Shining a Light on Gold: A Step-by-Step Guide to Investing in Gold Through an IRA
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Benefits of Investing in a Gold Individual Retirement Account (IRA)
Buying precious metals in a gold individual retirement account (IRA) can help savers diversify their investments and take advantage of the stability and safe-haven status of gold, silver, platinum, and palladium. This lesser-known type of IRA — also known as a self-directed IRA (SDIRA) — provides people who are knowledgeable about precious metals investing with a means of adding alternative assets to a retirement account.
Investing in Gold for the Long-Term
In the last 20 years, gold has rewarded long-term investors with strong returns. More recently, the yellow metal has reached all-time highs, increasing the popularity and demand for these types of accounts. Gold is often included in investment portfolios because it’s considered a hedge against inflation and can rise in value during periods of economic uncertainty, stock market volatility, and interest rate cuts.
Alternatives to Buying Physical Gold
A gold IRA, which can also hold the aforementioned precious metals silver, platinum, and palladium, is one way to invest in precious metals while maintaining the tax benefits of a conventional IRA. These types of SDIRAs can hold precious metals, real estate, and cryptocurrency — assets that are not included in conventional IRAs. However, be mindful that gold IRAs often carry high fees.
Understanding the Drawbacks of Gold IRAs
Purchasing physical gold to hold in a retirement account can have some drawbacks compared to investing in equities like stocks, ETFs, or mutual funds, so it’s essential to understand all of the associated costs before investing in a gold IRA.
Other Ways to Own Gold Exposed in a Retirement Account
A key selling point of these investment products is that you own the physical gold itself. If this doesn’t matter to you, there are other ways to add exposure to precious metals in a retirement account, such as buying stock in gold mining companies or shares of the best gold ETFs.
Investing in a Gold IRA: What You Should Know
Even with a long time horizon, gold investors have no guarantee of making money on their investments in gold IRAs — especially if you plan to rely on a gold IRA company’s buyback program to sell your gold if and when you take distributions (SDIRAs can be either traditional or Roth, with traditional accounts carrying required minimum distributions, or RMDs, after age 73).
Steps to Buying Gold in an IRA
Step 1: Open a Self-Directed Gold IRA
Many major companies offering retirement accounts do not have an option for investing in physical gold through an SDIRA. There are some exceptions, like Fidelity, which has gold IRA investing, but gold IRA investors typically need to open accounts with a company focused on providing this financial product.
By opening this type of SDIRA with a custodian that handles physical precious metals, you’ll be able to invest in gold and other precious metal bullion products in the form of bars, ingots, coins, and rounds. It is crucial to do your research when choosing which company to use. (You can read about what to look for when selecting a gold IRA company in our guide to the best gold IRA companies.)
To avoid running afoul of tax regulations, gold IRAs need to have an IRS-approved custodian. This trustee/custodian must be a bank or IRS-approved nonbank trustee/custodian, and eligible bullion must be in the physical possession of a bank or IRS-approved nonbank trustee.
- The custodian is a financial firm tasked with executing investment activities and administrative duties that are necessary to keep your account in good standing with the IRS, which is crucial to keep its tax-deferred status.
- The depository is the secure third-party storage facility for your precious metal products. Storage is provided in either pooled or segregated safekeeping, and the depository must also be in good standing with the IRS in order to maintain tax-deferred status.
Many gold IRA companies have preferred custodians and depositories they either recommend or require customers to use. Alternatively, you can search for a custodian through the Retirement Industry Trust Association website.
Step 2: Fund Your Gold IRA
There are numerous ways you can fund your gold IRA. You can elect to use one or more of the following:
Many people fund their new account using money held in an existing retirement account. IRS rules permit funding a gold IRA with money drawn from another IRA, 401(k), or other qualified retirement account.
Rules, Regulations, and Restrictions for Buying Gold in an IRA
Must Invest in IRS-Approved Metals
You can hold coins or bullion in a precious metals IRA. Despite the colloquial term “gold IRA,” you can also hold silver, platinum, and palladium in this account.
