We all want a comfortable retirement free of financial stress and worry. But achieving that? Well, that takes planning.
For some, it might mean opening a traditional IRA. If you’re looking to diversify and protect against inflation, a traditional gold IRA might be an even better option. These accounts allow you to invest pre-tax dollars in things like gold, silver, and palladium, among other things.
If this strategy sounds like something you might like to incorporate into your retirement plan, this guide can help. Keep reading to learn more about traditional gold IRAs and how they can help you achieve your long-term wealth goals.
In this guide:
- How does a traditional gold IRA work?
- Traditional gold IRA guidelines
- Best traditional gold IRA companies
- Traditional gold IRA vs. other account types
- Is a traditional gold IRA worth it?
How does a traditional gold IRA work?
A traditional gold IRA (Individual Retirement Account) is a type of self-directed IRA that allows you to invest in various tangible assets — gold and silver included. You can also invest in other items, like collectibles, antiques, art, and in some cases, even real estate.
With a traditional gold IRA, you’ll make contributions with pre-tax money — money earnings you haven’t yet paid income taxes on. Once you withdraw the funds, later on, that’s when you’ll pay the taxes.
For this reason, traditional IRAs are typically best if you expect your income tax bracket to be lower in retirement. If you predict you’ll have a higher tax bracket once you retire, then a Roth gold IRA may be a better option.
If you do opt to open a traditional gold IRA, you’ll need to find a gold IRA custodian who can help. These companies can set up your account, purchase the IRS-approved gold and other metals on your behalf, ship the metals to a secure depository, and handle all the IRS reporting. They will also assist you with funding the account, which typically involves rolling over or transferring funds from an existing retirement account (like a 401(k) or other IRA). You can also contribute cash to your traditional gold IRA if you’d prefer.
>> Read more: How does a gold IRA work?
Traditional gold IRA guidelines
The IRS has several guidelines you’ll need to adhere to if opening a traditional gold IRA account is on your radar. For one, you can only contribute so much. Currently, the limits on traditional IRAs are $6,000 in contributions each year if you’re 49 or younger and $7,000 per year if you’re at least 50.
These contributions are tax-deductible — at least up to a point. The exact deduction you can take is based on your annual modified adjusted gross income (AGI).
| Tax Filing Status | Modified AGI | Deduction |
| Single or head of household | $66,000 or less | Full contribution (up to contribution limit for your age group) |
| Single or head of household | $66,000 to $76,000 | Partial deduction |
| Single or head of household | $76,000 or higher | No deduction |
| Married filing jointly | $105,000 or less | Full contribution (up to contribution limit for your age group) |
| Married filing jointly | $105,000 to $125,000 | Partial deduction |
| Married filing jointly | $125,000 or more | No deduction |
| Married filing separately | $10,000 or less | Partial deduction |
| Married filing separately | $10,000 or more | No deduction |
You can continue making contributions to your traditional gold IRA account until you reach the age of 70.5. After that, only Roth IRA contributions are allowed.
Withdrawals are also tied to age. Though you can technically withdraw funds from your account at any time, doing so before age 59.5 will mean a 10% penalty. At age 72, you’ll also need to start taking required minimum distributions.
Best traditional gold IRA companies
Many companies can help you establish and manage a traditional gold IRA account, each with its own unique fee structures, services, and terms. To make sure you’re getting the best fit for your long-term retirement needs, always shop around first and compare your options.
Here are the best traditional gold IRA companies:
Best overall: American Hartford Gold
Editorial Rating: 5 out of 5
- Received a 5 out of 5 rating by its customers on Trustpilot
- Purchase gold, silver, and platinum coins and bars
- Talk to a representative at (866) 525-9625
American Hartford Gold helps individuals and families diversify their portfolios with precious metals. The company’s three-step process for opening an account includes speaking with a representative to complete some paperwork, transferring funds to the account, and purchasing metals to store in a secure vault.
The educational resource section on its website has price charts and market news to keep you informed on how your precious metals are performing.
