The Internal Revenue Service (IRS) may technically allow you to hold gold in your Roth IRA, but the custodian must physically withhold the gold. An alternative way to invest in gold is through exchange-traded funds (ETFs) that invest in gold futures or companies in the gold industry. To use an IRA to invest in gold, you must follow two IRS guidelines. Firstly, you can only invest in IRS-approved gold.
The list of approved options changes, but the IRS states that it must be “highly refined ingots”. Gold has been a measure and standard of value for centuries and is known to maintain or increase its value when other investments, such as stocks or bonds, decrease in value. For this reason, you may want to invest part of your retirement assets in gold through your Roth IRA. Investing in a gold coin IRA has restrictions and requires more effort and planning on your part, but it is available as an option if you are committed to its benefits.
In short, this means that you cannot invest in physical gold bars (or any other approved investment metal) through a standard Roth IRA. The easiest way to invest in gold through your IRA is to buy shares in gold mining companies or buy an investment fund that includes shares in mining companies. This strategy is known as buying “paper gold”. There are also gold ETFs (GLD) and mining ETFs that provide indirect access to gold investment.
While traditional IRAs have tax-free contributions and tax-deferred growth, Roth IRA distributions are tax-free and contributions are made with dollars after tax. Gold companies vary in experience, service, and costs, so be sure to compare your options before proceeding with opening an account. Bullion bars and gold and silver rounds are also allowed in an IRA when they are 99.9% pure. The investment options for Roth IRAs and regular IRAs are much broader than 401 (k) IRAs, although the IRA custodian can still limit the types of assets that can be selected.This is the easiest way to invest in gold through your IRA, as everything is managed in the background by your current depositary and the new.
During his tenure as director of the Mint, Moy says there was little demand for gold IRAs because they involved a very complicated transaction that only the most persistent investor was willing to pursue. The IRS has issued rulings on private letters to major gold ETFs stating that IRAs can own ETFs. To own gold, whether in coins or bullion, in an IRA you need a true self-directed IRA offered by some custodians.With a gold and silver Roth IRA, your contributions are after-tax, which means you'll pay taxes on the money before depositing it into your IRA account. You can transfer funds or assets from one IRA to another through a process known as a “rollover”, which can be from a Roth or Traditional IRA (and vice versa), as well as an employer-sponsored account such as a 401 (k).
You will need to find a specific trustee who offers investments in gold coins, or a self-directed trustee who makes your IRA investments in the legal investments of your choice.Orion Metal Exchange is a California-based company that offers IRAs for gold and a variety of precious metals, coins and bars. IRA-eligible coins, bars and gold rounds must meet a series of requirements set out by the Internal Revenue Code in order to be able to maintain a self-directed IRA. In fact, many investors buy gold because of its growth prospects, and many analysts predict that gold will continue to see gains in the future. Gold IRAs are usually defined as “alternative investments”, meaning that they are not traded on a public exchange and require special experience to value them.