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Physical Gold IRA

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There's a lot to consider these days when it comes to investing.

  • Inflation is at 40-year highs and the Purchasing power of the US Dollar is rapidly declining.
  • Stock markets have peaked and rolled over. The NASDAQ peaked in November 2021 and both the S&P500 and Dow topped-out in January 2022.
  • Interest rates are rising rapidly, causing Bond prices to fall while also threatening Real Estate values.
  • The US and Europe are heading into recessions which are likely to be deep and prolonged. Corporate earnings are already soft and a recession is going to make business conditions even worse.
  • Geopolitical tensions are rising among the World’s superpowers. With hot spots in Ukraine and Taiwan, the US/NATO could find itself in an outright conflict with both Russia and China at the same time.

With this background of uncertainty investors are turning to physical Gold as a way to protect their Wealth. Significant amounts of Gold are being removed from the COMEX and LBMA warehouses as large investors take personal delivery of the yellow metal. They sense the impending economic crisis and they are moving their money to safe haven assets.

The fact that you are reading this article suggests that you are also concerned about the economic state of the World. If you have tax-advantaged retirement savings, this is an excellent question to be asking right now:

“Can physical Gold be held in an IRA?”

You will be pleased to find that the answer is,

“Yes!”

The IRS has allowed physical Gold in self-directed IRAs since the Taxpayer Relief Act was passed in 1997. You can also hold Silver, Platinum, and Palladium.

With a self-directed Precious metals IRA you can hold Coins and bars produced by government mints and third-party refiners.

Keep reading to learn more or use the table of contents to skip to the topics you are interested in.


Gold IRA vs physical Gold

Investing in a Gold IRA vs physical Gold is a question to consider. With a Gold IRA you can purchase physical Precious metals with your tax-advantaged money but you have to let an IRS-approved Custodian hold the metals. If you want to take personal possession of physical Gold you have to use money that is outside of your Retirement accounts.

Gold IRA Custodian

A Gold IRA is not the ideal way to own Precious metals because of the IRS requirement that a third-party Custodian holds the metal.

While Gold IRA investors enjoy the benefits of accumulating Gold, they don’t get to take personal possession of the metal until after retirement (age 59 ½ for most investors).

Physical Gold investors, in contrast, take personal possession of their metal and store it where it is readily accessible.

While a Precious metals IRA is not the best way to own Gold, it is the ONLY way to own Gold using tax-advantaged funds. 

Unless you are willing to liquidate your Retirement accounts (and pay the subsequent penalties and taxes) your money is essentially stuck inside tax-advantaged vehicles until you retire.

That 'stuck' money needs to be protected and a Precious metals IRA is one way to provide that protection.

Precious metals Portfolio

In my opinion, every Investment Portfolio can benefit from an allocation towards Gold.

My recommendation for clients is to own the physical metal inside their tax-advantaged accounts and, more importantly, to purchase physical Gold outside the financial system using after-tax money.

This two-pronged strategy hedges an Investment Portfolio against Inflation and economic turmoil while also diversifying the Portfolio away from Stocks, Bonds, and Mutual funds.

Computer models demonstrate that the traditional 60/40 Portfolio of Stocks and Bonds performs better throughout all market phases when it is diversified with a 3-10% allocation towards physical Gold.

For clients seeking aggressive growth in their Portfolios I recommend Mining stocks, although these vehicles are not appropriate for all investors due to their risk. 

It is vitally important right now to diversify retirement savings into alternative Investments like Precious metals. The traditional Portfolio of 60% stocks and 40% bonds is actually 100% paper Investments that all have counter-party risk.

In a significant economic setback like the Financial Crisis in 2008 this 60/40 Portfolio is going to suffer losses on both Stocks and Bonds. Physical Gold, on the other hand, has no counter-party risk and shows almost no correlation to either Stock or Bond prices.

For the best overall Gold IRA company go with Augusta Precious Metals if you have $50,000 or more to invest. Augusta shows the strongest commitment to customer education and they also get the best customer reviews. For an Investment of $25,000 to $50,000, Goldco is your best option. Goldco has been helping investors with Gold IRAs for 16 years and they have over 1,000 5-star reviews. Birch Gold Group has a lower minimum Investment so if you are planning to invest between $10,000 and $25,000, Birch is your best option. Birch provides extensive educational resources and gets consistently positive customer reviews.

