Gold IRA Pros and Cons: Should You Invest?


A gold IRA investment, just like any other investment, has its fair share of risks and benefits. Knowing the pros and cons of gold IRA will help you make a smart and informed investment choice.

Gold IRA Pros and Cons



Portfolio Diversification

No Interest, Yields, or dividends

Combats Inflation

higher fees

Lessens Volatility

Risk of loss

Tax Benefits

limited access


deep learning curve

Pros of Investing in a Gold IRA

1. A Gold IRA Diversifies Your Assets

Given its stability and long-term value, investing in a gold IRA is an excellent diversification strategy which will not only protect your assets from depletion, but will also ensure financial growth and security in the long run.

One of the most crucial aspects in becoming a successful investor is having a diversified portfolio. Spreading out your investments across various assets instead of placing all of them in one basket ensures minimal risk and prevents huge losses.

2. A Gold IRA Fights Inflation

Gold IRAs are reliant on the value of gold, which is a physical precious metal that does not correlate with the value of money. Investing in a gold IRA serves as a good hedge against inflation and other unforeseeable financial circumstances.

Inflation negatively affects regular IRAs, such as a Traditional IRA and a Roth IRA, because of their dependence on assets that rely on the value of money, such as stocks, bonds, and other paper assets.

According to a study conducted by, the US inflation rate is estimated to be around 8.26 percent this year, 3 points higher than last year’s 5.25 percent, and 5 points higher than the long-term average which is plotted at 3.26 percent.

3. A Gold IRA Withstands Volatility

Regular IRAs are subject to volatility, simply because they depend on global markets and economies. Markets can often be unstable because of constant price changes.

A Gold IRA does not respond to irregularities and fluctuations in the global market. Rather, it depends on the value of gold prices alone, making it much more stable than a regular IRA.

4. A Gold IRA Charges Less Tax

Gold IRAs have a variety of tax benefits. Unlike regular IRAs or other retirement plans, gold IRAs are light on taxes.

A traditional gold IRA grows on a tax-deferred basis, which means taxes are charged only when you withdraw your distributions during retirement.

A Roth Gold IRA provides even better tax benefits because it grows on a tax-free basis, which means no taxes will be charged during contributions and even when you withdraw your distributions once you retire.

Savings up for retirement through the use of a gold IRA gives investors a sense of peace by eliminating taxes, penalties, and other additional costs.

5. A Gold IRA Provides Longevity

Long-term, stable assets like gold are especially rewarding when left to flourish until retirement.

Unlike paper assets, liquidating gold can be difficult. Similarly, liquidating a regular IRA can be easier than converting your gold IRA to cash.

But, illiquidity has its own benefits, especially for long-term investors. Holding on to your assets and inevitably allowing them to grow can be beneficial, especially during prolonged periods of time.

Other advantages of investing in a gold IRA:

  • A gold IRA is self-managed: You have full control over your gold IRA from start to finish.
  • A gold IRA does not follow market trends: When economies crash, gold preserves its value and even goes up on certain occasions. (e.g. Great Recession in 2009)
  • A gold IRA has low risk: Unlike paper assets, gold has intrinsic value. Investing in a natural commodity often comes with stability and minimal risk.
  • A gold IRA has low start-up costs: Opening an account costs around $50 to $300.
  • Cons of Investing in a Gold IRA

    1. Gold IRAs Have No Interest, Yields, or Dividends

    Regular IRAs are composed of paper assets which typically generate profit through interest, yields, and dividends. 

    Gold IRAs, however, are reliant on gold price hikes to produce returns. Gold does not create interest, nor does it return any yields or dividends. To put it simply, Gold IRAs are wealth preserving tools, not wealth growing tools.

    2. Gold IRAs Have Higher Fees

    While a gold IRA may have low start-up costs, the fees after opening the account are generally higher. Apart from taxes during contributions or withdrawals, fees include:

    • Storage fees
    • Maintenance Fees
    • Insurance Fees

    On top of that, visits to view your holdings are often expensive.

    3. Gold IRAs Are More Likely to Be Lost

    Any physical object is always prone to be lost, misplaced, or stolen, no matter how careful you are. These circumstances are often caused by human error, but sometimes they’re just ultimately out of our control.

    Insuring your gold is a good way to protect your assets from the risk of being lost. However, insurance usually entails paying a hefty price. 

    4. Gold IRAs Have Limited Access

    Part of investing in a gold IRA is looking for a depository or custodian to store and manage your gold for you. Not only does this incur additional fees, it also limits your access to your holdings.

    Some companies allow scheduled visits to view your assets once you’ve turned them over. However, these visits usually come at a price.

    5. Gold IRAs Require A Deep Understanding on Investing

    Investing in a gold IRA comes with a certain level of skill and expertise that not many investors have.

    A Gold IRA is a self directed IRA, which means you will make all the decisions from beginning to end.

    This may be beneficial to knowledgeable and experienced investors. Amateur investors, however, might find it difficult to manage a self directed fund, especially since it requires a lot of researching, planning, and risk taking.

    Other disadvantages of investing in a gold IRA:

  • A gold IRA has funding restrictions: The IRS has strict guidelines with regards to funding your account, which can sometimes pose issues for first time investors.
  • A gold IRA cannot be easily liquidated: Despite the benefits of holding an investment long term, being able to liquidate your assets at the push of a button is still a convenience most investors look out for.
  • Frequently Asked Questions

    What is an IRA? What does IRA stand for?

