Gold IRA Investing Guide 2024
What is a Gold IRA?
A Gold IRA is a tax free retirement account in which you can hold certain types of precious metals which are approved by the IRS as acceptable retirement investments.
- US citizens have been allowed to hold real, physical bullion in an Individual Retirement Account (IRA) known as a Gold IRA since the Tax Payer Relief Act of 1997. Bullion is a collective term for precious metals bars and coins.
- Such bullion must be at least 99.5% pure and up to the age of 59½ it must be insured and held in your name at an approved depository. From that age and upwards you can take physical possession of your metals penalty free.
- A Gold IRA is also often also referred to as a Precious Metals IRA. ‘Gold IRA’ is the most common term to describe this type of account however even though Gold IRAs can include other precious metals too, namely silver, platinum and palladium.
- A Gold IRA is Self Directed. When you have a Self Directed IRA you are in control of what to include, allowing you countless investment opportunities.
- This gives you the flexibility to Include traditional investment accounts such as stocks, shares and bonds as well as alternative investment accounts such as physical precious metals, real estate and cryptocurrencies in a Gold IRA. Obviously, all accounts must be IRS approved.
- The different types of investment accounts to be included and the percentage mix of these within your Gold IRA are flexible and up to you.
- Creating a gold IRA requires that you transfer some or all of your existing retirement plan into a precious metal IRA.
- You can hold more than one IRA if you so choose. This is perfectly acceptable to the IRS.
Why are Gold IRAs Becoming More Popular?
When I first started researching the concept of gold IRAs many years ago it was quite rare to speak to anyone who actually new what a gold IRA was. That has all changed now as their popularity has increased drastically.
- Anyone determined to do more than merely scrape by after they stop working will need to consider solid and profitable investment options available well in advance of their retirement. Many investors have found that a Gold IRA is an excellent option.
- Once a person stops working the idea of surviving without employment income can become quite daunting.
- Individuals are often concerned about their retirement, and quite rightly so nowadays when more and more companies are reducing the retirement benefits paid to their employees. This is forcing individuals to take it into their own hands to secure their retirement.
Learning about Gold IRAs and researching Gold IRA Companies is therefore becoming increasingly common.
Why Choose Precious Metals To Protect Your Retirement?
I have learnt during many years of working with precious metals that including them in your portfolio helps to balance your investment mix.
- During times of uncertainty and poor market conditions precious metals have been proven historically to outperform the more traditional market because when the more common types of investments such as stocks and bonds go down, precious metals normally go in the opposite direction.
- That’s why including precious metals as a percentage of your investment portfolio is commonly referred to as a ‘hedge’.
- By including precious metals in their portfolios investors create a hedge against a hazy future. This gives them peace of mind in retirement without having to constantly worry about the state of the economy.
- A gold IRA can help investors spend more time enjoying retirement, rather than forcing them to be constantly monitoring the markets and the economy.
Why Should Investors Choose Gold?
- Gold is always in high demand with a high value. It is used in electronics, jewelry, pipes, and countless other products. Unsurprisingly, precious metals are highly sought after at all times, especially in emerging economies such as China and India. All the time these economic trends continue, demand for gold will continue to rise.
Protection Against Inflation
- Gold and other precious metals are tangible like paper currencies. Unlike paper currencies though, the overall gold supply is limited. This means that gold protects investors from rising inflation and devalued currencies. It has been proven historically that gold savings can improve a person’s purchasing power over the long term, irrespective of the status of currencies.
Value Isn’t Tied To The Economy
- There will always be periods of time when the economy takes a downwards trend. When the economy struggles, the value of gold can still increase. Gold is secure and over time has always risen in price.
- After purchasing gold, an individual taking a long term view can be virtually assured that their investment is going to grow or hold value. An investor can choose business or real estate investments, but properties can lose value, and businesses can go bankrupt. Investors are often tempted to pick risky investments in order to make quick gains. Such investments can fail whereas gold, which won’t always produce instant gains, tends to increase in value over the long term.
A Crisis Commodity
- In times of financial instability and economic uncertainty gold tends to retain its value. Low confidence in governments around the world often leads to gold being the investment of choice. Investors prefer safer options during tense situations in the world, and gold is considered the standard here.