Benefits of Gold IRA

The main benefit of a Gold IRA is that it gives you a way to own physical Precious metals inside a tax-advantaged Retirement account.

You get the same tax benefits that you enjoy in a traditional IRA but you can hold physical Gold and Silver instead of Stocks and Bonds.

In a Gold IRA you also have the option of distributing and taking possession of your physical metals if you want.

If you take a distribution of physical metal from your IRA you can then do with it as you please (while following all IRS rules, of course).

The metal can be sold at the local Coin or pawn shop as needed, buried in the garden, gifted to the grandkids, or 'lost in a boat accident'.

Preserving and protecting wealth over time is what Gold is all about. The yellow metal is inherently recognized by all humans as something of value.

The price of Gold may vary over the years when it is measured in the fiat currency of the day, but Gold is never worth zero in any currency – ever.

Gold IRAs provide a unique way to enjoy the Wealth preservation aspects of physical Precious metals along with the tax benefits of a tax-advantaged retirement plan. 

Gold IRA tax rules

Knowing the Gold IRA tax rules will help you understand how a tax-advantaged Investment in physical Gold works:

  • Coins and bars of Silver, Gold, Platinum, and Palladium are allowed
  • Metal must be at least Bullion quality (99.5% pure)
  • Metal must be produced by IRS-approved government and third-party mints
  • Distributions from a Gold IRA can be taken as cash or physical metal
  • Distributions are treated as ordinary income at your current tax rate when you take the distribution
  • Precious metals held inside an IRA are NOT subject to the 28% tax rate for collectibles

Gold IRAs are subject to the same age restrictions as traditional IRAs. You can begin taking distributions at age 59 ½ and must begin taking minimum distributions at age 72.

What is a Gold IRA?

These important facts relate to what is a Gold IRA and how it interacts with other Investment accounts.

  • You may have more than one IRA account open at any given time
  • Opening a Gold IRA has no affect on existing Retirement accounts
  • The IRS allows you to move funds from one tax-advantaged account to another without penalty
  • Only one rollover or transfer of funds is allowed in a single tax year

The bottom-line is that Gold IRA investors can move some or all of their existing retirement savings into physical Gold without paying any taxes or penalties in the process.

Most Retirement accounts are eligible for a rollover or transfer into a physical Gold IRA. 

Whether you have a traditional IRA, an eligible 401(k)*, or a TSP, 457, 403b, Pension, Annuity, etc., it can probably be moved into a Gold IRA.

* An “eligible 401(k)” is a Retirement account setup with a previous employer. Currently active 401(k) accounts are not eligible for rollover or transfer.

Gold IRA pros and cons

Gold IRAs have pros and cons, just like all other Investments.

As mentioned above, purchasing physical Gold and Silver with after-tax money and taking personal possession is ideal.

Precious metals IRAs, while not ideal, are the only way to purchase Silver and Gold using tax-advantaged retirement savings.

Pros
  • Provides a way for you to purchase physical Precious metals using tax-advantaged Retirement accounts
  • Diversifies a traditional Investment Portfolio of Stocks, Mutual funds, and Bonds.
  • Hedges against Inflation, which is currently higher than we have experienced for 40 years.
  • Distributions can be taken as physical metal or cash.
  • Accrued capital gains get taxed as regular income instead of the normal 28% tax rate for Collectibles.
Cons
  • You are not allowed to move Gold that you already own into the IRA. The IRS requires that the metal in the IRA is purchased within the account.
  • You have to pay fees for buying and selling your IRA metals.
  • You have to pay fees for secure storage of your IRA metals.

Home storage Gold IRA

One of the IRS requirements for Gold IRAs is that a third-party Custodian holds the physical metal in the account.

There are articles floating around the internet suggesting that you can create an LLC to act as this third-party Custodian.

Andrew McNulty et al. vs Commissioner

US Tax Court ruling

In this scenario the Custodian (the LLC) would store the IRA Gold in a safe in your home.

This setup is usually referred to as a home storage Gold IRA.

The IRS has advised against this strategy for years stating that investors cannot do indirectly what they are not allowed to do directly. In other words, an investor-controlled LLC is not a valid Custodian.

