gold bars and rounds, including the ones above, are 99.99% pure gold.
Why Are Some Gold Products Not Eligible for IRAs?
Gold bullion products must meet specific requirements to be IRA-eligible. The IRS has a list of conditions, including:
- Gold coins or bars must be at minimum 99.5% pure gold.
- Gold in an IRA must stay in an IRS-approved depository.
- Gold IRAs must have a custodian that buys and stores gold on the account holder’s behalf.
As the account holder of a self-directed IRA, you choose which gold products to buy and which depository to store them in, but the custodian must buy the gold and arrange storage for you. In addition to the requirements above, IRA-eligible gold coins must meet the following conditions:
- Proof coins must be encapsulated in mint packaging and include a certificate of authenticity.
- Bullion coins must be in uncirculated, brilliant condition.
- All coins, bars, and rounds must come from an accredited or certified manufacturer or national government mint.
- Small bullion bars must meet exact weight specifications.
While some coins meet purity requirements, they aren’t IRA-eligible because they’re collectibles. These coins include UK Sovereign coins, French 20 Franc gold coins, and US Liberty coins.
Do Certain IRA-eligible Gold Products Perform Better?
The value of IRA-eligible gold products, or any gold products for that matter, sticks closely to the spot price of gold. The spot price is the current market value for gold, determined by the near month’s futures contract with the most volume. The value of gold is the same regardless of the manufacturer, so the mint you choose to buy from depends on your preferences.
However, certain IRA-eligible gold coins could have a slightly higher value because of their desirability as collectibles, but their value will still be close to the gold spot price. Your return on investment won’t be notably different between various gold products, such as bars and specific coins, but it might be easier to liquidate coins than bars.
Should You Only Buy Gold Products That Are IRA-eligible?
You can invest in gold and other precious metals without opening a self-directed IRA, but the IRA gives you valuable tax benefits that help your retirement. While a gold IRA is excellent for individuals looking to build a safe retirement fund, it might not benefit everyone.
You should consider the following before starting a self-directed gold IRA:
- Contribution limits. The IRS sets a $6,000 per year contribution limit for individuals younger than 50 and a $7,000 per year limit for anyone over 50. (Note that you could still buy gold outside of your IRA.)
- Minimum investment. Some gold IRAs require an initial deposit minimum of $25,000, which can be challenging to reach if you don’t have an existing balance to roll over.
- Fees. Gold IRAs might be more expensive than traditional IRAs because there are more fees, including setup, account maintenance, and storage fees.
- Early withdrawal penalty. The IRS will impose a 10% tax penalty on any withdrawals before retirement age, which is 59 and a half years old.
- Theft and fraud. You must hire a custodian to take care of transactions, records, and storage of your gold bullion, leaving you open to the risk of fraud and theft. It’s vital to research gold IRA companies and custodians before trusting them with your retirement account.
A gold IRA might not be suitable if you aren’t investing in your retirement or might need to withdraw before retirement age.
However, a gold IRA is an excellent solution if you are searching for a way to build retirement savings with less risk while still getting tax benefits from the IRS. You’ll have complete control over the gold products you buy with your account’s funds, and the value of your savings will be safe from economy-related issues like inflation or market crashes.
A self-directed precious metals IRA allows you to hold physical assets rather than risking your retirement on volatile paper investments like stocks and bonds. View our list of the top gold IRA companies to discover whether precious metal investing is right for you.
Tips for Buying IRA-eligible Gold Products
You have several options for starting your self-directed gold IRA, including:
- Transfer funds from another savings account, such as a traditional or Roth IRA
- Roll over your employer-sponsored savings accounts, such as 401(k) or 403(b)
- Open a new account
If you already have a retirement savings account, either on your own or through your employer, you can likely use those funds for your gold IRA. If you don’t have a retirement account with funds to roll over, you will still have to meet the minimum initial deposit amount before you’re eligible to purchase gold for your IRA.
No matter where the funds come from, the steps to starting your gold IRA investing journey are the same:
- Open a self-directed IRA
- Fund the account
- Appoint a custodian
- Choose IRA-eligible gold products to buy
- Store your gold in an IRS-approved depository
When you set up a gold IRA, you’ll typically work with a professional bullion dealer from whom you intend to purchase gold or other precious metal products to add to your account. The company you choose will help you set up your IRA and appoint a custodian as trustee. Professional gold IRA companies usually also partner with depositories you can use to store your gold.
Can You Store IRA Gold Products in Your Home?
The IRS does not allow account holders to store their own gold, whether it’s in their home or a security deposit box. When you take the gold into your possession, the IRS considers it as distribution. You’ll lose your tax-deferred benefits and potentially receive a penalty if you’re under retirement age.
You can store your gold in IRS-approved depositories. These depositories are highly secure storage facilities for gold and other precious metals, and many gold IRA companies have preferred storage locations you can use.
However, you don’t have to keep all of your gold in an IRA. You can purchase IRA approved or non-IRA-approved gold outside your retirement account and store it in your home or another secure location. You’ll miss out on tax advantages and increase the risk of theft, but you’ll have more freedom with investment amounts and storage.
Learn about Gold IRAs and Investing Today
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