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Originally Posted On: https://investingin.gold/how-to-buy-physical-gold-in-ira/

Gold investing offers individuals an alternative way to diversify their retirement portfolio beyond traditional Wall Street assets. Gold IRAs differ from standard IRA accounts by permitting physical gold, silver and platinum coins as investments.

These precious metals provide an inflation hedge and wealth insurance, but require special care in their storage. Here are some tips for purchasing physical gold for an IRA account.

Self-Directed IRAs

Traditional IRAs, 401(k) plans and other conventional retirement accounts typically don’t permit investments in precious metals such as gold. But you may be able to diversify your portfolio with physical gold investments by opening a Self-Directed IRA – managed by a custodian that allows direct purchases – providing storage insurance and custody requirements.

Physical gold does not generate income like stocks, mutual funds or ETFs do, making it an attractive addition to a tax-deferred retirement account. Just remember that any assets held within your IRA will be subject to taxes upon withdrawal.

An additional drawback may be that you must pay the full market price for the metals even if the custodian does not sell them to you at a profit. Furthermore, you must comply with IRS regulations regarding storage locations and times; specifically requiring gold be stored in a depository that meets specific security and insurance standards.

Custodians

The IRS mandates that physical precious metals must be stored in a depository that meets certain security and insurance standards, prohibiting IRA holders from keeping gold at home or in personal safes. Therefore, investors must select a custodian that accepts self-directed IRAs such as an individual retirement account trust company or bank – one with access to numerous precious metals dealers with transparent pricing for its services would be ideal.

Custodians should also assist with the rollover process, which involves moving money from your current retirement account into your gold IRA. This can be accomplished either directly institution-to-institution transfer or working with the IRA company on in-kind distribution; either option may take time and need knowledgeable guidance to execute correctly. Lastly, precious metal IRAs tend to be more costly than their traditional counterparts due to setup fees, transaction fees, management fees and storage fees that must be factored in.

Taxes

Gold IRAs can provide investors with diversification beyond stocks and bonds, however their inclusion should only come after careful thought, consultation with an advisor or a gold IRA expert such as Christopher Horne from Raremetalblog.

Even though precious metals IRAs provide tax-deferred growth while in your account, when withdrawn they must be taxed as with any IRA asset. They don’t generate dividends or interest income so your return may not match up to other investments.

When considering a precious metals IRA, be sure to select a custodian who offers an extensive range of IRA-approved physical bullion products and is licensed to buy, sell and store these metals on behalf of its customers. Be aware of any fees related to buying, storing or selling the precious metals you purchase as these costs could eat into your returns; some companies even charge flat storage/management fees.

Storage

Gold IRAs may seem attractive because of the ability to invest in physical precious metals; however, these accounts also come with additional expenses. There may be one-time fees to open one and annual storage and insurance charges. Furthermore, precious metals themselves are likely subject to markup charges that vary based on whether they’re bullion coins or proofs.

Gold IRA investments tend to be less liquid than stocks and mutual funds, which could prove problematic when reaching age when required minimum distributions (RMDs) must be taken.