Gainesville Coins Guide: How To Set Up Gold-Backed IRAs and What They Can Hold

Adding physical gold assets to your portfolio is one way to invest in precious metals — but you need to know the right way to go about it. Metals like gold can be held in a specific type of individual retirement account called a self-directed IRA, which is similar to a conventional IRA. With both types of accounts, contributions are made on a pre-tax basis; the associated taxes are deferred until distributions are taken. You can also choose to hold precious metals in a Roth IRA, which is funded with after-tax funds, so you won’t be taxed when you make a withdrawal. 

“There are obvious tax benefits of keeping gold in an IRA,” says Everett Millman, a precious metals specialist at Gainesville Coins. “[Particularly] if someone has a very large position in precious metals, it would make sense to get those benefits.”

Understanding Gold-Backed IRAs

Self-directed IRAs, like conventional IRAs, might contain a variety of stocks, bonds, and mutual funds. You can also include several other items in self-directed IRAs, though — ranging from real estate to physical precious metals, such as gold.

“Self-directed IRAs can hold all sorts of alternative assets,” Millman says. “People who are drawn to gold and silver like having control over their investments and money. They like that they can hold it in [an IRS-approved depository and] freely trade or sell it when they choose.”

Coins, including some that are legal tender, and rectangular-shaped bars of precious metals can be purchased for inclusion in a self-directed IRA if they possess certain qualifications the IRS has established.

Gold physical precious metal assets must have a purity level of at least 0.995, for instance; silver items need to have a fineness of 0.999 or higher. To receive the associated tax benefits, precious metal assets you purchase for inclusion in an IRA must also be stored in a recognized financial institution or IRS-approved depository.

“It is a requirement,” Millman says. “You cannot just keep your metals at home and include them in your retirement account.”

Storing the assets remotely, he says, can provide safety benefits.

“The gold in a vault is insured,” Millman adds. “You don’t have to take on the liability of storage. If someone is storing a lot of metals in their home and anybody gets wind of it, there is a potential for theft. You could be putting yourself or your family in danger by keeping that many valuables in your home.”

How To Get Started

To set up a self-directed IRA, you must complete an application. Once the account has been created, you’ll be able to fund it. You can add money directly to the IRA from a checking or savings account or you can transfer funds from another eligible retirement account, such as a SIMPLE IRA or 401(k).

If you choose to roll over funds, you can either move some from your current account provider to your new account or have your IRA custodian mail you a check, which you’ll then need to send to your new IRA provider. If the money is deposited in your self-directed IRA within 60 days, you shouldn’t incur any additional fines.

You can then use the funds you’ve added to your self-directed IRA to purchase gold or other precious metal items from a provider like Gainesville Coins, which has bought and sold gold, silver, platinum, and palladium in more than 70 countries.