Liquidity: Easy To Acquire and Sell
- Since there are various types of gold investment it is easy to acquire. Options available are , , and (physical) gold bullion.
- The gold market is always liquid, no matter the avenue of investment. Therefore, investors can easily buy and sell their gold inventories without too much difficulty. When they need extra cash, their quickest solution is often to liquidate their gold holdings.
The Reasons Why Top Analysts Are Bullish About The Prospects for Gold in 2024
What About Silver?
Many of the Gold IRA Companies that I have spoken to have told me that although the majority of their inquiries come from investors initially interested in acquiring gold, many of those investors end up including silver as well as gold in their new Gold IRAs after being introduced to the benefits of silver.
I have written the following articles about silver to give you an understanding of why you should look further than just gold if you are considering investing in precious metals:
What Are The Benefits of a Gold IRA?
Gold IRA accounts come with distinct benefits:
Includes Tangible Gold
- By investing in a Gold IRA, investors own actual amounts of tangible gold. Other accounts can include stocks and mutual funds, but those feature no intrinsic value. Gold has a tangible value in every society, though.
- In most cases, bullion’s cost reflects the spot price for precious metals. This is not always the case with gold investments such as gold stocks and gold ETFs as there are many other factors to take into account with those. Even though you can hold gold stocks and gold ETFs in a Gold IRA I would always recommend that you opt for physical gold, as that way you are linking your investment directly to the spot price of gold.
- Gold prices have been proven to steadily increase over time, so it’s a good option for retirement investing.
- Arguably the main advantage associated with a Gold IRA is the tax benefits that it gives you. Although an individual needs to pay income tax on gold being changed into cash, taxes are lower when these transactions are tied to IRAs.
- Gold is a capital asset, meaning it comes with lower tax rates. Likewise, penalties for early withdrawal are negated under certain situations, including emergency medical expenses, home purchases, and other situations.
The IRA Rollover Process
Rolling some or all of a 401k to a gold IRA can be a simple and straightforward process.
- If a 401k is funded and held by an employer, employees can request a distribution from that account to one backed by precious metals.
- Individuals who have left their company already simply need to work with a custodian to handle the rollover process.
Gold IRA Fees
Investors need to be aware of the fee schedule for these types of accounts.
- They can expect a one-time seller’s fee that varies based upon the Gold IRA Company chosen. This is known as a Set Up Fee and is charged when an account is created.
- Since the government requires custodians for traditional gold IRAs, custodian fees often come for protective services. These are commonly referred to as Admin Fees which are charged annually.
- Custodians will arrange storage of your metals at an approved depository. Storage Fees are also charged annually.
Some Gold IRA Companies will waive the first year’s Admin and Storage Fees.
For Admin and Storage Fees some Gold IRA Companies charge flat rates and some charge scaled rates. Scaled rates are a percentage of the fund value. If you are unfamiliar with this concept, I recommend that you read my explanation by clicking on the following link:
Storage of Your Gold IRA Metals
- For Gold IRA purchases, IRS approved storage facilities are a requirement, not a recommendation until you reach the age of 59½.
There are different types of storage options available, and it is very important that you understand the difference between all of these. I have explained this in further detail elsewhere, which you can access by clicking on this link:
Why Work With a Gold IRA Company Instead of a Custodian?
Rolling over a 401k to an optimum gold IRA helps investors take command of their retirement. If you work with an experienced and reliable Gold IRA Company the process should be quick and painless.
- Think of a Gold IRA Company as a one stop shop which can set up your Gold IRA for you and take care of all the paperwork, liaise with a tried and trusted custodian on your behalf and assist you with the purchase of your metals.
- The best Gold IRA Companies have dedicated departments and/or staff who are experienced in each step of the process and also who are experts in retirement planning and IRS requirements.
- All Gold IRA Companies have well established working relationships with either a single preferred custodian or a small number of preferred custodians who specialize in IRAs. They will liaise with one of these on your behalf during the IRA rollover process. That doesn’t preclude you from choosing your own custodian, however.
In summary, a custodian can assist you with parts of the Gold IRA process whereas a top Gold IRA Company like the one I recommend will oversee the entire process for you from A to Z, holding your hand every step of the way.