    IRA stands for Individual Retirement Account. An IRA is a retirement account that can be opened by any working citizen in the United States.

    IRAs are accounts where individuals deposit and invest money, typically to save up for a comfortable retirement.

    What other IRAs are there?

    Aside from a gold IRA, there are four other IRAs:

    • Traditional IRA: A traditional IRA, unlike a gold IRA, is a retirement account that allows individuals to invest in the global market. They grow money on a tax-deferred basis, which means you only get taxed once you collect your distributions at the start of your retirement.
    • Roth IRA: A Roth IRA, similar to a traditional IRA, is a retirement account which allows individuals to invest in stocks, bonds, and other paper assets. They also allow individuals to collect distributions tax-free, which means you only pay taxes during contributions before retirement.
    • SEP IRA: A SEP IRA is an IRA that allows small business owners to open retirement accounts for their employees. However, only business owners can deposit contributions for their employees.
    • Simple IRA: A Simple IRA functions the same way as a SEP IRA, but both the business owner and the employee/s can make contributions.

    Who is eligible to open an IRA?

    Any individual who is currently employed and has earned income can apply for an IRA. However, it is crucial to be aware of all the guidelines and policies before opening an account.

    Understanding all the necessary regulations before starting a gold IRA investment will save you a lot of time and will prevent you from paying unwanted fines and penalties.

    How long does it take to open a gold IRA?

    Opening an account takes around 10-15 minutes, while setting everything up can be processed in just one business day. Funding, however, depends on how you plan to transfer the money.

    Regular funding usually takes up to five days, while rollovers can take up to ten days to complete.

    What should I do after opening a gold IRA?

    Opening an account typically entails four steps:

    • Choosing the right company: Each company has different fees and services. When choosing a company, it is important to select an institution that perfectly suits your needs and budget.
    • Depositing or transferring money into your account: Regular deposits usually take up to five days, depending on your custodian. Rollovers can take up to ten days.
    • Selecting your physical precious metals: Once your account has been funded, you can start selecting your desired physical precious metals. Apart from gold, you can also choose other physical precious metals such as silver, platinum, and palladium.
    • Hiring a custodian or a depository: After purchasing your assets, you must hire a custodian or a depository to store and manage your physical precious metals for you. Some companies offer custodian services, which eliminates the need to look for a third party custodian, making the entire process slightly easie

    What is the best gold IRA company?

    According to Times Union, the best gold IRA company in 2022 is Goldco. However, there are several other top-notch companies to choose from, each offering different services to individuals all over the country. Some of these are:

    • Advantage Gold Group
    • American Hartford Gold
    • Augusta Precious Metal
    • Birch Gold Group
    • Gold Alliance
    • Noble Gold
    • Oxford Gold Group
    • Patriot Gold Group
    • Regal Assets
    • Delaware Depository

    There are also a handful of distributors that provide physical gold, bullion coins, and other precious metal coins. These include:

    • JM Bullion
    • SD Bullion
    • APMEX

    Researching and looking into each company will help you determine what the best gold IRA company is for you and your hard-earned money.

    Can I transfer my funds from a traditional IRA to a gold IRA?

    Transferring funds from a traditional IRA to a gold IRA is called a gold IRA rollover. A rollover can be performed by anyone who has a traditional IRA and plans to switch over to a gold IRA.

    If I open a gold IRA, will I be able to own physical gold?

    Opening a gold IRA investment means purchasing gold and putting it under your name. However, the IRS does not allow investors to store physical gold in their own residences until they reach the age of 59.5. Anyone who opens a gold IRA must hire a custodian to manage their gold for them.

    If you want to withdraw your assets before the age of 59.5, you can pay a 10% tax penalty to acquire them immediately.

    While some companies allow their clients to store their own gold, there are legal concerns around this practice that often result in costly penalties.

    How much gold can I physically own?

    You can purchase as much gold bullion as you want, as long as there are no laws on gold ownership or storage being violated.

    There is no limit to how much gold a person can own. The IRS does not have any regulations or guidelines in place, neither does the government.

    If I liquidate my gold IRA, can I have it in gold?

    Once you decide to liquidate your gold IRA, you are given the option to have it in cash or in gold.

    You can also withdraw money from your gold IRA account and buy a gold bar, a gold coin, or any other form of gold. However, doing so could lead to income taxes and other penalties.

    Are there other ways to invest in gold aside from gold IRA?

    Apart from a gold IRA, there are several alternatives you can choose from if you still want to make a gold investment:

    • Gold stocks: Gold stocks are a mutual fund which allows individuals to invest in a mining corporation, a gold ETF, or a gold reserve. Investing in gold stocks can be processed through a licensed broker, but you can also invest by yourself.
    • Trading: Just like stocks and bonds, you can trade in gold. Gold assets that are available on the market include gold futures and spot gold.
    • Other precious metals IRA: Fun fact - another term for gold IRA is precious metal IRA. Investing in a gold IRA allows you to invest in other precious metals such as silver IRA, platinum and palladium.

    However, it is essential to keep in mind that the value of physical gold still surpasses the value of these physical precious metals.

    Conclusion: Is Gold IRA Worth It?

    No matter how stable and profitable a gold IRA might be, it will always have a considerable amount of risks. Understanding what gold IRAs are and how they work is extremely essential before opening an account.

    As long as it is properly handled and managed, a gold IRA can ultimately be a smart business move any investor can make.

    About the author 

    Jonathan Uy

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