The term gold IRA refers to a specialized individual retirement account (IRA) that allows investors to hold gold as a qualified retirement plan. Investors with gold IRAs can hold physical metals such as gold bars or coins as well as securities related to precious metals in their portfolio. Gold IRAs are individual retirement accounts that hold physical gold as an investment instead of traditional stocks and bonds. Many investors choose gold to diversify their portfolio, either by investing in a gold IRA or buying the metal outright.
Remember that not every self-governing IRA custodian bank offers the same investment options. So make sure that physical gold is among their offerings before you open an account. Gold IRAs have higher maintenance fees than other types of IRAs because of the additional costs associated with investing in gold. If gold seems like a solid choice for you, Sentell suggests investing no more than a third of your retirement savings in a gold IRA. For a gold IRA, you need a broker to buy the gold and a custodian to create and manage the account.
The ability to use gold and other materials as securities in an IRA was introduced by Congress in 1997, according to Edmund C. Gold IRAs are normally defined as alternative investments, meaning they are not traded on a public stock exchange and require specialized expertise to value them. As a result, gold IRAs require the use of a custodian bank, usually a bank or brokerage firm, to manage the account. Record gold sales combined with the appearance of many more companies processing and simplifying transactions have made investing in a gold IRA a one-stop shop.
You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able to recommend one for you). So if your portfolio consists of both gold and paper investments, a loss on the gold side is offset by the gain in other assets. Some IRA companies guarantee that they’ll buy back the gold from you at current wholesale prices, but you could still lose money if you close the account, which is not usually the case when opening and closing regular IRAs. Given that the stock market typically rises by around 7% in an average year, it would be rare for a gold IRA to outperform other retirement investments.
A gold IRA is a type of IRA that allows investors to own physical gold, silver, platinum, and palladium. Gold IRA companies vary in terms of experience, service, and costs. So take a look around and compare your options before you proceed with opening an account.
