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Personal Finance Gold

How to Hold Physical Gold in an IRA

Updated Apr 05, 2023   |   4-min read

If you’re interested in owning gold or investing in its future value, a self-directed gold IRA account might be a good way to do it. These individual retirement accounts let you invest in gold, precious metals, and other assets (including real estate) to help grow your wealth and diversify your portfolio.

As with any retirement account, there are certain requirements you’ll need to meet to start investing. Our guide outlines these and more below.

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Are there any limitations on how I can hold physical gold?

To use an IRA to invest in gold, you’ll need to follow two IRS guidelines. First, you can only invest in IRS-approved gold. Though the list of approved options changes, the IRS says it must be “highly refined bullion.”

Here’s what that generally looks like:

  • 99.5% pure gold
  • Must be produced by a company that’s nationally accredited
  • Must be in complete, original packaging
  • Must include the certificate of authenticity
  • Coins must be uncirculated and damage-free
  • Bars must be manufactured to the exact weight

Second, you can’t hold the gold in your possession. Though you are its owner, the gold must be stored off-site in an IRS-approved depository. Your gold IRA custodian can help recommend a suitable depository for your investments.

>> Read More: How does a gold IRA work?

When will the physical gold be in my possession?

To withdraw from a gold IRA without penalty, you’ll need to be at least 59.5 years old. Once you reach that age, you can either withdraw and take possession of your gold investments or liquidate those assets, withdrawing their value in cash instead.

Withdrawing from your gold IRA before 59.5 would mean a 10% penalty.

What are the benefits of owning physical gold in an IRA?

Purchasing gold can be a smart way to both safeguard your wealth and, in some cases, grow it.

Here are just a few of the benefits of owning physical gold:

  • Diversification: Putting all your investments in one basket can be risky. Investing some of your funds into gold is a nice way to diversify and reduce your portfolio’s overall risk.
  • Protection from economic downturns: Having your funds in gold also helps reduce losses if the economy — and especially the stock market — takes a turn.
  • A hedge against inflation: As the value of the dollar declines, so does your purchasing power. Gold can protect against this loss, as its value currently outpaces that of the U.S. dollar.
  • Wealth growth: If you believe gold will grow in value, it could increase your long-term wealth. For reference, gold prices have climbed quite a bit over the past decade.

If you’re not sure owning physical gold is the best use of your funds, consider speaking to your financial advisor or accountant. They can advise you on your specific goals and finances.

How you can fund a gold IRA account to get started

To get started with a gold IRA account, you’ll need to choose a custodian. These are companies that manage gold IRA accounts and report on them to the IRS.

Once you’ve established your account, you can fund it in any of these three ways:

  • Cash: Invest cash into your IRA by sending a check or wire payment to your custodian.
  • Rollover: Withdraw funds from an existing retirement account and deposit them into your new IRA. You must do this within 60 days of withdrawing the funds to avoid penalties. To learn how to do this, check out our guide to initiating a gold IRA rollover.
  • Transfer: Have the administrator on your current retirement account transfer all or a portion of your funds to your new IRA custodian. To learn how to do this, check out our guide to initiating a gold IRA transfer.

Remember that you can only deposit up to $6,000 per year in a self-directed gold IRA (it goes up to $7,000 if you’re 50 or older).

Where can I open a gold IRA account?

Gold IRA companies vary in experience, service, and costs, so make sure you shop around and compare your options before moving forward with opening an account. Check out our guide to the best gold IRA providers to get started.