What Is a Gold IRA?

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A gold IRA is one way to save for retirement. As its name suggests, instead of stocks or bonds, it holds gold in the form of bars, coins and bullion. It can also hold other precious metals like platinum and silver. Typically, people who have a gold IRA are looking to diversify their assets and hedge against inflation. But given that gold has no earnings while sitting in your custodian’s safe, there is little advantage in putting it in an IRA, whose main feature is tax deferral on earnings. Also, when you reach 70.5 or 72 (depending on when you were born), you’ll have to take a required minimum distribution (RMD) from the gold IRA, which will involve selling the gold if it’s your only IRA. It may make more sense to diversify your portfolio and hedge against inflation with other holdings. A financial advisor can help you strategize and implement a plan.

What Is a gold IRA?

With a traditional or Roth individual retirement account (IRA), you invest your savings in the form of stocks, bonds, mutual funds and other securities. With a gold IRA, which can be traditional or Roth, but must be self-directed, your account holds gold in the form of coins, bullion or bars. You can also own other precious metals like silver, platinum and palladium in your gold IRA. When it comes to IRA contributions, disbursements and taxes, gold IRAs follow the same rules and procedures as other IRAs.

Many gold IRA account holders also choose to invest in other gold-related investments called “paper assets.” These include stocks and exchange-traded funds (ETFs) in gold mining companies, precious metals commodity futures or precious metals mutual funds. Note that this is rare, though, as most gold IRAs strictly consist of physical metal investments.