3 Types of Gold IRA Investments: Don’t Let Inflation Spoil Your Retirement Party

 

Introduction To Gold IRA Investments

With inflation rearing its ugly head, and economic uncertainty on the rise, retirement investors are looking to protect their future purchasing power with a gold IRA investment. There are three main ways you can invest in gold IRAs to diversify your retirement portfolio. Investors acquiring physical precious metals will need to set up a self-directed retirement account and choose an IRS approved depository. If owning physical gold is not important, you should consider the pros and cons of gold stocks, mutual funds or a gold ETF.

What Is A Physical Gold IRA Investment?

A physical gold IRA is when you have sole ownership of precious metals held in a self-directed IRA and stored at a 3rd party IRS approved depository. Although generally referred to as gold IRAs, other approved precious metals you can hold are physical silver, platinum, and palladium. In fact, if you ask your gold IRA company, they’ll tell you that more people are investing in silver IRAs than gold IRAs in recent years. You are allowed to hold 1/10, ¼, ½, and 1 ounce U.S. Treasury Department minted coins. Additionally, other bullion bars and rounds are considered approved precious metals if they meet stringent purity requirements. All items must be in Brilliant Uncirculated (B.U.) condition. U.S. Proof American Gold Eagle and Silver Eagle coins are allowed as long as they have the Certificate of Authenticity and are in flawless condition with the original U.S. mint packaging.

Once the gold IRA company delivers your investment, the depository will take up to 5 days to verify that your items are authentic and are in perfect B.U. condition. The depositories generally offer segregated and commingled storage. Most precious metal depositories are insured by Lloyds of London and must be qualified per (IRC-408n).

Physical precious metal retirement accounts typically have higher fees out of the gold investment options because the metal must be shipped, stored in an IRS-approved vault, and insured, unlike a digital asset.

You will need to pay the annual custodial fee and insured depository cost of under $200. There is also a buy/sell spread charged when purchasing the metals.

Selecting a reputable dealer is the most crucial step with physical gold investments inside traditional and Roth IRAs. The gold IRA industry is not regulated by the SEC and so many gold IRA companies use tricky promotions, fake affiliate reviews and will try to sell you obscure over-priced items.

While you can lose money with a gold or silver IRA depending on market conditions, gold often performs very well during economic uncertainty and physical precious metals have considered money for the last 2500 years.

Pros of Holding Gold In An IRA

• You Own 100% Of The Gold or Other Approved Precious Metals
• Can Take Delivery In National Emergency
• Physical Gold And Silver Bullion Rise with Spot Price
• Can Take In-Kind or Cash Distributions for your RMDs
• Never Been Worth Zero and Is Debt-Free

Cons of Holding Gold In An IRA

• Higher Fees When You Hold Gold And Silver Versus Digital Assets
• Transactions Take Longer to Process
• Overpriced California Gold IRA Companies Charge Massive Spreads

Popular Precious Metal Bullion Investments Approved for Gold IRAs

• U.S. and Royal Canadian Mint Gold Coins
• Gold Bars and Coins .999 or Better
• Platinum Coins and Bars
• Silver Bars .999 or Better
• Perth Mint Gold, Silver, Platinum Coins
• Silver American Eagle and Proof Coins
• Precious metals IRAs allow item only in Brilliant Uncirculated (BU) condition

American Eagles are one of the most popular forms of gold held inside a Traditional or Roth Gold IRAs. IRS rules also allow silver, platinum, and palladium bars and coins inside your self-directed IRA. But they must meet specific purity requirements and are in Brilliant Uncirculated (BU) condition.

If you would like to hold physical gold and other precious metals, your dealer can help you establish a gold IRA. Once you fund your gold IRA they can help you acquire the metal and arrange secure storage at an IRS approved depository.

If you already own precious metals within a Self-Directed individual retirement account, CGE can help you liquidate your investment. Since 1992, we have offered the best liquidation prices coupled with exceptional service.

