Anyone approaching or even thinking about retirement is likely to encounter the term "Gold IRA", but what is a gold ira and is it safe to invest in one? In this post we will take an in-depth look into gold and precious metals IRA's and how they work.


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What Is A Gold IRA?

Before we answer that we need to find out what an Individual Retirement Account is. In the United States, an IRA is a type of investment retirement plan that holds assets accumulated by the investor during their working years.

It provides tax advantages to help promote growth and ultimately for returns, such that upon retirment, the investor can draw on the funds to help with living expenses.

A Gold IRA therefore, is a particular type of IRA that is specifically designed to allow the investor to buy and hold gold and other precious metals as an investment class.  

A Traditional IRA typically holds cash, bonds, stocks and mutual funds for example, but a gold ira can hold gold, silver, palladium and platinum assets in the form of bullion, bars and collectible coins, and also precious metals related stocks.

Not all gold IRA funds are the same and each company that offers the funds will have different investment options for the client. Some are devoted purely to gold, while others are far more wide-ranging across precious metals.

Ttraditional retirement accounts and Gold IRA's must be held separately due to their differing asset classes and taxation accounting requirements.

The assets in a gold IRA must also be held in an IRS-approved depository facility and are usually bought through a broker/dealer or other custodian.

Is A Gold IRA A Good Investment?

Investing is a risky business and no investment is ever truly "safe". Your real focus should be on the minimisation of risk.

Precious metals, and particularly gold, has always been seen as a store of wealth and considered "relatively" safe.

That is, it holds its value over time. This aspect keeps the risk level of gold low in comparison to owning a company's shares for example, which could fluctuate in price greatly on a daily basis or even disappear if the company went broke.

In saying that, holding gold yourself (in your own location) would be risky because you could be robbed. These are simplistic examples of course, but it paints the picture. You always have risk with any investment.

It's how you minimise that risk that matters. Investing with professionals who know their markets, products and regulations is also essential.

A gold backed IRA is considered, in comparison to other investments, a relatively safe form of investing due to the nature of the asset and the way in which it is structured within the IRA investment vehicle, and also by virtue of the IRS imposed need to have the asset stored in an approved depository. 

Gold and Silver Bars And Coins What Is A Gold IRA

How Does A Gold IRA Account Work?

There are a number of things to consider when opening an account. First and foremost is how a physical gold IRA fits within your overall existing investment portfolio. To know this, you should discuss your options with your financial adviser.

You should become aware of the tax implications and also the effects on your future income.

The next thing to consider is what type of IRA to invest in. Based on advice you may decide on a traditional IRA or SEP (Simplified Employee Pension) IRA, where your contributions are tax deductible, or a Roth IRA, where your distributions are tax free*.

Holding physical gold or other precious metals in an IRA requires you to set up a self-directed IRA (SDIRA). This is usually done with the assistance of a broker and/or a custodian.

Custodians can be banks, brokerages and trust companies, but they must be IRS approved to act as a custodian.

An example of a custodian used by a number of gold IRA investment companies is Equity International as mentioned in a review I did about one ira investment gold company on my reviews page.

Each company you investigate will either have a number of preferred custodians or they will help you to find one that suits your purposes. The final choice is yours to make.

When opening an account and transferring assets into it, your existing account (if you are doing a rollover for example) may need to be pre-qualified to determine any tax implications and penalty fees that may apply.

Your IRA specialist will work closely with you to determine this and to make it as smooth a transition as possible. 

Types Of IRA Investment Accounts

Traditional Gold IRA

Roth Gold IRA


  • Tax-deferred account
  • Contributions not taxed
  • Contributions tax deductible
  • IRS sets contribution limits
  • Taxed on distributions
  • After-tax savings account
  • No up-front tax deductions on contributions
  • No taxes on distributions
  • Available to business owners, self-employed
  • Contributions not taxed
  • Contributions tax deductible
  • Higher contribution limits
  • Taxed on distributions

How To Buy, Transfer Or Rollover Into A Gold IRA

Once you've selected a reputable firm to help you set up your IRA, you now need to find a dealer to handle the actual process of adding gold and precious metals into your IRA.

The dealer is someone that your investment company or custodian will be able to find for you (unless you know someone personally that is an approved dealer), and they (or the custodian) will organise the initial contribution that you will make to the account.

This contribution can be in the form of a rollover from a 401k, 403b or 457 account plan, a direct purchase of metal, or a transfer from another account you own.

