Is Gold IRA Safe? Here’s What The Experts Say!


Is gold IRA safe? Gold IRAs are one of the safest retirement investments that can act as a hedge against inflation. The value of gold will never reach “0”, and its price tends to increase when the cost-of-living increases. Furthermore, gold, silver and other precious metals tend to increase their value in times of economic crisis. If you’re having a hard time to find the perfect Gold IRA company to trust with your investment account, here’s what experts say:

Gold IRA as a Hedge Against Inflation

The Covid-19 pandemic from the beginning of 2020 is one good example of an unexpected economic crisis. In times like this, people often seek investments that retain their asset’s value. According to new research from the world gold council according to Forbes, during the pandemic in 2020, global investment demand for gold reached a ground-breaking record of 1,773 metric tons last year with a 40% increase from the previous year. These gold investments include exchange-traded funds that contain solid bullion such as the SPDR Gold Shares GLD and physical bars and coins.

Fig. 1. 2022 Inflation rate of the United States of America from January 2021 to July 2022

The main reason for the increased inflation rate is because of the cost of energy. The inflation rate remains a major problem in the US economy according to the director of the Hutchins Center on Fiscal and Monetary Policy.

According to Wendy Edelberg, director of the Hamilton Project, core goods also hold a major impact on US inflation. Exactly two-thirds of the increase in inflation in the last six months is because of goods resulting in an “off-the-chart” surge in consumer demand and lagging supply, both resulting because of the pandemic and lagging supply. Because of this data, many investors purchase assets that can survive any economic problems, and gold is one of their top choices.

Can Investing in Gold Make You Rich?

Definitely yes, gold investments can make you rich, since they are a hedge for inflation and economic mishaps. Investing in gold for your retirement portfolio diversifies your account. And gold tends to increase in value whenever there are economic downturns. This results in superior returns on your end.

Robert Kiyosaki, the founder of Rich Dad Global LLC, refers to gold and other precious metals as “God’s Money” that every investor must have to secure their retirement funds against instances of inflation which are relative and timely.


What is a Gold IRA?

A Gold IRA is a type of specialized individual retirement account that authorizes investors to hold or invest in gold bullions, gold coins, silver bullions, silver coins, platinum, palladium and other IRS approved precious metals.

How Do Gold Backed IRAs Work?

Gold Backed IRAs work like any retirement savings account with an additional benefit of being able to control your investments and include IRS approved physical gold, silver, platinum and palladium.

How is Gold IRA Taxed?

Typically, the IRS considers gold as collectibles and is therefore taxed similarly. Long-term gains on gold are subject to 28% tax rate. But for gold IRA investments, taxes depend on what type of gold IRA investment you have.

Most gold IRA investments are offered by traditional IRAs compared to Roth IRAs because it offers better returns after taxes. For a traditional IRA, you will be taxed when you cash out your investments. This will include paying a 10% fee if you withdraw below 59 and a half years of age. With gold IRA investments, you will be subjected to a 28% marginal tax rate if you fall under a high-income tax bracket.

What is The Most Tax Efficient Way To Invest in Gold?

The most tax-efficient way you can invest in gold is through Gold Exchange-Traded Funds or ETFs. This investment type has been opted by many small investors due to its tax benefits. Gold ETFs are mutual funds that are traded like a stock of a company. They are intended to allow investors to participate in the gold market industry without actually physically handling gold assets.

An investor must hold gold ETFs for at least 36 months to qualify for a 20% capital gains tax. Although the subject tax will be less than 20% because the government has permitted indexation benefits which adjust the cost of purchase for the impact of inflation, reducing capital gains and net tax. In addition, unlike physical gold, gold ETFs do not attract wealth tax.

What Does it Mean When Gold Is IRA Eligible?