Contact our gold IRA experts to set up a Traditional or Roth Gold IRA. Or even if you are acquiring precious metal for home delivery. Whether you want to invest in gold or are considering selling your holdings, call the most reputable gold IRA company in the U.S. at 800-300-0715.

Invest in Gold Mining Stocks with a Gold IRA Account

Some gold IRA investors choose to bet on the rising gold prices by purchasing individual precious metal stocks. While paper assets like equities do offer exposure to metal prices, they also come with additional risk compared to Traditional and Roth IRAs storing physical items.

Stock investing can be complex because there are 100s of variables along with supply and demand that affect values. Gold stocks are generally more volatile than other sectors. According to an Ernst & Young Global Limited 2020 mining report, the top ten opportunities and risks affecting the mining industry are:

1. License to Operate
2. High-Impact Risks
3. Productivity and Rising Cost
4. Decarbonization and the Green Agenda
5. Geopolitics
6. Capital Agenda
7. Workforce Issues
8. Volatility
9. Digital and Data
10. Innovation

The Top 10 Publicly Traded Precious Metals Mining Companies Based on Asset Value

1. Newmont Corporation
2. Agnico Eagle Mines Limited
3. Barrick Gold Corporation
4. Franco-Nevada Coporation
5. Wheaton Precious Metals Corp
6. Kinross Gold Corporation
7. Pan American Silver Corp
8. Royal Gold Inc
9. First Majestic Silver Corp
10. Hecla Mining Company

If you’re looking to add gold stocks to your retirement portfolio, it’s typically best to stick with the biggest, most well run firms that pay a dividend. The largest that can be found on the S&P 500 is Newmont Corporation. Most bank or brokerage firms that offer Traditional IRAs will have access to the above mentioned investments. Reach out to your broker or consult a financial advisor about the costs associated with acquiring the stocks.

Invest in Gold Mutual Funds

Gold funds are professionally managed and are another way to gain exposure to precious metals in retirement accounts. They are generally invested in mining stocks but occasionally hold physical gold, silver, platinum, or palladium. These funds can be an effective option for a retirement portfolio for those not comfortable storing physical metal at a 3rd party depository.

The Largest Precious Metals Funds by Asset Value:

1. First Eagle Gold Fund
2. Fidelity Select Gold Portfolio
3. Invesco Gold & Special Minerals Fund
4. Franklin Gold & Precious Metals Fund
5. American Century Global Gold Fund

While investors that buy these funds do experience diversification, they still only have a paper based asset.

Let’s look at some of the advantages and disadvantages of investing in mining stocks and mutual funds inside your retirement account.

Pros of Buying Precious Metals Stocks

• Lower Costs Associated Then Investing in a Physical Gold IRA
• Typically Available in a Traditional IRA Custodian Brokerage Account
• Trading Is Quicker Then With Shipping Timeline Of Physical Gold IRAs
• You May Be Exposed To Other Precious Metals Then Intended
• It Doesn’t Require a Specialized Custodian
• You Don’t Have to Store Your Gold
• They May Pay a Dividend
• You Can Invest a Small Portion of Your Retirement Savings
• Similar Tax Treatment to Traditional Gold IRAs
• You Will Avoid Gold IRA Scams From Los Angeles Companies

Cons Of Buying Precious Metals Stocks

• Your Gold IRA Account Owns No Real Physical Gold
• There Are Many Variables with Mining Stocks Like Geopolitical Issues
• The Gold and Silver Stocks You Own May Increase Debt By Issuing New Shares
• You Don’t Get Direct Dollar for Dollar Growth with the Gold Prices
• Lower Gold and Silver Prices Could Make Mining Unprofitable
• Withdrawals During Retirement Limited to Cash

Investing in gold mining stocks and gold mutual funds may be a great option if you don’t demand sole ownership of gold coins or bullion bars. To add mining stocks to your investment accounts, consult a financial advisor about your options.

