Gold Coins held in IRA
When most people think of an IRA, they think of an retirement account that holds stocks and bonds.
This is the most common type of IRA, but there are other types of IRAs that allow tax-advantaged Investments in asset classes like real estate, startup companies, fine art, and Precious metals.
A Gold Coin IRA is a self-directed IRA that holds physical Precious metals in bar and Coin form. These Investment vehicles are also referred to as “Gold IRA”, “Silver IRA”, and “Precious metals IRA”.
Gold IRAs can hold any of the IRS-approved Precious metals: Gold, Silver, Platinum, and Palladium.
Benefits of Gold IRA
Investors are usually attracted to Precious metals when they feel some insecurity or anxiety about their existing financial situation.
Many investors diversify their retirement funds into Gold and Silver after becoming uncomfortable with the over-inflated stock markets and the financial shenanigans played on Wall Street.
Paper investments like stocks and bonds all have counterparty risk meaning other parties can default on their contractual obligations, causing the investor to lose all or part of their Investment.
With physical Precious metals there is no counterparty risk because there are no counterparties.
Other factors driving Investors to the Precious metals are concerns about Inflation, rumors of a Global Economic Reset, and rising tension between the world’s super-powers.
The primary benefit of a Gold IRA is that investors can use their existing retirement funds to purchase physical Precious metals.
Active investors
One of the primary considerations with any Investment is taxes.
Active investors in particular have to pay attention to taxes every time they take profit on a successful Investment.
With normal investing, Uncle Sam takes a cut every time the investor sells an Investment or receives income from an Investment. These taxes obviously the long-term gains from investing.
An IRA, however, is a tax-advantage retirement vehicle and investors don’t have to pay taxes on transactions performed within an IRA.
Let's say you had successfully timed a small rally in the Gold market and made a $100 capital gain by buying and selling a Gold Coin.
Outside an IRA, you would have to pay taxes on the gain and would only have $70 or so left to reinvest.
Inside an IRA, you can reinvest the full $100.
401K to Gold IRA rollover
IRS rules allow investors to convert 401k accounts to physical Gold.The conversion is accomplished with a 401K to Gold IRA rollover.A 401k rollover allows you to move all or part of your 401k to an IRA.There are no taxes and penalties for performing a Gold IRA rollover since the investor’s funds simple move from one IRS-approved Trustee to another.
Home storage Gold IRA
The IRS requires that you hold the physical metal in your Gold IRA with a third-party Custodian.
A home storage Gold IRA (also known as a Checkbook IRA) attempts to get around this by forming an LLC or other legal entity to hold the Precious metals.
There are two risks here.
First, an IRA custodian has to meet a set of lengthy legal requirements. If you don't comply with these requirements, your IRA may be invalid.
Second, there is a temptation to move assets in and out of a checkbook IRA without making proper contributions and withdrawals. Violating IRA regulations or being sloppy with documentation may cause the IRS to declare the IRA invalid.
If the IRS declares the home storage Gold IRA invalid the investor may be subject to penalties, back taxes, and interest for the years in which the IRA didn’t comply with IRS regulations.
Gold IRA tax rules
There are just a few IRS-mandated Gold IRA tax rules to keep in mind:
When transferring funds from one retirement account to another the Investor has 60 days to complete the transaction without tax consequences.
Investors can have more than one IRA at a time. Opening a Gold IRA doesn’t affect existing IRAs.
Investors can contribute to more than one IRA in any given year. For example, a 50-50 allocation strategy would place $3,000 per year into an IRA holding stocks and bonds while another $3,000 went into a Gold IRA.
The IRS has limitations on the Precious metals held in IRAs. In general, Bullion bars and Coins of 99.95% purity are allowed along with Coins from government mints.
Gold, Silver, Platinum, and Palladium can all be held in a Precious metals IRA.
Distributions from a Gold IRA can be taken as cash or physical metal.
Gold IRA fees
Gold IRAs involve more costs than traditional IRAs.
Storing physical Precious metals in a secure manner entails an expense that someone has to cover.
Investors pay an annual storage fee for the metals in their account. This Gold IRA fee is typically $200 or less per year.
Another unique fee for Gold IRAs is the cost to purchase and sell the physical metal held in the account (broker commissions).
Most Gold IRA companies include the broker commission for purchase as part of the account setup fee.
Investors can avoid the broker commission for selling by taking distribution of the physical Precious metals in their account instead of taking cash distributions.
Account setup fees may be waived as part of a Gold IRA company’s promotional offer.
Best Gold IRA
The best Gold IRA is the one that the Investor feels comfortable with based on their unique Investment objectives.