IRA eligible gold is simply any gold or other precious metals that meet the IRS standards. When investing in gold IRAs, the Internal Revenue Service will not accept any physical precious metals without meeting their standards. For gold to be IRA eligible, here are the following requirements it must posses:

  • Coins should have at least a 95% purity and should be encapsulated in mint condition with a certificate of authenticity. Furthermore, the coins must be in brilliant and uncirculated condition.
  • For bullion bars, it should be manufactured by a certified or accredited source or a national government mint that follows the fineness requirements. For small gold bars, it must be manufactured to its exact weight specifications.

Examples of IRA approved gold and precious metals provided by the U.S Mint:

  • American Gold Eagle Coins
  • American Silver Eagle Coins
  • American Gold Bullion
  • American Gold Buffalo

How Much Can You Put in a Gold IRA?

Most IRA advisors recommend investors to invest in gold no more than 10% of their retirement portfolio. The amount you can invest into your gold IRA account for 2023 is $6,500. If the investor is above 50 years old, they can contribute an additional $1,000 to their account. These limits are for Traditional and Roth IRA investments.

How Do You Open a Gold IRA Account?

The first step you need to do when investing in a Gold IRA account is to choose the Gold IRA company you want to partner with. These companies will assist in successfully opening your IRA. Here are some of the best Gold IRA companies recommended by experts and customer reviews:

  • Birch Gold Group
  • American Hartford Gold
  • Regal Asset
  • Augusta Precious Metals
  • Noble Gold
  • Oxford Gold Group
  • Patriot Gold Group
  • Advantage Gold

After choosing your preferred company, the custodian will assist you with some paperwork's that you need to comply with to open your gold IRA account. You will need the following IDs: Driver’s License and other state-issued I.D. After complying with the necessary requirements, your IRA custodian will suggest gold and other precious metals you can invest in to fund your gold IRA. You can fund your gold IRA through cash contributions, gold IRA rollover, or transfers.

Can You Transfer Your 401 (K) to a Gold IRA?

Yes, the process of transferring your 401 (k) funds to a gold IRA account is called a “gold IRA rollover.” The easiest way to transfer your 401(k) funds to a new gold IRA account is through a direct rollover. This process includes contacting your 401 (k) financial advisor and instruct them to transfer the amount of funds that you want to invest in your gold IRA. The gold IRA custodian assigned to create your account will provide you the necessary information to give your 401 (k) financial advisor to initiate the fund transfer.

What are the Fees Associated With a Gold IRA Kit?

The fees associated with a gold IRA kit include a setup and administration fee that can range approximately $50, coin markups and commissions with an estimate of $40 depending on the administration, annual maintenance fees that ranges around $75, storage fees that can range from $50 to $300 (depending on the depository) and miscellaneous fees for wire transfers that can cost around $20.

Can You Store Gold IRA at Home?

Although you can buy physical gold and store it at a secured vault in your home, the IRS does not permit this if your physical gold, silver or other precious metals are purchased through a self-directed IRA account.

Where is The Best Place to Store Your Gold?

The best place to store your gold and other precious metals is in an IRS approved gold depository. Although the idea of storing gold at home is convenient, it can pose a loss and safety risk, especially if you’re handling more than three gold bullion bars. Storing your gold assets in an approved depository provides you the assurance that your physical precious metals are well taken care of and are far from any potential losses, such as theft.

Is Gold IRA FDIC Insured?

Yes, gold IRAs are insured by the Federal Deposit Insurance Corporation (FDIC). Also, the FDIC holds assets in highly secured domestic depositories. Every gold asset must be kept in an IRS-approved depository, and gold IRA providers are assigned to monitor and take care of your storage and any concerns on your behalf.

Has Gold Been a Good Investment Over The Long Term?

Yes, throughout the years, gold has proven to be a durable store of value against inflation. Harry Turner, founder of the Sovereign Investor in an interview with CBS News, stated that “unlike paper money, or other investment types, gold is a physical asset that can be stored and traded. As long as investors take it as a valuable commodity, the price of gold is likely to remain a good hedge against inflation.” If you’re thinking of safe long-term investment, adding physical gold or other precious metals in your IRA account is not a bad idea.

About the author 

Rosebel Lacastesantos

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