Gold IRAs have higher maintenance fees than other types of IRAs because of the additional costs associated with investing in gold. In addition to brokerage fees and account setup fees, the investor must pay additional costs to store and insure the precious metal. They can also be a premium on sales costs and an additional fee for closing an account. Fraud and theft can pose risks when investing in physical gold and silver.
However, depositaries authorized to hold precious metals for IRA accounts must be insured. There is then the risk that custodian banks will steal from their customers, but this can also be mitigated here by hiring a custodian bank to insure every financial transaction. Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium. Investing in a gold IRA requires the services of a custodian bank, a broker to purchase gold, and an approved depositary to store gold.
Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. A gold IRA is a type of self-directed IRA that allows you to invest in gold bars for retirement. In a regular IRA, you can’t own physical gold, although you can invest in a wide variety of assets that are invested in gold, such as gold stocks or gold ETFs. Unlike traditional paper investments, gold and precious metals will generally appreciate when inflation rises due to increased demand.
One option is to set up a self-directed gold IRA, which allows you to buy physical gold and silver with retirement funds. These risks include a lack of legal and regulatory protection and an increased risk of fraud, particularly when investing in alternative assets. The timeline for starting to claim the required minimum distributions (RMDs) of a traditional Gold IRA depends on your age or the year you were born. The IRS does not allow popular gold coins such as the South African Krugerrand or British sovereign coins to be stored in a gold IRA.
In addition to annual fees and minimum investment amounts, Gold IRA companies may charge various other fees. No verification — With a self-directed IRA, you are solely responsible for evaluating and understanding the investments in the account. Since IRA owners are required to accept distributions when they reach 73 years of age, they could be forced to sell gold at a lower price than they would like. Many investors choose gold to diversify their portfolio, either by investing in a gold IRA or buying the metal outright.
If you’re looking for different gold IRA companies, you should spend some time researching the warehouse they use to store your gold and where it’s located. Once you’ve opened a self-employed gold IRA, you can transfer cash to the account to fund your purchase of physical gold. Unlike traditional gold and silver purchases, you can’t store your IRA gold at home—your custodian must store it in an IRS-approved facility. The most popular gold coins for investors include the Canadian Maple Leaf, the American Gold Eagle and the American Buffalo.