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5 Things to Know About Gold IRAs

Moneymagpie Team 2nd Jan 2024 No Comments

Reading Time: 3 minutes

Gold IRAs are specialized individual retirement accounts (IRAs) that let retirement investors hold physical gold as a retirement investment rather than traditional bonds and stocks. They function by allowing you to buy and store gold in an account. With a gold IRA, you can hold other physical metals like bars, coins or, bullions, and precious metal-related securities in the portfolio. Before investing in a gold IRA, it’s essential to learn more about it. Discussed below are five things to know about gold IRAs.

  1. Where to keep your gold IRA
  2. Eligible gold-IRA precious metals
  3. Types of gold IRAs
  4. Gold IRA fees
  5. Benefits of gold IRAs

1. Where to keep your gold IRA

If you’ve been wondering whether taking possession of physical gold in my Gold IRA is possible, the answer is no. You need a custodian, a third party who can guarantee your assets’ safety, to hold on to your gold IRA. You can use the IRS directory to find eligible custodians. Alternatively, you can partner with a gold investment company to create and fund your gold IRA. This company can help ensure the custodian you’re working with to purchase IRA-eligible gold is approved. Also, a gold investment company will provide storage options for your assets.

2. Eligible gold-IRA precious metals

Not all precious metals are eligible for gold IRA. Gold must meet the 99.5% fineness level required by the IRS.  Other precious metals, including palladium, platinum, and silver, must attain their own fineness levels to be gold-IRA eligible. In addition, eligible precious metals added to a gold IRA should have been made by an accredited manufacturer, refiner, assayer, or a national government mint.

3. Types of gold IRAs

There are various types of gold IRAs you can invest in, including:

● Traditional gold IRA: It’s a tax-deferred retirement account that works like a pre-tax traditional IRA with regard to tax treatment. An investor’s contributions and gains won’t be taxed, and often, contributions are tax-deductible too

● SEP gold IRA: This option is available to self-employed persons and business owners. This IRA operates the same way as a pre-tax traditional IRA, meaning your contributions aren’t taxed. However, the contribution limits offered are higher

● Roth gold IRA: It’s an after-tax retirement account that operates like other Roth IRAs. Although Roth gold IRA contributions don’t have any advance tax deductions, its primary benefit is that you won’t need to pay any taxes later when you start taking distributions in retirement

4. Gold IRA fees

Gold IRAs may need you to pay some fees as they involve extra services like insurance and storage. The costs cater to ongoing account maintenance and the physical gold’s secure storage. Some of the gold IRA fees you may pay include:

● Account setup fees

● Transaction/seller fees

● Custodian annual maintenance fees

● Wire transfer fees

● Storage fees

You may also have to pay something when cashing out precious metals.

5. Benefits of gold IRAs

Gold IRAs are considered an invaluable investment for multiple reasons, such as:

● Hedge against inflation: Gold prices usually rise when the dollar value drops, making it a great hedge against inflation

● Diversification: Gold is among the most conservative assets you can include in your investment portfolio to balance out the risk that comes with more volatile assets

● Tax benefits: Based on the gold IRA type you set up, you can leverage tax advantages when you make contributions or withdrawals. For instance, while Roth IRA contributions are taxed, the withdrawals aren’t

Endnote

Gold IRAs are a worthy retirement investment to consider. Learning more about Gold IRAs can help you make informed investing decisions.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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