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 depot across 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 bank, a broker to buy gold, and an approved custodian to store gold. Like other self-directed IRAs, gold IRAs can be traditional or Roth. Patriot Gold Group has a long track record of helping investors secure their financial future through gold IRAs, and has received high marks from consumer groups.
While most IRA investors invest in more traditional assets such as stocks, bonds, and funds, tax legislation allows investments in precious metals such as gold and silver via specialized IRA accounts. Younger investors who have less money to invest in gold could be better off with a traditional IRA and invest in gold equivalents such as gold ETFs or gold mining stocks until they’ve accumulated enough to meet the higher minimum requirements of gold IRAs. Next Avenue asked the agency about these ads and received the information: “The IRS can’t comment on the claims made by a particular IRA organizer, but the agency is warning taxpayers to be careful if someone claims that gold stored in your IRA can be kept at home or in a safe deposit box. If you suddenly need gold to exchange groceries for groceries, you’d first need to call your custodian bank and fill out the necessary paperwork to get access to your own gold.
The tax legislation also states that the gold or silver must be held by an IRS-approved custodian or trustee, although some Gold IRA marketers claim that there is a loophole in this law (more on that later). Those who prefer to invest in stocks of gold companies (such as Barrick Gold), in investment funds of such companies (such as Fidelity Select Gold Portfolio), or in ETFs that track the performance of a gold index (such as SPDR Gold Shares), can do so with a mainstream IRA. 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. Many of the custodian banks and brokers that open mainstream IRAs and invest in traditional assets are unable to open and operate an SDIRA, including a Gold IRA.
The advantage of gold ETFs is that you can buy and sell stocks like a stock and hold them in a conventional IRA or 401 (k). No special account is required. Like a traditional IRA, a Gold IRA allows pre-tax contributions, and investment income can then accumulate in deferred tax terms. Investors who hold their gold for more than a year are subject to favorable capital gains tax rates instead of the normal income tax rates you pay when you sell gold and withdraw the money from an IRA. Popular Gold IRA companies include Orion Metal Exchange, Birch Gold Group, Red Rock Secured, Gold Alliance, Oxford Gold Group, and Goldco, among others.
