Are Gold IRAs Safe Investments in 2024?

With the U.S. national debt spiraling out of control, real inflation close to 13% and the economy on the verge of a recession, many investors are looking for a way to protect their retirement savings.

And as history has shown, investing in precious metals with a self directed IRA can help you diversify your retirement portfolio and function as an inflation hedge.

But are gold IRAs safe? In short, yes. Since their inception in 1997 with the Tax Payer Relief Act, self directed gold IRAs have stood the test of time during economic upheavals including drops in the stock market and other investments.

IRS rules provide clarity on the types of gold and other precious metals you’re allowed to own in traditional and Roth IRAs as well their storage requirements. So you can have the peace of mind knowing that gold IRAs are a safe investment.

Are Gold IRAs Safe For My Retirement?

Gold and silver have been money for thousands of years. They have helped investors protect their assets since before Christ walked the earth. Below are the main reasons why gold IRAs are not only safe but should play an integral role in todays retirement portfolios.

A Gold IRA is a Safe Haven

Whether during a stock market crash, war, recession, depression or plain economic uncertainty, gold ownership has consistently been a safe haven for prudent investors. This makes a gold backed IRA perfect for capital preservation along with a potential rise in gold prices.

A Gold IRA is an Inflation Hedge

The more currency the government prints the higher the prices of everything go up, including gold. In 2023, inflation was at its’ highest point in decades because the government printed trillions of dollars in the last few years. Gold tends to perform well in inflationary environments. That’s why gold IRAs are known as an inflation hedge.

A Gold IRA has Tax Advantages

Per IRS rules, gold and other precious metals are considered collectibles. And therefore you may have to pay taxes of up to 28% on capital gains when you liquidate.

But if you purchase gold or other precious metals inside of a self directed IRA, when you sell your gold you don’t have to pay taxes, because gold IRAs are tax advantaged retirement accounts . You can buy, sell and trade physical precious metals within your retirement accounts without having to pay taxes.

You’ll only have to pay taxes when you take a distribution from your traditional IRA. Roth IRA distributions are tax free. These tax benefits are one of the main reason so many investors are establishing self directed gold IRAs.

Gold IRAs Offer Portfolio Diversification

Unlike traditional IRAs, the vast majority (95 – 97%) of retirement accounts are not self directed. Meaning that the assets classes they can invest in are very limited. Most traditional retirement accounts only allow you to invest in traditional investments, like the stock market, bonds, mutual funds and ETFs.

A self directed individual retirement account allows you to invest in alternative investments. Such as gold and silver coins, real estate and crypto currency along with traditional investments as well. This offers tremendous potential for retirement account diversification coupled with tax advantages.

A Self Directed Gold IRA Offers Complete Control

Whether you have a traditional IRA, Roth IRA, SEP IRA or a SIMPLE IRA, a self directed gold IRA allows you to be in complete control of your investment portfolio. You get to choose your preferred self directed IRA custodian, your precious metals dealer and IRS approved depository.

You precious metals IRA is not only permitted to hold alternative investments but traditional asset classes as well.

Why Your Physical Gold Investment is Safe

Per IRS guidelines, the physical precious metals permitted in your retirement account must meet the following purity requirements.

Precious Metals IRAs Stored at IRS Approved Depository

Per IRS rules, a gold individual retirement account must store its’ approved precious metals at a 3rd party depository. Your chosen self directed IRA custodian will have a relationship with at least one approved depository.

Each precious metal depository has sophisticated security features ensuring the safekeeping of your gold IRA assets. They are also insured per IRS requirements. 

Most approved depositories will offer two options to safely store precious metals.

Commingled Gold IRA Storage

Commingled storage means your precious metal will be stored in a section of the vault with other clients that hold gold. If you sell, trade or take an in-kind distribution from the account you’ll receive the same type of gold coins you bought but not the exact same ones.

When your selected IRS approved depository receives the approved precious metals for your IRA, they individually inspect each item to ensure it is in Brilliant Uncirculated (BU) condition. If a coin has any flaws it’s sent back to the precious metals dealer to be replaced.

Therefore you can rest assured that your gold purchases are safe while stored either commingled or segregated.

Segregated Gold IRA Storage

Segregated storage is frequently only available for gold coins and gold bars. Segregated means your physical gold will be stored independent of other clients holdings. Your gold coins or bars will be cataloged by your name and account number.

If you sell, trade or take an in-kind distribution from the account, you will receive the exact items you purchased initially.

The storage fees for segregated gold IRA storage are typically $50 more than for commingled.

Why Diversifying with a Gold IRA is Safe in 2024

2024 is gearing up to be a wild year according to Ray Dalio, founder of hedge fund Bridgewater and Associates. In fact, per Dalio the “USA collapse will be worse than you think”.

