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    • Gold IRA

    A gold IRA is a type of self-directed individual retirement account (IRA) that lets you own gold bullion. You cannot own physical gold in a regular IRA, although you can invest in a variety of assets with exposure to gold, like the stocks of gold mining companies or gold exchange-traded funds (ETFs).

    Opening a self-directed IRA lets you invest in alternative assets like real estate, physical precious metals and cryptocurrencies. Gold IRAs follow the same general rules as conventional IRAs when it comes to tax benefits (traditional or Roth), contribution limits and withdrawal rules. However, the IRS has implemented additional tax reporting and record keeping requirements for self-directed gold IRAs due to the more complicated assets they hold.

    Custodians Manage Your Gold Ira

    Large, conventional brokerage firms don’t offer gold IRAs. Instead, you need to work with a custodian that specializes in administering gold IRAs. Custodians help you manage the paperwork and tax reporting for your gold transactions to meet the IRS requirements for retirement planning.

    More importantly, they manage the unique storage needs involved with holding physical gold bullion. The IRS does not allow you to personally store precious metals owned via a gold IRA at home. If you take personal control of the physical gold from a self-directed IRA, the IRS counts it as a withdrawal—making you potentially subject to taxation and early withdrawal penalties—and in some cases the IRS is empowered to shut down your entire account.

    Gold IRA tax rules mandate that you store eligible precious metal with a national depository, a bank or a third-party trustee approved by the IRS. Your custodian can refer you to an approved facility and handle the gold transfer as part of setting up your gold IRA. 

    How To Buy Precious Metal For Your Gold IRA

    Once you’ve opened a self-directed gold IRA, you can transfer cash into the account to fund your purchase of physical gold. One option is to roll over an existing retirement account to your self-directed IRA. You won’t owe taxes on the move since the funds remain within a qualified retirement plan.

    You could also deposit cash each year, following the annual IRA contribution limits. With the money in your account, you can then buy gold for your gold IRA.

    What Forms Of Gold Can You Own In A Gold IRA?

    The IRS has strict rules regarding the type of physical gold you can own in a gold IRA. You can only purchase gold bars that are at least 99.5% in purity. You can also buy a number of gold coins, including the American Gold Eagle, the American Buffalo, the Canadian Maple Leaf and the Australian Gold Nugget/Kangaroo coins, for your gold IRA. Certain Collectable Coins and Collectibles Are Not Allowed in a Gold IRA

    The IRS does not allow popular gold coins like the South African Krugerrand or the United Kingdom Sovereign coins to be held in a gold IRA. In addition, you cannot invest in gold collectibles with an IRA. Make sure to review the permitted list of gold objects with your custodian before moving gold into your IRA.

    If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the value of the item and, if you are younger than 59 ½, an additional 10% early withdrawal penalty.

    You Don’t Need A Gold IRA To Invest In Gold

    Before opening a gold IRA, keep in mind that it’s not the only way to invest in gold with your retirement funds. There are simpler ways to save for retirement with assets exposed to gold beyond buying physical bullion itself.

    You can invest in gold stocks, like shares of gold mining companies or gold royalty companies, which help finance mines. When the price of gold goes up, these firms are more profitable so their share price should go up as well.

    You may also choose to buy a gold ETF or gold mutual funds. These funds buy up a basket of gold-related investments, like stocks in different gold mining companies. There are also funds that directly track the spot price of gold using futures trading strategies.

    These investments are available in a normal brokerage IRA, meaning you wouldn’t have to go through the work and the extra costs of setting up a self-directed gold IRA. If you must own the physical metal itself, then you will need a self-directed gold IRA.

    A gold IRA is a type of self-directed individual retirement account (IRA) that lets you own gold bullion. You cannot own physical gold in a regular IRA, although you can invest in a variety of assets with exposure to gold, like the stocks of gold mining companies or gold exchange-traded funds (ETFs).