How to Invest in Gold for an IRA
During times of economic turmoil or high inflation, many investors use gold as a hedge. Physical gold coins and gold bars have long been recognized as storehouses of value. In 1998, IRS regulations were amended to permit physical gold to be held in IRA accounts. Originally only 24-karat coins and bars (at least .995 percent pure gold) were eligible. Subsequent IRS rulings now permit individual investors to hold U.S. minted 22-karat gold American Eagle coins in their IRA accounts as well. Setting up and funding a gold-backed IRA account is a straightforward process requiring only a few forms.
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Things You'll Need
- An IRA account with an IRS-approved gold trustee.
- Sufficient monies to fund the account
Instructions
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Establish an IRA account with an IRS-approved gold trustee.
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Deposit or transfer sufficient monies into the account.
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3
Instruct the trustee to purchase gold coins or bars on your behalf.
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4
Authorize the trustee to transfer your physical gold to one of the two government-approved custodial firms. The custodial firm will provide secure storage for your gold assets.
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Tips & Warnings
Gold bars generally carry a lower sales premium than gold American Eagle coins. This is because the coins have value as collectibles in addition to their intrinsic precious metal content. For additional information about owning gold in an IRA account, download a copy of IRS Publication 590.
Many companies offering gold-backed IRAs charge annual account maintenance and storage fees. Physical gold can sometimes be subject to significant fluctuations in price. Furthermore, while the value of physical gold has never fallen to zero, it does not earn any interest or generate any cash dividends.