Best for platinum and palladium: Oxford Gold Group
Editorial Rating: 4.6 out of 5
- Set up an account in as little as 24 hours after submitting a completed application
- Education-focused approach with plenty of learning materials
- Talk to a representative at (877) 544-1523
If you’re looking for a gold IRA company with excellent ratings, Oxford Gold Group is it. The company has an A+ rating with the Better Business Bureau and 4.9 stars out of 5 on Trustpilot, as of September 20, 2022.
Oxford can assist with setting up and funding your gold IRA account, purchasing your metals, and funding your account. Account statements are mailed out quarterly (or more for a fee).
Best buy-back guarantee: Goldco
Editorial Rating: 4.6 out of 5
- Has been in business for 14 years
- Requires a minimum account balance of $25,000
- A+ rating with the BBB
Another highly-rated gold IRA firm is Goldco, which has an A+ with the BBB and 4.8 stars on Trustpilot, as of September 20, 2022.
Goldco’s standout feature is its wide array of educational content, which can help you learn more about gold investments and make better choices regarding yours. The company also has easily accessible customer service — available via chat, phone, and email.
Best risk-free guarantee: Lear Capital
Editorial Rating: 4.7 out of 5
- Take up to 24 hours after placing an order to reconsider without any penalties
- Offers a price-match guarantee
- Free evaluation of metals from other companies
Lear Capital offers multiple unique benefits. These benefits include a price-match guarantee where the company will consider matching better prices found elsewhere, a 24-hour risk-free period to cancel your order if you change your mind, and online portfolio tracking.
Best price protection: Red Rock Secured
Editorial Rating: 4.9 out of 5
- Covers the difference in price drops for qualified metals
- Certain accounts qualify for “no-fees-for-life”
- Speak to a representative at (855) 490-4621
Red Rock Secured offers a unique benefit where it’ll cover the difference on any price drops for certain qualified metals. Check to see which metals qualify for this benefit.
Best intro offer: Augusta Precious Metals
Editorial Rating: 4.7 out of 5
- Opening a new IRA account can qualify you for free gold
- Requires a minimum of $50,000 in metals to open an account
Augusta Precious Metals offers gold IRAs and a variety of precious metals, coins, and bullion. You’ll need at least $50,000 in precious metals in order to open an account.
Traditional gold IRA vs. other account types
A traditional IRA isn’t the only account that allows for investing in gold and precious metals. Both Roth IRA and SEP IRAs may be options as well.
Here’s how all three accounts differ:
| Traditional IRA | Roth IRA | SEP IRA | |
| Best for | If you expect your tax bracket to be lower in retirement | If you expect your tax bracket to be higher in retirement | Self-employed people, small business owners |
| Contribution | Pre-tax | Post-tax | Pre-tax |
| Contribution limits | $6,000, if you’re 49 or under $7,000, if you’re 50 or older | $6,000, if you’re 49 or under $7,000, if you’re 50 or older | $58,000 or 25% of your annual compensation, whichever is smaller |
| Tax-deductible | Yes | No | Yes |
| Benefits | Can lower your taxable income now | Not taxed in retirement, when earnings are lower | High contribution limits |
| Requirements | Must make less than $66,000 if you’re single or $105,000 if you’re married and filing jointly to deduct your full contributions | Must make less than $125,000 if you’re single or $198,000 if you’re married and filing jointly to make the full contribution | Must be self-employed or work for a self-employed person Employees must work for the business at least three of the last five years |
Is a traditional gold IRA worth it?
Traditional gold IRAs can come with serious perks. For one, they’re tax-deductible, which can help you reduce your taxable income now and save more for the future.
They also offer an excellent hedge against inflation, and they’re a great way to diversify your portfolio, too – especially in such a unique and challenging economic time.
Finally, they’re also just a sound investment. The price of gold has increased significantly over the years, and over the long haul, it can be a great way to build wealth.
If you’re considering making a traditional gold IRA a part of your larger retirement plan, then shopping around is your best bet.