A gold IRA often comes with higher fees than a traditional IRA or Roth IRA, which invests exclusively in stocks, bonds, and mutual funds. Proponents of gold IRAs argue that these costs are worth the peace of mind of being protected from a potential financial apocalypse. But let’s assume that a disaster really does happen. How would you redeem your gold if it was in a deposit at the other end of the country?
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, a broker to buy gold, and an approved depository to store gold. Like other self-directed IRAs, gold IRAs can be traditional or Roth. The rules for withdrawals (selling gold for cash) depend on whether the Gold IRA is a traditional or a Roth IRA.
A gold IRA is a specialized, self-managed individual retirement account that is designed to store precious metals. Specialized custodian banks such as Fidelity, Schwab or TD Ameritrade do not manage physical gold in an IRA. This is less of a problem if a gold IRA was just part of its overall retirement portfolio as part of a diversification strategy in which gold provides inflation hedge. No other Gold IRA company goes to such great lengths to present investment information in an organized and objective way to earn the full trust of its clients.
If you really think it’s a good idea, at least check the IRS rules and custodian fees before you deposit gold into your IRA. The best way to use a gold IRA is to use it as an accumulation tool as part of a wider, more diversified investment strategy that can be achieved even without a gold IRA. Many of the custodians and brokers that open established IRAs that invest in traditional assets are unable to open and operate an SDIRA, including a gold IRA. The IRS has set guidelines for fineness standards for metals to determine whether gold or silver in the form of gold bars or coins is acceptable for a gold IRA.
However, unlike a traditional IRA, which typically holds paper assets such as stocks, bonds, funds, ETFs, and cash equivalents, a gold IRA is set up exclusively to own physical gold or other permitted metals.