In November, 2021 a US Tax Court ruled that home storage is not allowed in self-directed IRAs (Andrew McNulty et al. v. Commissioner). As a result of this ruling the IRS imposed more than $300,000 in tax assessments and penalties on the McNulty's.

The Tax Court, in an opinion issued after the ruling, described home storage Gold IRAs as a “questionable internet scheme” that would be ripe for abuse if they were allowed.

What is a Gold IRA rollover

You are allowed to move money from one Retirement account to another and this change does not trigger any IRS penalties or taxes. These events are referred to as "rollovers" or “transfers”.

Gold IRA rollover

In a physical Gold IRA rollover you use tax-advantaged savings from your existing Retirement account to purchase physical Gold and other Precious metals inside a self-directed IRA.

There are no taxes or penalties for performing a Gold IRA rollover because your funds simply move from one IRS-approved Trustee to another.

Gold IRA transfer

In a Gold IRA transfer you take a distribution from your existing Retirement account and then deposit that money, or some portion of that money, into a Gold IRA account.

The IRS requires that the transfer be completed within 60 days. Any funds that are not deposited into an IRS-approved account after 60 days will be treated as a distribution. If you are under age 59 ½ you will pay a 10% early withdrawal fee on the distributed funds.

Gold IRA rollovers and transfers can be performed on all of these Retirement account types:

  • eligible 401(k)*
  • IRA
  • 403b
  • 457
  • TSP
  • Roth IRA
  • Annuities
  • Pensions

* An “eligible” 401(k) means the account was created at a previous employer, not a current employer. A currently active 401(k) is not eligible for a Gold IRA rollover.

One of the primary benefits of a Gold IRA rollover or transfer is the diversification it provides for a traditional Investment Portfolio consisting of nothing but Stocks, Mutual funds, and Bonds. Computer studies show that the Portfolio will perform better throughout all phases of the market cycle if it is diversified with a 3-to-10% allocation of Gold.

With a rollover or transfer you gain the benefit of owning physical Gold without adding any new funds to your overall Investment Portfolio. If you have new funds to add to your Portfolio you can still open a Gold IRA but you will be limited to the maximum annual contribution amount ($6,500 in 2023 or $7,500 if you are over 50).

Gold IRA fees

There are Gold IRA fees that don’t exist in a regular IRA holding only Stocks, Bonds, and Mutual funds. These extra fees occur because we are dealing with physical assets instead of paper assets.

The first fee is paid to the Broker (usually the Gold IRA company) who buys the physical metal that will be held in the Gold IRA account. This Broker fee is a standard part of operating in the physical Precious metals markets, it is not unique to Gold IRAs.

The second fee covers the cost to securely store the account’s Precious metals. You pay this storage fee to ensure that your metal is stored in a secure location with adequate insurance, regular audits, guards, etc.

When it is time to take a distribution after age 59 ½ you have two choices with a Gold IRA. Distributions can be taken as cash or physical metal. If you convert the physical metal back to cash you will pay another Broker fee to sell the metal. This fee can be avoided by taking a distribution of your physical Precious metals instead of cash.

Gold IRA reviews

Investors face a challenging task when it comes to picking a Gold IRA company to work with. There are lots of these companies and they all claim to be the best.

Online Gold IRA reviews are a good way to research the wide array of choices. Customer reviews can be found at the sites listed below. Ideally, most of the reviews for a candidate company will be positive and the company will be actively working to resolve any negative reviews or complaints.

I prefer to stick with BBB and TrustPilot because these companies screen their reviews to ensure that they are legitimate. Everything is for sale these days including positive customer reviews. The BBB says they only publish 62% of received reviews because the other 38% can't be verified.

  • Better Business Bureau (BBB)
  • Consumer Affairs 
  • TrustLink 
  • Trustpilot

Negative reviews about a company can be particularly informative. These negative reviews demonstrate how a Gold IRA company works (or doesn’t work) to support their clients and keep them happy. There is nothing wrong with a negative review as long as the company is working to resolve the issue.

After researching numerous Gold IRA companies I have found that most of the negative Gold IRA reviews are related to purchasing proof Coins and subsequently losing money when the Coins were sold. There’s an easy way that you can avoid this potential problem:

Don’t buy proof Coins!

