While technically the IRS may allow you to keep gold in your Roth IRA, the custodian must physically hold the gold. Alternative methods for investing in gold include exchange-traded funds (ETFs) that invest in gold futures or companies in the gold industry. It only takes three steps to create a Roth Gold IRA account. First, you'll need to speak with a representative to complete the necessary documentation.
Then, you'll transfer the funds to your account. Finally, once you receive your funds, you can purchase the metals you want and store them securely in IRA-approved vaults. In a gold IRA, you can keep real physical gold. It must comply with IRS standards and be held by the IRA trustee, not the owner of the IRA.
It must also be kept in an IRS-approved deposit. Many gold IRA companies have preferred custodians who recommend or require customers to use them, or you can search for a custodian on the RITA website. Buying gold in an individual retirement account (IRA) is promoted as a way for savers to diversify their investments. However, instead of holding paper assets, such as stocks and bonds, the IRA with gold is intended to hold physical ingots, that is, coins or ingots of gold and other approved precious metals, such as silver, platinum and palladium.
Or, if you have a conventional retirement savings account and want to increase your exposure to gold, read here how to buy a gold ETF, an exchange-traded fund that tracks the performance of gold. However, if history is any guide, gold will have to go a long way to match the returns of the economy in general, as measured by markets in general. You'll tell the IRA depositary to send money to the dealer to buy gold, silver, platinum, or palladium. If you're not sure if a gold or silver IRA is a good fit for you, consult a commission-only financial planner who is not affiliated with a gold IRA company to determine if this would be a good addition to your portfolio.
A key rule to know about keeping physical gold in an IRA is that precious metals MUST be kept in an approved custodial institution, such as Delaware Depository Service Company or Brink's Global Services, and not in your home or in a safe. You should also select a precious metals dealer who will make actual purchases of gold for your IRA (your custodian may be able to recommend one). They sell gold coins, bullion and the like, but they don't offer advice on investing in an IRA (despite what their websites or other marketing materials suggest). If you're wondering what “IRS-approved gold” is, keep in mind that there are minimum metal fineness requirements, along with specifications on type, size and weight.
An IRA that has nothing but precious metals is not diversified, by definition, because precious metals constitute a single asset class. In addition to the post-tax rule, Roth Gold IRAs come with a few other guidelines that you'll also need to follow. It's important to make sure you understand all the costs and expenses before buying physical gold to keep it in an IRA. Because the money has already been taxed, you can't deduct Roth IRA contributions on your tax returns as is the case with traditional IRAs.
Gold is generally considered a hedge against inflation and allows investors to diversify their portfolios.