What Is a Gold IRA and How Does It Work?


Deciding whether or not to rollover an existing IRA, 401k, or another such retirement account into a gold IRA is no small decision and depends on your specific goals.

A gold IRA, is a tax-protected, self-directed IRA that allows you to invest in alternative assets such as gold, silver, and other precious metals. Deciding on this investment option requires addressing the following subjects:

  • What are the benefits of a gold IRA?
  • Is a Gold IRA worth it?
  • Gold IRA tax rules
  • What is allowed in a gold IRA?
  • Which gold IRA company is best?
1. What is the benefit of a gold IRA?

1. What is the benefit of a gold IRA?

Gold Diverification

One instant advantage to investing in precious metals is its long historical track record as a store of value and a safe haven asset in times of stubborn inflation and recessionary periods. If you are looking to protect, diversify, and preserve your wealth from stock market volatility, currency debasement, the poor decisions of central banks, and geopolitical instability, investing in this universal store of value is necessary and critical.

A gold IRA, is a kind of self-directed IRA that allows you to invest your retirement savings outside the traditional, publicly traded investment assets such as stocks, bonds, mutual funds, and other paper assets. As stated before, these self-directed IRAs are tax protected and provide the investor with greater control and ability to invest in alternative asset classes such as precious metals.

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2. Is a Gold IRA worth It?

Gold IRAs help offset risk and loss from other assets in your portfolio. Whether it is stocks, bonds, or other paper assets. This asset class provides a natural hedge against inflation that eroding has been steadily eroding purchasing power for over 50 years. That dollar you invested 20 years is not the same dollar.

When you are investing in precious metals, it is important to understand their specific advantages. Gold and other precious metals are a store of value that maintains and grows in value over a longer period of time. They are not designed as a ‘get rich quick’ asset. However, gold has increased in value by 440 percent in the last 20 years. Which is a very good track record.

3. Gold IRA Tax Rules

3. Gold IRA tax rules

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

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 but there are limits.

What are the cons of gold IRAs?

Gold IRA Annual Limits and Distributions

This type of IRA has an annual limit. For people under 50, the limit is $6,500. For people over 50, $7,500. Taxes must be paid once distributions begin. Hence, this type of gold IRA is better suited for long-term holding.

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.

4. What is allowed in a gold IRA?

4. What is allowed in a gold IRA?

What are IRA eligible coins?

Only certain coins and bullion bars are allowed in a precious metals IRA. The gold, platinum, and palladium must be .995 percent pure gold or silver to meet IRS requirements to be permitted as an investment in a gold IRA.  Silver must be .999 minimum fineness.

Collectibles are not accepted as investments. The current trading value and the finest of the commodity are what determine the acceptability of the metal. Not the rarity of the metal.

IRS Approved Coins Include:

Gold Investments

  • American Gold Eagle (bullion)
  • American Gold Eagle (proof)
  • American Buffalo Coin
  • Canadian Gold Maple Leaf
  • Australian Nugget/Kangaroo Coin
  • Austrian Philharmonic Coin
  • Gold Twin Maples Coin
  • Gold Gyrfalcon Coin
  • Gold Rose Crown Guinea Coin
  • Gold Polar Bear and Cub Coin
  • Valcambi Combi Bars
  • A Variety of Gold Bars and Rounds

Silver Investments

  • American Silver Eagle (bullion)
  • American Silver Eagle (proof)
  • America the Beautiful Silver Series
  • Canadian Silver Maple Leaf
  • Australian Kookaburra Coin
  • Austrian Philharmonic Coin
  • Mexican Libertad Coin
  • Silver Twin Maples Coin
  • Silver Gyrfalcon Coin
  • Silver Rose Crown Guinea Coin
  • Silver Polar Bear and Cub Coin
  • A Variety of Silver Bars and Rounds

Platinum Investments

  • American Platinum Eagle Coin
  • A Variety of Platinum Bars and Rounds

Palladium Investments

  • Canadian Palladium Maple Leaf Coin
  • A Variety of Palladium Bars and Rounds

Can I store my gold from my IRA at home?

IRS rules stipulate that the owner of the gold IRA cannot be in physical possession of the precious metals within the IRA account. An approved storage facility and custodian are partnered with the gold IRA company to facilitate this.

Investors are not allowed to transfer pre-owned precious metals into your Gold IRA. Also, buying precious metals and sending them to your IRA is not permitted. To reiterate, a partnered custodian manages all transactions.

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5. Which Gold IRA Company is Best?

You may be wondering what gold IRA company should I consider. There are so many. This process can be daunting and, at times, confusing. We have taken the time, to review and rank the top Gold IRA’s companies, based on customer feedback, industry track record, fees, investment minimums, and each company’s unique offerings.

You, as an investor, will be building a long-term relationship with whatever gold IRA company you choose. For this reason, we have also detailed each company's culture and core values. See our list of the top gold IRA companies and find the right company for all the right reasons. 

To simply access the free guides offered by each we have provided a link here.

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Precious Metals and Gold IRA Company Reviews


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 PreciousMetalsInvestmentPortfolio.com