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Investing in gold can be a smart way to diversify your portfolio, reduce your overall risk, and protect your wealth in the long run. Gold individual retirement accounts (IRA) are one method of investing in these precious metals.
Many institutions offer gold IRA accounts, so it’s important to compare your options before investing. We’ve compared and reviewed five of the top choices below.
Keep in mind that you’ll want to weigh both the benefits and the risks of gold IRAs as with any investment. You should also speak with your financial advisor to be sure it’s the right move for your finances and investment goals.
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How a gold IRA works
To invest in physical gold, you’ll need a self-directed IRA. These are the only IRA accounts that allow you to purchase hard assets, including precious metals, real estate, businesses, and more. Legally, these IRA accounts have to have what’s called a “custodian” — a bank or other institution to keep records of the account, handle disbursements, and report to the IRS regarding it.
To fund a gold IRA, you have two options. You can rollover or transfer funds from any existing IRA, 401k, 403b, and 457b accounts, or you can contribute directly to the account — up to $7,000 per year, depending on your age.
Once your IRA is funded, you’ll choose the precious metals you’d like to buy and direct your custodian to make the purchase using your account. They’ll be able to recommend a storage facility where your purchases can be stored.
You can technically withdraw money from your IRA at any point, though if you do so before reaching age 59.5, you will owe a 10% penalty.
You can learn more by reading our guide on how a gold IRA works.
Compare the best gold IRA companies
Find the best gold IRA company
Best gold IRA reviews
It’s important to choose the right provider so that you can maximize the benefits of your gold IRA account. Use the reviews of our partners below to find the best gold IRA company for your goals.
Oxford Gold Group
- Open a gold IRA and purchase precious metals from one place
- Offers a variety of educational content to keep account holders up to speed on the industry
- An annual fee of $175 or $225 depending on the account balance
The Oxford Gold Group has been in operation since 2017 and specializes in gold and precious metal IRAs, as well as gold and silver home deliveries. The company has an A+ rating with the Better Business Bureau and a 4.8 out of 5 on Trustpilot, based on customer reviews.
Oxford takes a very education-forward approach to its services. The company offers loads of explainer videos, informative articles, and an entire learning center to help investors make the best choices for their finances.
Gold IRAs with Oxford include a $175 annual flat fee, as long as your account is worth $100,000 or less. If your account goes above this threshold, the annual fee is $225.
Lear Capital has been in the precious metals business for nearly a quarter of a century and has served over 70,000 customers in that timeframe. The company has an A+ rating with the Better Business Bureau and 4.7 out of 5 stars on Trustpilot.
Like Oxford, the company is big on educating its customers. Lear’s website is chock full of resources, news, price charts, and even a precious metal encyclopedia. There are also handy tools, like the portfolio comparison calculator and the minimum distribution estimator, to help you make the best decisions for your finances.
The annual cost for a gold IRA with Lear Capital is $160 and includes storage and insurance. There are no set-up fees.
What is the best gold IRA?
Gold IRAs and fees vary by provider, so it’s important to compare your options before deciding who to open your account with.
When considering different institutions, be sure to pay attention to:
- Initial transfer and set-up fees
- Annual management fees
- Storage fees
- Availability of customer service
- Knowledge and investment resources
- Past customer reviews
If you’re not sure which provider is best for your goals, consider involving a financial advisor. They can help you make the right decision based on your retirement plan.
Is a gold IRA worth it?
Gold is generally considered a safe investment that can withstand severe market fluctuations and downturns. Gold prices are up over the last few decades, though there have been some dips during that time. As of October 14, 2020, gold’s current value is almost $1,900 an ounce.
A gold investment is also seen as an excellent way to diversify your portfolio. If you’re already invested heavily in stocks, bonds, real estate, and other vehicles, gold can give you a hedge against risk, helping soften the blow should you see financial losses in other areas.
Can I only hold gold in my gold IRA?
Since gold IRAs are technically self-directed IRAs, gold bars and coins aren’t the only things you can hold in these accounts. Also referred to as precious metals IRAs, you can purchase other precious metals, like silver, platinum, or palladium, or you can put the funds into real estate, commodities, tax liens, partnerships, and more.
However, you can’t invest it in collectibles, antiques, gems, stamps, or life insurance, among other things.
Is there a minimum investment to open a gold IRA?
The minimum investment depends on the institution offering the gold IRA. The IRS doesn’t have minimum investments, but it does have annual maximums. These depend on your age and typically go up to $7,000 per year.
What is IRS-approved gold?
Per IRS rules, only certain types of gold and precious metals can be held in an IRA. JM Bullion has a good list you can use to guide your investments. You won’t be able to use your IRA funds to purchase metals not on this list, as they have not been deemed pure enough.
Make sure to look out for gold IRA scams
As you go about your search for a gold IRA company, always do your due diligence. Scams are rampant in the gold IRA business, and it could mean significant loss if you fall victim.
Common signs of a scam include very pushy sales tactics, talks of “rare” or “collectible” coins (these aren’t IRS-approved), or murky and misleading contracts. Some companies will also sell fake IRAs, duping you into transferring your funds into an unknown account, while others will feign gold purchases, instead funneling the money into their own business.
To safeguard your cash, only do business with a legitimate, credible, and trusted company, like the six mentioned below.
Recap of the best gold IRA companies
Author: Aly Yale