The US economy is teetering on the brink of a major correction or outright collapse. The US national debt has gone parabolic to the point that the government is printing money just to pay the interest on its’ debt. Inflation is at multi decade highs. And the stock market is close the highest point it’s ever been.

Couple that with the war in Ukraine, war in the Middle East and China eyeing Taiwan and you have a recipe for disaster.

Historically precious metals have performed well during times of high inflation, economic collapses and war. So gold IRAs just might be one of the safest ways to diversify your retirement savings in 2024.

How to Open a Gold IRA

There are 3 simple steps to open a gold IRA.

1. Select a self directed IRA custodian and depository:

To open a gold IRA, call the Certified Gold Exchange at 800-300-0715 and we’ll help you to complete a traditional or Roth IRA application. We can typically have your new account established within 48 hours.

Find a complete list of self directed IRA providers that allow you to invest in precious metals here.

2. Fund your precious metal IRA:

Once your account is set up you can transfer funds from another custodian or retirement account or make an annual contribution. Contribution limits for 2024 are $7,000 or $8,000 if you’re over 50. All IRAs have the same contribution limits but Roth IRAs have certain income requirements to be aware of.

3. Purchase gold or other approved precious metals:

Once you’ve funded your gold IRA you’re ready to make a purchase. Once you’ve agreed upon which precious metals you would like to acquire, your metals dealer will help you to complete an Investment Authorization form finalizing the purchase.

Once complete you precious metals dealer will ship your physical gold to your chosen depository for safekeeping.

*Note: Many precious metals dealers will attempt to convince you to buy overpriced “exclusive” or “premium” coins. Beware though, because they’re grossly overpriced and you can end up overpaying by over 30%. Call CGE at 800-300-0715 before making a purchase and we’ll make sure you’re getting a fair deal.

Visit our “10 Gold IRA Scams Dealers Use on You“ page for more information on how to stay out of hot water with unscrupulous precious metals dealers.

Potential Downsides of a Physical Gold IRA

Gold IRAs can be a great fit for investors looking to protect their assets as mentioned above. But there are some downsides to take into consideration as well.

You can’t take physical possession of your precious metals.

Per the IRS you are not able to store your physical gold yourself, such as at home or a safety deposit box. You must store precious metal IRAs at an approved 3rd party depository.

But an advantage of a gold IRA account is that you can take distributions in the form of physical metal unlike ordinary IRAs. This would be considered a taxable event just like a traditional distribution. If it’s a Roth gold IRA however, you can take distributions tax free because they’re funded with after tax dollars.

Executing transactions within a physical gold IRA takes longer.

Being that you hold physical gold outright, buying and selling takes a bit longer than with paper assets. For example, if you owned a gold ETF, gold mining companies or gold mutual funds, you could sell them with a click of a button because you don’t own anything tangible. But because you hold physical gold when you buy or sell, that metal needs to be moved from one location to another. At each point of the transaction it also requires being inspected. So transactions are not instantaneous like with the stock market.

A gold IRA requires you to pay set up fees for a self directed IRA.

Self directed IRA custodians do not make money by managing the investments you hold within your account. All of their income is based on service related fees. So you’ll have to pay account setup fees that you most likely wouldn’t have to with traditional IRAs.

A physical gold IRA requires that you pay storage fees.

Although they’re typically at a fixed rate of $100, you still have to pay to store and insure your precious metal IRA. If you were to buy a gold ETF for example, you wouldn’t hold gold outright, so you wouldn’t have to pay to store it.

A gold IRA does not pay dividends.

When you hold precious metals in your retirement account you won’t make any dividends or interest from them. Your precious metal must go up in value for you to realize a profit. Therefore a gold IRA may not be ideal if you’re looking to produce income. You may be better off with traditional IRAs that can invest in dividend producing stocks or interest earning bonds.

You can’t contribute gold you already own into a gold IRA.

If you already own some precious metals you are not allowed to deposit it into a gold IRA. You must acquire your physical gold inside your retirement account.

Biggest Risk To Opening A Gold IRA

If you select the wrong precious metals dealer you could be overcharged for your gold. Generally avoid Los Angeles gold IRA dealers and staying away from their tricky promotions is the safest bet. This may be difficult as they pay millions in affiliate fees annually. An affiliate is someone receiving compensation to say this company is the best. Be sure to read our gold IRA risks before investing your retirement saving.

Bottom Line, Gold IRAs are Definitely Safe

And depending on when you buy within a bull market, they can perform exceedingly well. Check out our Gold and Silver Price Forecast pages to see what the experts believe will happen in the coming future. And last but not least, call CGE now at 800-300-0715 to get all of your questions answered and see if gold IRA investing is right for you!

Written by Pat Collins and John Halloran