Some Investors will choose their ‘best’ Gold IRA based on the location of the depository, while other Investors might give the ‘best’ designation to the Gold IRA offering the juiciest promotion.
There are a few factors we can list as ‘must haves’ for candidates to be on the Gold IRA list:
- Listed with BBB and maintains an A+ rating
- Insured depository – preferably by Brinks
- Segregated storage of metals
- Regular audits of depository
Noble Gold IRA
The Noble Gold IRA has two factors that make it stand out from its peers.First, the company’s depository is in Dallas, Texas. Investors in the Lone Star State will appreciate having their metal stored at home instead of somewhere like Delaware or California.Second, the low minimum Investment makes it easy to start a new Gold Roth IRA with funds held outside an existing retirement account. This isn’t possible if a company’s minimum Investment exceeds the IRS-allowed maximum contribution of $6,000 per year ($7,000 after age 50).Investors using ‘years in business’ as a comparison factor for Gold IRA companies may not be comfortable with Noble since it is relatively new in the industry.
Schwab Gold IRA
Schwab is a widely-known Investment management firm with a broad array of products and services for Investors.
The company offers traditional and Roth IRAs but does not offer any form of Precious metals IRA.
Citing the volatility in the commodity markets, Schwab suggests that Investors use Precious metals ETFs to gain exposure to Gold.
Although there isn’t a Schwab Gold IRA to take advantage of, the company website provides an excellent resource center for IRAs, with lots of educational material and comparison calculators for Roth vs Traditional IRAs.
https://www.schwab.com/ira
Fidelity Gold IRA
On the long extreme of the ‘years in business’ scale is Fidelity Investments, founded in 1946.
This massive Investment management firm has more than 25 million customers and over $2 trillion in assets under management.
The Fidelity Gold IRA has a very low minimum Investment so first-time IRA investors can easily start a Roth IRA using after-tax income.
Another positive aspect of the Gold IRA at Fidelity is that the company doesn’t offer any proof Coins. There is no temptation for high-pressure sales tactics because the only IRS-approved products available are Bullion bars and Coins.
Investors who focus on BBB ratings may be concerned about Fidelity having a C- rating.
Before scratching Fidelity off the list of candidate Gold IRA companies, consider calling a company representative and asking them why their BBB rating is lower than their peers. Perhaps the rep will have a good explanation.
Startup fees for a Fidelity Gold IRA may be a little higher than other companies but Fidelity’s low minimum Investment ($1,000) may justify this added expense.
Gold IRA companies reviews
There are several websites that gather customer reviews as a service to consumers.
Investors can use these resources to find Gold IRA companies reviews.Better Business Bureau (BBB)
Consumer Affairs
Google Reviews
TrustLink
Trustpilot
Customer reviews posted on sites like BBB and Consumer Affairs are likely to be real while reviews found by searching on terms like “Gold IRA reviews” are usually posted by affiliate marketers.
After doing a little research you will likely notice the difference between legitimate customer reviews and the reviews created by affiliate marketers.
Refer to the Gold IRA page on the website for tips on selecting the best Gold IRA for your unique Investment objectives.
In the table below we list some of the most popular Gold IRA companies as candidates for your consideration.
Gold IRA | Year founded | BBB rating | Proof Coins | Minimum Investment |
|---|---|---|---|---|
Fidelity | 1946 | C- | No | $1,000 |
Patriot Gold Group | 1990 | A+ | Yes | $15,000 |
Birch Gold | 2003 | A+ | Yes | $10,000 |
Goldco | 2006 | A+ | Yes | $25,000 |
Regal Assets | 2010 | unrated | Yes | $10,000 |
Noble Gold | 2017 | A- | Yes | $2,000 |
Conclusions
Gold Coin IRAs allow Investors to hold physical Precious metals inside tax-deferred retirement accounts.
The primary benefit of a Gold IRA is the security and diversification it provides for a traditional retirement Portfolio of stocks and bonds.
Investors can add Gold to their retirement plan without facing any tax consequences by using a 401K to Gold IRA rollover.
The Gold IRA fees for purchasing, selling, and storing physical Precious metals increase the overall cost of the Investment vehicle.
Gold IRA company reviews can be found on the websites that compile consumer reviews. These reviews are more likely to be legitimate than the reviews found by searching "Gold IRA reviews" on the internet.
Visit the Gold IRA page on the website for more tips on selecting the best Gold IRA company.
Bryan V Post is a California-registered Investment Advisor Representative specializing in the Precious metals.
He is the founder and CEO of Satori Traders LLC, a California-registered Investment Advisor.
Bryan has worn numerous hats during his life:
Engineer, Portfolio manager, Precious metals Investor, Technical analyst, Proprietary trader, Swing trader.
