To ensure compliance, it’s imperative to verify that what you’re buying meets IRS standards and is an approved precious metal. For gold, this means that the purity must be 99.95%, while the purity for silver, platinum and palladium must be almost perfect 99.99% or higher. The IRS has strict rules for physical gold and other precious metals. For example, to be IRS-eligible, gold bars must have a purity of 99.5%, silver a purity of 99.9%, and platinum and palladium a purity of 99.95%.
You can’t add gold or precious metals to your Gold IRA yourself, even if you already own IRA-eligible metals or plan to buy them for investment purposes. Popular gold IRA companies include Orion Metal Exchange, Birch Gold Group, Red Rock Secured, Gold Alliance, Oxford Gold Group, and Goldco. Gold IRAs have higher maintenance fees than other types of IRAs because of the additional costs associated with investing in gold. Self-directed IRAs can be traditional IRA (traditional SDIRA) or Roth IRA (Roth SDIRA), and they have the same rules regarding contributions, income limits, and distributions as mainstream IRAs.
Given that the stock market typically rises by around 7% in an average year, it would be rare for a gold IRA to outperform other retirement investments. Many investors choose gold to diversify their portfolio, either by investing in a gold IRA or buying the metal outright. Many IRA precious metals companies also sell IRA-approved silver, platinum and palladium in their IRAs in addition to gold. Most gold IRA companies have relationships with top custodian banks and usually offer these services as part of their package.
According to the Internal Revenue Service, gold IRAs are self-managed IRAs, which means they can hold alternative investments, such as precious metals. The rules for withdrawals (selling the gold for cash) depend on whether the gold IRA is a traditional or a Roth IRA. The custodian is responsible for securely storing your gold and precious metals until you ask your IRA gold custodian to sell or distribute your gold to you. For a gold IRA, you need a broker to buy the gold and a custodian to create and manage the account.
Investing in a gold IRA can be a smart way to hedge against inflation and take advantage of some helpful tax benefits. We’ve reviewed more than a dozen Gold IRA companies and identified the best options for various investment needs, whether you’re a beginner or an experienced investor. A gold IRA is characterized by the fact that you own the actual precious metals, as opposed to stocks or fund shares in mining companies.