If you’re wondering what “IRA-approved” gold is, be aware that there are minimum requirements for metal fineness, purity, and specifications about the type, size, and weight. Regarding IRS-approved purity:
- Gold must be 99.5% pure (certain coins — including specified U.S.-mint coins like Gold Eagles — are exceptions and can be IRA-eligible even below 99.5% purity).
- Silver must be 99.9% pure.
- Platinum and palladium each must be 99.95% pure.
According to STRATA Trust Company, one of the major gold IRA custodians, in order to be held in a gold IRA, precious metals must be certified or accredited by a national government mint or one of the following precious metals authorities: NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, or ISO 9000.
Two of the most commonly used types of IRA-approved gold are American Eagle proof coins and bullion, and Canadian Maple Leaf coins.
Age and Retirement Limitations
Self-directed individual retirement accounts, including gold IRAs, have the same contribution limits and age-based distribution limits as conventional IRAs. For 2026, the IRA contribution limit is $7,500 ($8,600 if age 50 or older).
Taxes
If you withdraw gold from your IRA before you reach the age of 59.5, you will be assessed income tax on the value of that gold as well as a 10% penalty for taking an early withdrawal from a retirement account.
Gold IRA Withdrawal
If you opt for a traditional gold IRA, like a traditional IRA, you will have to begin taking RMDs at the age of 73. To avoid this, you can find a gold IRA company that offers a Roth gold IRA, which has the same tax treatment as a conventional Roth IRA, wherein investors use after-tax dollars for purchases, aren’t required to take RMDs, and aren’t taxed on gains or qualified distributions.
If you’re looking to access the value of the holdings in a traditional gold IRA, you will be required to take distributions from your gold IRA in one of two ways:
- An “in-kind” distribution means you have your gold shipped to you. Note that you will have to pay for shipping and insurance. A key distinction of an “in-kind” distribution is that you are not forced to sell or exit the position and in doing so, you can decide what to do with it and how and when to sell it.
- The other option is liquidating your gold and having the gold IRA company send you the funds. While most IRA companies will buy back gold and other precious metals, be aware that the price at which they purchase gold is lower than the price at which they sell gold due to the aforementioned spread.
Gold in an IRA FAQs
What is a Gold IRA Account?
A gold IRA is a type of self-directed individual retirement account. Along with gold, many people also hold silver, platinum, and palladium in gold IRAs. Self-directed accounts often have higher fees than other types of retirement savings accounts because of the additional layers of oversight and administrative work necessary. These fees can erode your returns, so have a good understanding of how much it will cost before opening a precious metals IRA.
How to Own Gold in an IRA?
Gold IRA companies, which are essentially precious metals dealers, will facilitate the creation of a self-directed IRA in which you can legally hold gold and other precious metals. Gold IRA companies can steer you toward IRS-approved account custodians and depositories where your gold will be physically stored. Your gold must be stored in one of these depositories — not at your home or in a safe deposit box.
If you don’t want to hold physical metals, there are other ways to get gold in your investment portfolio, including gold ETFs or the stocks of gold mining companies.
What is IRA-Eligible Gold?
Since most gold coins are minted specifically to be collectibles, there are very precise regulatory requirements that define which precious metal items are suitable for investing. You can see more of the IRS’s detailed requirements on size, weight, and metal purity that govern which kinds of coins and bullion can be held in a gold IRA. The aim of these precise requirements is to ensure that people are keeping investment-grade assets in their accounts, rather than collectibles.
Bottom Line to Gold in an IRA
A gold IRA is an alternative investment option for retirement savers who want to own gold as a hedge against inflation or to diversify their assets beyond the stock market. You may want to learn how to buy gold in an IRA if you want to own physical gold rather than shares of equities — e.g., stocks, mutual funds, or ETFs leveraged to gold. However, gold IRA investing can involve high fees and other risks,
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