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Is it possible to hold physical gold in an IRA? How?
What about other precious metals like platinum, palladium and silver? Can these be held in an IRA account as well. And how?
Learn it right below and use the jump links to get there faster.
- Gold IRA vs. Physical Gold
- Can You Hold Physical Gold in an IRA?
- How Do You Hold Physical Gold in an IRA?
- Which Types of Gold is Available to Hold in a Gold IRA Account?
- How to Take Physical Possession of Gold and Other Precious Metals from Your IRA Account?
Table of Contents
Gold IRA vs. Physical Gold
You can invest in physical gold in two ways. You can hold gold (and other precious metals) as part of your gold IRA account. Or you can invest in precious metals outside of your retirement account.
Here’s how the two options compare.
| Physical gold outside of an IRA | Gold IRA Account |
|---|---|
| No tax benefits | Comes with tax benefits |
| Any gold can be purchased for an investment | Gold must meet IRS standards |
| Gold can be liquidated at any time | Typically must wait until age 59½ to make penalty-free withdrawals |
| Home storage is an option | Gold must be stored in an approved depository |
| Suitable for short- and mid-term investments | Best for long-term investments |
Read my full gold IRA vs physical gold guide here.
Can You Hold Physical Gold in an IRA?
Yes, you can hold physical gold and other select precious metals in a gold IRA account.
You can’t buy real gold with a regular IRA and are instead limited to bonds, stocks, mutual funds, and similar investment asset types.
With a self-directed IRA such as a gold IRA you can hold alternative investments, including precious metals (gold, silver, platinum, and palladium).
Gold IRA account allows you to own physical gold and access all the benefits that come with it. You also get tax breaks as gold IRAs are IRS-approved retirement accounts.
Types of gold IRA account are:
Traditional account. A Self-Directed Individual Retirement Account (SDIRA) with gold provides immediate tax benefits through tax-deductible contributions and tax-deferred growth. Account holders can make penalty-free withdrawals upon reaching the age of 59½, though these withdrawals are taxed as regular income.
At age 73 or 75, (depending on birth year), account holders must take required minimum distributions (RMDs), with potential tax penalties up to 25% for non-compliance.
Roth account. A Roth gold IRA involves funding the account with after-tax dollars, without immediate tax deduction for contributions. The gold investment grows tax-free, and withdrawals after age 59½ are also tax-free, without required minimum distributions (RMDs).
SEP account. A SEP IRA is a unique retirement investment option for business owners and self-employed individuals, with the flexibility to be structured as either a traditional or Roth account.
SEP IRAs allow contributions of up to 25% of annual income, with a maximum limit of roughly $69,000. This is significantly higher than traditional IRA’s contribution limits.
How Do You Hold Physical Gold in an IRA?
To hold physical gold in an IRA you must set up and fund an account.
Here’s a closer look at each step in the process:
- Step #1- Open a self-directed IRA. You’ll need a special IRA account, known as a self-directed IRA, to hold physical gold bullion. Opening an account isn’t hard but you’ll need to go through a custodian, which is a specialized entity that manages self-directed accounts like gold IRAs.
- Step #2- Fund your account. Deposit your money into your gold IRA account. You can transfer money or contribute from your 401(k) or IRA.
- Step #3- Purchase your gold. You can’t place gold you already own into your new gold IRA account. Instead, you must buy IRA-approved gold using funds from your self-directed IRA.
- Step #4- Store your gold. You can’t store at home the gold you bought with your IRA account. The IRS views it as a distribution, subjecting the gold to taxes and a possible penalty. Instead, you must have your gold shipped from a dealer to a specialized gold IRA depository for secure storage.
Don’t worry if these steps sound difficult. Usually, you’ll get help from one of the top US gold investment firms when opening a gold IRA account. It makes the entire process safe, fast and secure.
Here’s an example of the entire process as done by Augusta Precious Metals, the best US-based gold IRA company.
Which Types of Gold are Available to Hold in a Gold IRA Account?
IRA-eligible gold is the only type of physical gold that can be included as part of a gold IRA account.
IRA-eligible gold (also called IRA-approved gold) is gold bullion that the IRS approved to be eligible to be included as part of the gold IRA accounts of Americans looking to diversify with precious metals.
The two common forms of IRA-approved gold are gold coins and gold bars and these must meet strict criteria to be eligible.
- Gold bars must be produced by an IRA-approved mint and be at least 99.5% pure. Small bars must meet exact weight specifications.
- Gold coins: must be 99.5% pure. They must come with a certificate of authenticity, be in mint condition and also be encapsulated in their original packaging.
Other IRA-approved precious metals are silver, platinum and palladium.
Read my IRA-eligible silver, IRA-eligible platinum and IRA-eligible palladium guides next, or use the table below for speed and efficiency.
| Precious Metals | Purity Standard |
|---|---|
| Gold | .995 purity or higher |
| Silver | .999 purity or higher |
| Platinum | .9995 purity or higher |
| Palladium | .9995 purity or higher |
How to Take Physical Possession of Gold and Other Precious Metals from Your IRA Account?
To take physical possession of gold and other precious metals from your IRA account you first must be at least 59½ old. Then you can start taking distributions without incurring any tax penalties.
You’ll be required to take the required minimum distributions (RMDs) once you reach age 73 or 75 (depending on your birth year). The amount of these distributions is based on the account’s value and your age. Failure to take them could result in a tax penalty of up to 25%.
However, upon reaching the eligible age for distributions, you can choose to receive the gold as a distribution, though it would still be taxed as income.
How to Hold Physical Gold in an IRA? And How to Take Physical Possession of Gold From an IRA Account (Conclusion)
The best way to hold authentic physical gold in an IRA is to open a self-directed IRA account with a reputable gold investment company.
These companies won’t cheat you (gold IRA scams are aplenty). They’ll sell you genuine gold bullion (you can visit the depository that’s storing your gold and request they show you the bullion and test to see if your gold is real or fake. In general everything will be taken care of on your behalf but with your assistance and supervision of course.
Finally, you’ll have to wait until you are old enough to take physical possession of gold bullion from your IRA account. This is so you avoid getting penalized and erasing your profit from the precious metals you own.
References:
- How to Hold Physical Gold in an IRA-Â https://lendedu.com/blog/physical-gold-ira/
- When You Can And Can’t Own Gold In An IRA- https://www.forbes.com/sites/bobcarlson/2020/09/21/when-you-can-and-cant-own-gold-in-an-ira/
- Can I store the physical gold myself, or do I need a custodian for my Gold IRA?- https://www.quora.com/Can-I-store-the-physical-gold-myself-or-do-I-need-a-custodian-for-my-Gold-IRA
- How to buy gold in an IRA- https://www.cbsnews.com/news/how-to-buy-gold-in-an-ira/
Nikola Roza
Nikola Roza is a blogger behind Nikola Roza- SEO for the Poor and Determined. He writes for bloggers who don't have huge marketing budget but still want to succeed. Nikola is passionate about precious metals IRAs and how to invest in gold and silver for a safer financial future. Learn about Nikola here.
