What is a Gold IRA?

What is a Gold IRA

A gold IRA is an individual retirement account (IRA) that holds actual gold or other precious metal. It works similar to a regular IRA, except that instead of paper funds, it holds gold. Gold IRAs are good because the price of gold usually goes up when the economy goes down, making it a hedge against inflation.

To have a gold IRA, you must have a trustee or custodian for your IRA as well as an IRS improved depository. After that, you must by the approved gold or other precious metals, then transfer it to the depository and let your trustee can account for it. It is a difficult process, but worth it for you as an investor. Gold IRAs have been increasing in popularity since about 2008 with more and more people investing in them.

To be able to put your IRA funds into gold, you first must make a self-directed IRA. This type of IRA is one that is managed by an investor manages directly. The investor is allowed to have a wider range of products than that of a traditional IRA. To have a gold IRA, you must have a broker to buy the gold for you and then have a trustee or custodian to start and manage the account. The company will then store your actual gold, not some paper version of the gold.

Custodians must be approved by federal or state agencies and can be banks, credit unions, savings and loans, trust companies, or brokerage firms. The custodians do not buy the gold for you, you need an investor to do that. The custodian may have a list of investors for you to choose from that can buy your gold. Gold IRAs are not for everyone but can be good for you. You need to weigh the pros and cons of a gold IRA to see if it is the right investment for you. Some of the pros and cons are listed below for you to look at.

Pros and Cons of a Gold IRA


Gold can add diversification to your portfolio allowing you to protect you against fluctuations in the market. You do not want to rely too much on paper investments because they can fluctuate more than gold does. Adding gold or other precious metals is a good way to add diversification to your portfolio.


Gold has historically been a stable part of the economy that many people have invested in for many years. Having a gold IRA helps you to have stability in your investment portfolio.


When the economy or political scene has been in turmoil, gold has still done very well. When the economy is bad, the value of gold usually goes up while paper investments go down. When the economy is better, the value of gold tends to go down while paper investments rise. This creates a balance in your portfolio.

Tax Benefits

Gold IRAs have the same tax benefits of other IRAs, contributions to your gold IRA are tax-deductible. Withdrawals from the Roth IRA are also tax-free, saving you money in an emergency.

Long-term Hold

Gold is a good investment for IRAs because it is not a liquid asset and will last a long time, just as an IRA investment should. You want your investments to last until you retire, and gold will still be there for you.

Greater Control

Gold IRAs are self-directed IRAs which means you have direct control over your investments. With this type of IRA, you make all the decisions about your investments. This helps you to invest what you want and what you need to do in order for you to have a great retirement investment.

Risks of Gold IRAs

No Tax-Advantaged Income

You do not get any tax advantages from gold bullion because it does not pay any interest or dividends. The only break that you really get is when selling your gold at a profit and you do not have to pay capital gains taxes. While the capital gains benefit is real and can be a lot of saved money, there are not any other taxable income from a gold IRA.

Higher Fees

You must pay fees to your custodians or trustees to store, insure, and buy your gold. You must also pay to insure it, and to buy, ship, and transport the gold. All these cost money, resulting in higher fees all the way around. You just must be aware that there are more fees attached to a gold IRA, but it can lead to more money in the long run.

Funding Restrictions

You cannot move gold that you already own into your gold IRA, it is not allowed. You also cannot buy the gold to put into your gold IRA on your own, you must have your custodian or investor do it for you. This makes it difficult for you to add to your portfolio on your own.


A gold IRA can be the perfect investment tool for you to provide an income after your retirement. It is a safe, stable investment that usually keeps its value for the entirety of your IRA. To find out more about investing in a gold IRA you can look at this website: https://www.businessinsider.com/personal-finance/what-is-a-gold-ira. There are many benefits to having a gold IRA, but you also have some risks that you need to be aware of.

Some of the benefits to having a gold IRA are that you have more diversification, it has more stability and balance, there are tax benefits, and long-term hold and you have more control over your investments.

There are risk factors that go along with the gold IRA, as well. These include no income-based tax benefits, there are higher fees, and there are funding restrictions. You need to weigh the benefits and the risks to see if a gold IRA is a good way for you to invest.

Gold IRAs can be a great investment for you to provide income for your retirement, you just need to be aware of the extra work that it entails, and the risks involved.