If you require further clarification of the different roles of Gold IRA Companies and Custodians, you can check out my article Gold IRA Companies vs Gold IRA Custodians.
Why The Choice of Gold IRA Company is So Important
- Working with the right Gold IRA Company is essential for getting the most from your IRA rollover.
- Of course, not every gold company is the same, and it is essential that you choose the company that you want to work with carefully.
- As with other types of investments, how an investor manages their gold IRA dictates how their investments perform and grow.
Carefully researching then choosing an experienced, trustworthy and reliable Gold IRA Company is essential. In choosing the right service, investors have a much better chance of maximizing their profits and minimizing potential headaches associated with investing for and during retirement.
What To Look For When Researching Gold IRA Companies
I have researched and evaluated a large number of gold IRA companies during my many years of experience in the precious metals and gold IRA fields. I have created this checklist to assist you with your due diligence.
Reputation and Experience
- A company’s record speaks far more about itself than its promises. In that vein, investors need to make sure that each company features a verifiable history, real testimonials, and a reputation for fairness.
- Flat fees are almost always preferable compared to complicated plans with hidden costs. You need to be aware of every applicable fee at all times. Also, it’s important to realize that companies that try to hide one fee often try to hide many others. Hidden fees can destroy a chunk of investors’ retirement savings, so these details matter.
- The top gold IRA companies offer flexible and balanced plans or services to meet investors’ needs. For most people, countless questions come to mind. A company that considers each person’s needs, no matter their investment amounts, is always recommended.
Ratings From Reliable Sources
- A simple way to assess a company’s reputation or history involves researching consumer watchdog organizations, such as the , , and .
Such organizations maintain and help remedy consumer complaints against businesses. Therefore, investors can figure out how many complaints a given company has received, and how the company has dealt with them.
- As I mentioned earlier, self-directed Gold IRAs must be controlled by an approved custodian. A Gold IRA Company’s custodial agreements and arrangements are vital. The wrong factors could reduce your gold-buying power. With that in mind, research the following:
- Do storage fees get calculated on scaled or flat rates?
- How fast are orders processed?
- Are commingled and allocated gold storage solutions available with easy transfers between accounts?
- How are transfers currently handled?
- What security and monitoring practices are in place?
- Can investors easily communicate with the custodian?
- Superior customer service is the norm at the best Gold IRA Companies today. Such companies make the effort to explain their IRA plans in detail and help their investors roll over each 401(k) or IRA account.
During your research you should make sure to check how responsive a company’s client-services team are and how friendly, knowledgeable and experienced the staff is.
My 3 Best Gold IRA Companies
|Gold IRA Company
|Find Out More
|Augusta Precious Metals
|ZERO BBB and BCA Complaints Ever
|Website Read My Review
|High Percentage of Satisfied Customers
|Website Read My Review
|American Hartford Gold
|Best Gold IRA Newcomer
|Website Read My Review
- Gold IRAs are becoming increasingly popular these days because they allow investors to use physical precious metals to hedge and protect their retirement funds against economic uncertainty and financial downturns. For that reason many people are now choosing to include gold and silver as a percentage of their retirement investment portfolio.
- Once you’ve made the decision to open a Gold IRA you then have to choose a Gold IRA Company to set things up on your behalf. There are many such companies out there and it’s important that you do your research into them thoroughly.
- Selecting a well established, reputable, reliable and trustworthy Gold IRA Company to set up your gold IRA reduces the risks associated with large administrative fees, pushy salesmen, custodial issues, and poor service from companies that don’t stand behind their plans, services, or products.
- The risks associated with market collapses, devalued currencies, and inflation can be reduced with a Gold IRA.
About the Author: Doug Young Doug is a highly experienced professional and widely trusted authority in financial investing, commodity trading, and precious metals. With over 20 years of expertise, he helps others make informed decisions by sharing a combination of personal experience, extensive knowledge and meticulously researched information on gold IRAs, precious metals investing and retirement planning. He regularly writes news items on these topics. He has considerable experience of evaluating Gold IRA and Precious Metals Companies, gained over a period spanning more than a decade.
See full bio