Invest in Exchange Traded Funds (ETFs)

While we own gold stocks and physical precious metals inside a self-directed IRA, we are not keen on ETFs. The top five reasons that we shy away from gold ETFs are:

• You Don’t Own Any Physical Gold
• Counterparty Risk
• Supply of Metal in Gold ETFs Doesn’t Always Match The Demand
• Difficult to Understand Expense Ratios
• Some Gold ETFs Employ Leverage That Could Increase Risk

In a nutshell, ETFs are better short-term investment vehicles which offer increased liquidity because you can buy and sell them through a brokerage account.

Conclusion

With increasing levels of economic uncertainty, many investors are looking for ways to protect their retirement accounts. And with the recent spike, a precious metals IRA has helped countless investors do just that. Gold IRAs come in many different forms. Whether you have a Traditional IRA, a Roth IRA or a different type of qualified retirement account, a gold IRA allows you to invest in physical gold with the same tax advantages you currently enjoy. A traditional gold IRA is a self-directed retirement account available through an IRA trustee, also known as a self-directed IRA custodian. A precious metals dealer can typically help you establish a gold IRA. If you’re not attached to holding physical gold but would still like exposure to metals prices, you can opt for a traditional IRA with a bank or brokerage firm. Some investors prefer this option due to the costs involved with using a specialized custodian. Regardless of your chosen vehicle to make an investment in metals, rest assured that they’re all tax-advantaged accounts. Because gold IRAs follow the same rules as Traditional IRAs.

Do you need help setting up your gold IRA?

Contact the Certified Gold Exchange today at 800-300-0715. We guarantee a smooth transition from paper assets to your debt-free sole ownership gold or silver IRA.

CGE buys and sells exclusively in physical bullion coins and bars for delivery to a precious metals depository or your home. For more information on how to contribute to a gold IRA investment and set one up, call 1-800-300-0715.

Frequently Asked Questions

What Gold IRA options do self-employed individuals have?

Self-employed individuals can establish Traditional SEP IRAs. If set up with a self-directed IRA custodian these can function as SEP gold IRAs, very similar to Traditional IRAs. SEP gold IRAs have different annual contribution limits then Traditional IRAs. If you set up a SEP Roth IRA it can be funded with after-tax dollars. Traditional SEP IRAs funded with pretax dollars and are therefore tax-deferred accounts.

Who is a good precious metals IRA custodian for a new investor?

Strata Trust is a highly rated custodian that offer gold IRAs. Gold IRAs are available in Traditional, Roth and SEP formats. Strata has been a custodian since 2008.

How do I establish a Gold IRA?

Call the Certified Gold Exchange at 800-300-0715 and we’ll help you complete the required documentation.

What are the costs associated with a gold IRA?

Most custodians will charge an account set up fee of around $50 and then annual maintenance fees about $200. Due to managing physical metals they tend to charge slightly higher fees.

How do I contribute to a Gold IRA?

Annual contribution limits for your Gold IRA are the same as for Traditional IRAs. $7,500 if you’re under 50, or $8,600 if you’re 50 or older.

How to fund your Gold IRA?

You can fund your gold IRA by transferring assets from an existing Traditional IRA, Roth IRA, SEP IRA or other qualified retirement accounts.

What forms of gold coins are permitted in my Gold IRA?

Gold American Eagles, Gold Maple Leafs are the most common but gold coins or rounds must meet the minimum purity requirement of .999 to be allowed per IRS rules.

Do I have to store my IRA metals at a depository or can I keep them at home?

No, your gold must be stored in an IRS-approved depository. Personal storage of your metal in bank vaults is not permitted per IRS rules. If you don’t store your metal properly you can be hit with an immediate tax bill for a prohibited transaction.

Can I withdrawals during retirement?

Yes, and if you’re over 59½ you don’t have to pay a 10% penalty to do so.

Is a Gold IRA a good form of diversification?

Many investors are looking to diversify their investments because of the increase in economic uncertainty we’re currently facing. Historically precious metals have performed very well in similar situations.

Written by Gold IRA Experts Pat Collins and John Halloran