Often there are contribution limits, depending on how you make your initial contribution and due to the type of IRA you've created and even the company you deal with.

After the initial contribution, your dealer/custodian/financial planner relationship will determine the types of future investments you make, the timing, amounts and values as you add to your gold IRA investment portfolio.

Can I Store My Gold At Home?

In short...NO.

A gold IRA that holds physical gold as an asset, must store that asset in an IRS-approved depository. Your custodian will usually offer a number of available storage facilities for you to choose from.

You can not keep the gold or other precious metals in your own storage locations such as safety deposit boxes or home safes.

Another reason why IRS approved facilities are required is because all physical metals in an IRA must meet IRS "fineness" standards regarding their weight purity.

Only certain precious metals that meet strict standards are allowed to be added to a gold IRA. For example, with coin investments, you are limited to bullion coins that have been issued by approved government mints. 

Gold IRA Rollover Pros And Cons

A list of the benefits and risks of precious metals IRA's


  • Taxation benefits depending on Traditional or Roth IRA  
  • A well-known long-term hold investment
  • They are self-directed so you have good control
  • It acts as a store of wealth and a hedge against your other investments
  • Its a way to diversify your investment portfolio
  • Variety of investment assets available
  • You can take advantage of annual contributions


  • Higher fees for buying, storing, insuring, transportation and custodian fees  
  • Custodian/dealers must handle all transaction. You can't invest existing gold directly yourself
  • No interest, dividends or income. Profit advantages come with sale (tax on capital gain)
  • Mandated minimum distributions must be taken once you reach 72
  • Precious metals are an illiquid asset, so the buy/sell market is slower

How Do I Withdraw From A Gold IRA?

Because retirement funds are usually invested from your pre-tax income (meaning they are not taxed), then a 10% IRS withdrawal penalty will apply if you start withdrawing before you turn 59 and a half.

The objective of these funds is to build strong nest-eggs for retirement, so you are discouraged from withdrawing early.

Once you turn 59 and a half you can start withdrawing without penalty, but you don't HAVE TO withdraw if you don't want to. Once you turn 70 and a half however, you are required to withdraw a minimum amount each year (by or before the 31st of December each year). By that stage your account should be quite healthy.

The actual minimum amount you can withdraw is calculated by your Self Directed IRA and reported to you annually. IRA owners are responsible for ensuring they withdraw the correct amount each year. Penalties can apply if not done correctly or on time.

The first withdrawal can be postponed until April 1st the following year but this is subject to change and you should check with your manager. If you are a Roth IRA owner, you do not have minimum withdrawal obligations.

Gold IRA Distributions

There are a number of distribution otptions you can choose, with the primary ones being In-Kind distribution, where physical precious metals are delivered to you as bars or bullion coins, or Standard Liquid distribution, where a check, wire transfer or ACH is sent to an account you own.

You should always ensure you have your distribution option set up long before you actually want to take distributions. This will eliminate any confusion and also ensure you get the best conversion rates.

Precious Metals Liquidation

Whether you hold precious metals inside or outside of an IRA, you can often liquidate your precious metals or personal holdings by working directly with a gold company.

Typically they will ask you about the types of holdings (denomination, quantity, etc) and attempt to lock in a good price (hopefully above spot price).

Once that's done they will work with you to receive the metals (if held outside an IRA) and determine the best way to send you the resulting funds. After receipt and inspection of the assets, payment is typically issued within one to three business days.


Like all investments, gold IRA's have their pros and cons. It is a specific investment vehicle that has its own requirements and methods of investment that you need to be fully aware of to ensure that its something you'd like to add to a diversified investment portfolio.

You should always seek professional financial advice and then do your research on the various companies that offer gold IRA's and exactly what each product and asset type delivers in terms of potential value.

To start your company research go to my reviews page to investigate three gold ira companies that may suit your needs.

These companies are considered the top operators in their field and each one has a variety of products and services that will help you to make a more informed decision.

* No information in this article is intended as financial or tax advice. Consult a professional advisor to understand the imlications of ira investments on your own financial plan.

About the Author Aaron Parker

Aaron is an SEO, a precious metals investor, a messenger marketer and a long time high ticket affiliate marketer who began his "career" in the pre-floppy disk days of the mid 80's. He's seen it all and done it all and is still learning. His driving ambition is to help as many people and businesses as possible to prosper and profit.

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