Are Gold Backed IRAs a Good Idea?

Are Gold Backed IRAs a Good Idea?

Deciding whether or not to rollover an existing IRA into a gold backed IRA is no small decision and requires weighing specific individual goals.

A gold IRA is a good retirement investment decision based on the following criteria:

  • Your individual gold investing goals vs. your short and long-term needs
  • Weighing the tax advantages vs. fees associated with a gold IRA
  • How much you are willing to allocate,

What is a gold or precious metals IRA?

A gold IRA is a self-directed individual retirement account that invests in actual tangible, physical assets such as gold and other precious metals. Gold or precious metals IRAs serve as a layer of protection from inflation, stock market volatility, and economic instability

These gold-backed Individual Retirement Accounts offer more flexibility and control to the investor than a traditional IRA that invests solely in mutual funds, stocks, bonds, and other paper assets that are more prone to manipulation and panic induced market fluctuations.

1. Your individual gold investing goals vs. your short and long-term needs

The right gold IRA for the right goal

If your investment strategy is portfolio diversification, risk and loss mitigation, and overall preparation, a traditional gold IRA would be appropriate. This strategy involves holding gold or precious metals as a hedge against losses elsewhere, whether depreciation within the stocks, bonds, or paper assets holdings or overall inflation. This is a long-term strategy.

A traditional gold IRA would NOT be suitable for:

  • A ‘shiny object’ driven, short term investor looking to move in and out of metals or for quick returns.
  • Day-to-day expenses that are paid with distributions. If this is your goal, a Roth Gold IRA would be a better option than a traditional gold IRA.
  • People who only want to store their IRA-invested metals at home. Home storage of IRA precious metals assets is not permitted due to IRS standards and regulations. However, gold IRA companies such as Birch Gold Group, Noble Gold Investments, and American Hartford provide investment products specifically for that purpose. See our list of gold IRA company reviews to learn more. Read here.

2. Weighing the tax advantages vs. fees associated with a gold IRA

To start, if you are considering investing in gold and precious metals, you are already gaining a tremendous tax advantage, protection of your wealth from the relentless invisible tax called inflation.  This is an instant win right out of the gate.

As you can see from the 50-year gold value chart above, the consistent, upward trend and appreciation of gold over time. If you simply flipped this chart on it's head, what you would essentially see illustrated is the downward trend and depreciation of the dollar over time.

With any investment vehicle, there are tax advantages and tradeoffs. It is completely dependent on one’s goals, short and long-term goals.

A gold IRA often comes with additional fees when compared to a traditional or Roth IRA that invests solely in stocks, bonds, and mutual funds. Because you are storing and securing actual tangible, physical assets, there are custodian and storage fees associated with a gold IRA. Once again, IRS regulations strictly prohibit precious metals invested within a gold IRA to be stored at home, but within a secured and approved depository.

Tap the banner below to visit Birch Gold Group to receive their gold IRA guide.

Gold IRA Tax Advantages:

For rollovers into a traditional gold IRA, this account functions as a tax-deferred retirement savings account and works like pre-tax traditional IRAs. Your contributions and any gains will not be taxed and, in most cases, contributions are tax-deductible as well.

With IRA rollovers, the existing IRA custodian will give the account holder the money they wish to withdraw. The account holder then has 60 days to deposit the funds into your new gold IRA account. If this deadline is not met, there is a  10% penalty on the withdrawal if you're under 59 1/2 years of age.

As we discussed previously, your individual investment goals greatly determine which IRA is appropriate. A basic summary of the two options we discussed earlier explains the variance in terms of the tax structure.

Traditional Gold IRA

Traditional gold IRAs are tax-deferred, so any gains or contributions aren’t going to be taxed. Bear in mind, this IRA has an annual limit. For people under 50 the limit is $7,000. People over 50, can invest an additional $1,000. As discussed before, all taxes must be paid once distributions begin. Hence, this type of gold IRA is better suited for long-term holding.

Roth Gold IRA

In contrast, Roth gold IRAs do not provide tax reductions upfront as with a rollover to a traditional gold IRA, but with Roth gold IRAs, no taxes are due once distributions begin during your retirement. Therefore, this is more suitable to for short-term holding.

3. How much are you willing to allocate?

What percentage of your portfolio should you hold in gold will depend greatly on your present net worth, portfolio size, and present earnings. Standard diversification is in the range of 5-10%, a high inflation allocation approach would be 10-20%, and record inflation hedging is 20% and as high as 25%.

As in many cases with nearly every gold IRA rollover, the greater the minimum initial investment, the greater the access to better pricing, such as Augusta Precious Metals. If you have 100k of retirement savings, get started by clicking the button below to attend Augusta's free educational conference to gain the information you need to diversify and protect your retirement.

Knowing how to choose an IRA custodian will depend on your specific individual investment needs.

If you have 100k in savings to protect, attend a gold investment educational webinar hosted by Augusta Precious Metals.  Tap the button below:

U.S. Bureau of Labor Statistics 12-month CPI Inflation Report Data


Who holds the gold in a gold IRA?

Gold, and other such precious metals are to be stored and insured in an IRS-approved facility. Typically, a third-party company partnered with the Gold IRA company manages the IRS-approved depository

Before selecting a Gold IRA company, review the information about the storage facility options provided.

What is the minimum investment for a gold IRA?

Minimum investments will vary dependent on the gold IRA company you choose. It is incumbent that you take the requisite time to research the various providers for your specific precious metal investment strategy.

We have provided a list of reviews here of the top precious metal ira companies with a range of minimum investment amounts.


What are the fees for a gold IRA?

Minimum fees will also vary dependent on the gold IRA company you choose. Setup fees, annual fees, storage fees, and custodian fees are all subject to the discretion of the gold IRA company you choose.

Please see the list here of the best precious metals investment companies for buying gold in order to review the fees that apply.

What Precious Metals Are IRA approved?

Precious Metal IRAs can invest in IRS-eligible gold, silver, palladium, and platinum bullion and coins. The IRS maintains very specific regulations and requirements about the design, size, weight, and metal purity that determine which gold bars and coins can be held in a gold IRA or precious metals IRA.

Investment grade gold coins and bars are required to be at least 99.5% pure, and silver coins and bars must be at least 99.9% pure.


Adam ONeill

Author, lifelong investor, and creator of

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