Always purchase the greatest amount of metal possible for the least amount of money. That means choosing Bullion bars and Coins over proof or special edition Coins. If you stay away from these overpriced Coins most of the negative Gold IRA reviews become irrelevant.

When you are ready to purchase metal for your IRA, ask the company representative which products have the lowest premium over the cost of the metal they contain. This will usually be bars, not Coins. Stick with these low premium items and remember you are investing in Precious metals, not artwork or collectible Coins.

Augusta Precious Metals stands out from the other Gold IRA companies because it has zero customer complaints on BBB while the other companies have at least one. Most of Augusta's BBB reviews talk about how the company was patient and provided education until the investor was able to make an informed decision about investing in Precious metals.

Goldco is unique because of the sheer number of reviews it has received over its 16 year history. These reviews are mostly positive and often mention the professional nature of the Goldco representatives. Goldco has received a few negative reviews and customer complaints involving proof and special edition Coins. This issue can occur with any of the Gold IRA companies and it is easy to avoid by NOT buying proof or special edition Coins.

Best Gold IRA

Using the word “best” in an internet search attracts affiliate marketers and lead generators the way that blood in the water attracts sharks.

These internet marketers publish “reviews” about the “Best Gold IRA” companies yet most of them don’t have a clue about either Precious metals or investing. To them, a Gold IRA is just another product to sell.

Instead of starting with a search for the “best” Gold IRA, it is better to start by determining what criteria will be used to select the best Gold IRA company.

There are several ‘must haves’ for candidate companies to be on the best Gold IRA list:

  • The company must be listed with the Better Business Bureau (BBB) and have an A+ rating. If there any unresolved negative reviews it should be obvious that the company is working to resolve them. Having negative reviews is not a bad thing – not every customer is going to be happy, regardless of what the product is – what matters is the company working with these unsatisfied clients and attempting to satisfy them.
  • The company must have an insured depository. Some of the better-known depositories brag about having a billion Dollars worth of insurance or being insured by Brinks.
  • Physical metal must be stored in segregated (allocated) accounts. Pooled (unallocated) accounts are not acceptable. Never invest in a pooled Precious metals vehicle whether it is an IRA or some kind of certificate program.
  • The company must perform regular audits of the metal in the depository.

In addition to the must-haves investors can filter Gold IRA companies based on these criteria:

  • Years in business. Fly-by-night companies don’t survive for 10 years.
  • Transaction fees (Broker fees to buy and sell metal).
  • Storage fees.
  • Management and Custodian fees.
  • Location of the Depository. Most investors prefer to have their metals stored nearby.

The best Gold IRA is the one that you feel comfortable with based on your unique Investment objectives and tolerance for risk. The criteria listed above will help you narrow the wide field of candidate companies to choose from.

Some Investors will choose their “best Gold IRA” based on positive customer reviews or the location of the depository, while other Investors might give the ‘best’ designation to the candidate offering the most valuable promotional offer.

Gold IRA companies

The mini-reviews below provide a starting point as you research the available Gold IRA companies. 

Visit Website

Fidelity

No proof or special edition Coins offered

BBB rating:

Years in business: 

Minimum Investment:

C-

76

$1,000

Although Fidelity has a low BBB rating, the company has a very low minimum Investment level which makes it easy to start and add to a Gold IRA. Fidelity is also very conservative in its approach to Precious metals, warning investors about the volatility and risk of this asset class. What we like best about Fidelity is that the company does not sell proof or special edition Coins so there is zero risk of investors purchasing these overpriced products.

Get your FREE Information Kit

Birch Gold Group

Extensive educational resources

BBB rating:

Years in business: 

Minimum Investment:

A+

19

$10,000

Birch Gold Group has extensive educational resources on their website which indicates that the company is serious about educating Precious metals investors, not just pushing them into a Gold IRA. One of the unique resources is a Portfolio calculator that shows you how the traditional 60/40 Portfolio of Stocks and Bonds performs when it has a small allocation towards Gold. Birch waives first year fees for investors depositing $50,000 or more.

Get your FREE Gold IRA Guide

Goldco

Excellent Customer Support

BBB rating:

Years in business: 

Minimum Investment:

A+

16

$25,000

Goldco has been helping investors move their tax-advantaged retirement savings into the security of Precious metals for 16 years. More than 1,000 of those customers have given the company 5-star reviews and Goldco is also highly rated by BBB, Business Consumer Alliance, and TrustPilot. Goldco provides educational resources on their website and has more in-depth materials available via email after you speak with one of their Precious metals specialists. When new clients invest $100,000 or more with Goldco they will receive $10,00 or more in free Silver.

