Buying Gold in an IRA: Where to Start? | Learn

In an era where inflation soars and geopolitical tension rattles the world, the stability of the US dollar fluctuates under the pressure of escalating costs. These turbulent times have ignited a quest for financial safe havens, leading savvy investors to rediscover the timeless allure of gold.

As a symbol of enduring value, gold has emerged as a beacon of stability, capturing the attention of those eager to shield their wealth and possibly even enhance it amidst economic turmoil. The spotlight now turns to Tax-Advantaged Gold IRAs (Individual Retirement Accounts), an innovative strategy blending the security of gold with the foresight of retirement planning.

In this article, we'll explore gold IRAs, uncover their benefits, IRS regulations and compliance, common red flags to look out for and help you determine the best option for you.

Introduction to Gold and Precious Metal IRAs

Overview and Appeal

When you consider diversifying your retirement portfolio, buying gold in an IRA presents a compelling option. A gold IRA is a self-directed retirement account that allows for the inclusion of gold and other precious metals with tax benefits.

Why do investors like Gold?

Investors appreciate the value of gold and turn to this asset for several reasons:

Symbol of Stability: Historically, gold has been a symbol of stability, often maintaining or increasing its value even during market downturns and inflationary periods.
Hedge Against Inflation: Historically, gold is commonly viewed as a hedge against inflation, as its value tends to rise when the cost of living increases.
Portfolio Diversification: Investors often turn to gold for portfolio diversification, as its price movement typically differs from traditional assets like stocks and bonds.

Types of Gold and Precious Metal IRAs

Investors can choose from several types of gold IRAs, each catering to different financial strategies and tax implications.

Traditional IRAs involve investments made with pre-tax dollars, where taxes are deferred until withdrawal.
Roth IRAs are funded with post-tax dollars, offering the benefit of tax-free growth and withdrawals.
SEP IRAs are designed for self-employed individuals and small business owners, allowing for pre-tax contributions with taxes applied upon withdrawal during retirement.

You can learn more about the different types of IRAs here.

IRS Regulations and Compliance

Eligible Metals

When investing in gold and other precious metals through an IRA, it’s essential to understand and adhere to the IRS regulations. The IRS specifies the types of metals that can be included in a gold IRA. Eligible metals include gold, silver, platinum, and palladium, each meeting certain purity standards.

Storage and Handling Requirements

The IRS also mandates how these precious metals should be stored and handled. Gold and other precious metals in an IRA must be stored in an IRS-approved depository. This rule ensures the safekeeping and proper accounting of your investment. Storing these metals at home or in a non-approved facility could be considered a distribution and is not allowed. This can lead to significant tax penalties. The requirement for a custodian to oversee the storage and handling of these metals is a critical aspect of maintaining IRS compliance in your gold IRA.

Understanding these regulations is vital for anyone considering buying gold in an IRA. Ensuring compliance with IRS standards is crucial for the legitimacy and tax advantages of your precious metals retirement account.

Setting Up a Gold IRA

Choosing the Right Provider

If you want to set up a gold IRA, choosing the right company is crucial. Reliability, transparent fees, and experience in handling precious metal investments are key factors to consider. Unfortunately, several companies have lacked transparency, leading to legal challenges that have occurred in the past and continue to be an issue today.

Here's a link for reference.

Do your research and make sure you ask the gold IRA commissioned salesman the questions they don’t want you to ask.

What are the markups on the coins I’m being sold?
Do you make a commission?
How does your company make money?

Accessibility

There’s an old-school method of putting precious metals in an IRA and a newer method.

The old way of doing things limits your accessibility to buying and selling your assets when you want. You’re at the mercy of your broker facilitating the buying and selling of your assets which in most cases will net losses because of high unforeseen fees.

The new way of buying and selling gold is utilizing a digital platform that provides 24/7 access to your assets removing the middleman and reducing fees.

Funding Your IRA

Once you have chosen your provider, the next step is funding the IRA. This can be done through direct contributions, adhering to the annual IRA contribution limits, rollover funds from old employer retirement plans (like a 401(k)), or transferring funds from an existing IRA.

Costs and Fees Associated with Gold IRAs

When establishing a gold IRA account and buying gold, it's crucial to be vigilant about the diverse costs and fees imposed by different gold IRA brokers. These charges, often unnecessary, can significantly affect the overall return on your investments.

To help you navigate this, we've compiled a breakdown of typical expenses to watch out for.

Setup Fees: Some gold IRA companies charge a one-time setup fee. This fee varies but is essential for establishing your account.
Custodial Fees: Annual custodial fees are charged for the ongoing management and administrative services provided by the custodian. These fees are generally higher for gold IRAs than for regular IRAs, reflecting the specialized nature of handling physical assets.
Storage Fees: Physical gold stored in an IRS-approved depository incurs storage fees. These fees, typically charged annually, cover the costs of securing and insuring your precious metals.
Commissioned Salesman: When setting up your gold IRA, the representative assisting with the account setup may receive a portion of your portfolio as a commission.

Further Considerations

Gold IRAs offer a distinctive approach to diversifying retirement portfolios. These IRAs enable investors to leverage the enduring value of precious metals, coupled with the tax advantages inherent in an IRA structure. Careful consideration and thorough research are paramount when venturing into buying gold in an IRA. Each investor's financial goals and circumstances are unique, and thus, tailoring your investment strategy to fit your specific needs is important.

NOTE: It’s recommended to seek advice from a financial advisor. Their expertise can guide you through the complexities of gold investment and ensure that your decisions complement your overall retirement strategy.

If you want to buy gold in an IRA the new way, iTrustCapital empowers investors to do so. iTrustCapital is a leading software platform that allows people to buy and sell precious metals, such as gold and silver, inside of a tax-advantaged IRA.

iTrustCapital utilizes VaultChain™, investment-grade gold and silver held physically at the Royal Canadian Mint with ownership managed via a secure blockchain distributed ledger. iTrustCapital clients can buy and sell gold and silver 24/7. Clients place transactions through iTrustCapital's platform which executes through precious metals leader Kitco.

Why iTrustCapital and how is it different?

No marked-up coins: With no marked-up coins, you're only paying the spot price.
No commission salesman: iTrustCapital has no commission salesman, ensuring that your investments remain entirely yours, free from external sales influences.
Low fees: iTrustCapital fees are all in writing, with no yearly account fees or storage costs.

Click here to learn more about precious metals at iTrustCapital!

Want to add Gold to your portfolio?

Click here to learn more and open an account today!

DISCLAIMER

This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.

iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.

Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.

Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.

iTrustCapital makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) or omissions from the information contained herein. iTrustCapital disclaims any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this information, which is provided as is, without warranties.