Get your FREE Gold IRA Guide

Augusta Precious Metals

Exceptional focus on education

BBB rating:

Years in business: 

Minimum Investment:

A+

10

$50,000

Augusta Precious Metals offers more educational resources on their website than any other Gold IRA company. Current topics affecting your retirement savings are covered in the regularly updated video library and you will also find a series of videos on basic economics. Augusta's blog regularly publishes articles addressing current economic matters. The Inflation and Retirement calculator shows you how Inflation will affect your retirement lifestyle. Investors with $100,000 or more to invest can schedule a 15-minute 1-on-1 teleconference with Devlyn Steele, Augusta's director of education. Augusta Precious Metals is clearly committed to helping you understand Precious metals and how you can benefit from a Gold IRA Investment.

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Patriot Gold Group

Fast IRA setup

BBB rating:

Years in business: 

Minimum Investment:

A+

6

$15,000

Patriot Gold Group is one of the newer Gold IRA companies but they are highly rated by BBB and TrustPilot. Patriot Gold differentiates itself from other Gold IRA companies in two ways. First, they will setup your Gold IRA within 24 hours so you can quickly initiate the rollover or transfer process with your existing Retirement account. Second, they offer a 'no fees for life'  IRA for investors with $250,000 or more to invest.

Visit Website

Noble Gold

Excellent educational materials

BBB rating:

Years in business: 

Minimum Investment:

A+

5

$2,000

Noble Gold is a relatively new Gold IRA company but they offer a wealth of educational material on their website and they are highly rated by BBB, Business Consumer Alliance, and Trustlink. With a low minimum Investment level Noble Gold makes it easy for anyone to add Precious metals to their retirement savings plan. Texans will appreciate the Noble Gold IRA because they can store their Precious metals in either Dallas or Delaware.

Precious metals IRA company

Fidelity

  • Founded: 1946
  • BBB rating: C-
  • Proof Coins: No
  • Minimum Investment: $1,000

Patriot Gold Group

  • Founded: 1990
  • BBB rating: A+
  • Proof Coins: Yes
  • Minimum Investment: $15,000

Birch Gold

  • Founded: 2003
  • BBB rating: A+
  • Proof Coins: Yes
  • Minimum Investment: $10,000

Goldco

  • Founded: 2006
  • BBB rating: A+
  • Proof Coins: Yes
  • Minimum Investment: $25,000

Regal Assets

  • Founded: 2010
  • BBB rating: unrated
  • Proof Coins: Yes
  • Minimum Investment: $10,000

Noble Gold

  • Founded: 2017
  • BBB rating: A-
  • Proof Coins: Yes
  • Minimum Investment: $2,000
free Gold Investing kit

Conclusions

With the current economic environment and World geopolitical situation, holding physical Precious metals is more important than ever.

The typical Investment Portfolio of Stocks, Bonds, and Mutual funds is facing several headwinds that could dramatically decrease the value of those assets. Real Estate is also at risk. On top of rising interest rates, declining business earnings, and raging Inflation we have an impending recession and the US Federal Reserve tightening liquidity.

Moving 3% to 10% of your overall Investment Portfolio into physical Gold and Silver lets you diversify away from traditional assets while creating a hedge against Inflation and market turmoil.

You can perform a rollover or transfer of your existing Retirement account and protect your hard-earned savings with physical Gold today. This move can be accomplished without paying any taxes or penalties.

If you have questions about a physical Gold IRA reach out to me at bryan@satoritraders.com. I can't give you financial advice but I will do my best to answer your questions. You can also reach out to any of the Gold IRA companies. They have Precious metals specialists available to answer your questions.

About Satori Traders

Hi, my name is Bryan Post and I love the shiny stuff - Silver and Gold.

I've been investing in the Precious metals and mining stocks since 2002 when I realized that Gold is the only real money on the planet.

Here on SatoriTraders.com I share everything I've learned about the metals, Financials markets, trading, Technical analysis, and the numerous games that central banks play with fiat currencies.

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