Buying Gold IRAs

Buying gold for an IRA offers another way to purchase this historically valuable precious metal. You can diversify your retirement savings beyond traditional assets like stocks and bonds with a gold IRA.

How Do You Buy Gold in an IRA?

Learning how to buy gold in  an individual retirement account, or IRA, can help you diversify your retirement savings. It’s one way to hedge against inflation or economic downturns.

You can hold gold in an IRA in a few different forms:

Coins also come in a few different forms, including:

Restrictions for Gold Held in a Gold IRA

It wasn’t always possible to own gold in an IRA. The Taxpayer Relief Act of 1997 changed that, opening self-directed IRAs (or SDIRAs) to alternative assets such as precious metals. However, the act also put restrictions on the types of pieces you could hold in these accounts [1].

Certain criteria apply to allow gold in an IRA. Bars or coins must meet IRS standards for fineness. The gold must also be held by the IRA trustee and not the IRA holder, and it must be kept in a depository that’s approved by the IRS [2].

Gold coins or rounds must be at least 99.5%, or .995, pure to be held in an IRA. The American Gold Eagle is the exception, as you can have this type of coin in your account even though it is around 92% pure. Foreign minted coins that meet the minimum for fineness are accepted for these accounts.

What Is a Self-Directed IRA?

A SDIRA is a type of retirement account. With this type of account, the holder of the account gets to make investment decisions such as where to invest and how much to invest. You have more control over investment decisions if you have a SDIRA instead of a conventional IRA. A SDIRA provides flexibility in terms of investments, allowing you to invest in things other than the most common assets like CDs, mutual funds, stocks and bonds [3].

Steps to Buying Gold for an IRA

You will typically need to take a few steps when buying gold for an IRA:

  • Set up an account with a custodian: A custodian is the financial institution responsible for storing assets you have in your account. In the case of a gold IRA, the custodian will hold paperwork for the account, but an approved depository will store the physical gold. The IRS requires custodians to manage all retirement plans to maintain tax-deferred status [4]. Custodians can be [2]:
    1. Banks
    2. Brokerage firms
    3. Credit unions
    4. Savings and loan associations
    5. Trust companies
  • Move funds from an existing account: As with other conventional IRAs, you can transfer funds from a retirement account into a gold IRA without paying tax penalties. You can roll over the following types of accounts into gold IRAs:
    • SEP IRA
    • SIMPLE IRA
    • Roth IRA
    • Traditional IRA
    • Eligible 401(k), 403(b), 457, TSP, etc.
  • Select the precious metal: In addition to gold, you can have a precious metal IRA such as palladium, platinum and silver. Gold ranks high in popularity in terms of precious metal IRAs thanks to its extensive history of maintaining value.
  • Buy your gold: Once you have your account set up, you can purchase the gold for it. The investor is responsible for selecting metal dealers for the metal that goes into their IRA, although established custodians may have lists of dealers they work with that they can share with you.
  • Store your gold: You will need to keep your gold in a safe and secure an approved depository.

What Are the Pros of Buying Gold in an IRA?

Buying gold in an IRA has several advantages, including the following.

Control Over the Future

Gold provides control over the holder’s financial future and retirement. Because gold has a historical track record, it does not fluctuate in value due to inflation. In fact, gold keeps pace with or even outperforms inflation rates over the long term.

While physical gold also safeguards finances in terms of inflation, it can get complicated to keep gold at home. You will either need to install a floor or wall safe at home, or you will need to open and pay for a safe deposit box at the bank.

Gold IRAs avoid this problem while still giving you gold that helps to control your future.

A Powerful Hedge for a Retirement Portfolio

Many financial advisors advise people to keep retirement assets in a combination of bonds and stocks, or possibly mutual funds. The result is a portfolio exposed to just two asset classes. Further, those two assets are highly correlated.

Gold, on the other hand, provides a highly uncorrelated asset class. Gold doesn’t typically decline with bonds or stocks, and it’s different enough that it offers a real hedge against those main asset classes. Unlike stocks and bonds, gold is a physical asset that holds intrinsic value.

Insurance for Disasters

Gold in an IRA protects your portfolio assets and, by extension, your financial future against unforeseen dangers. Much like fire or disease for which you buy insurance, there are just some things you cannot accurately predict when it comes to finances. A gold IRA can help protect you from geopolitical and financial dangers, including the following:

  • Government spending and debt
  • Inflation
  • Market uncertainty
  • Political instability
  • Systemic collapse or financial collapse

Gold is the only asset class or investment that can protect against all of these possibilities thanks to the historical and intrinsic value gold holds [5].

A Balanced Approach to a Portfolio

While the price of gold can change like any other asset, it offers a balance when invested with other assets. If you balance both paper-based investments and gold, a loss on one will be balanced by the other. Gold prices tend to move in the opposite direction of assets that are paper-based. If the price of gold does decrease, your other assets will often experience gains [2].

Gold IRAs allow you to diversify your retirement savings by owning this valuable metal.


1. Congress. ‘Taxpayer Relief Act of 1997,’ https://www.congress.gov/105/plaws/publ34/PLAW-105publ34.pdf. Accessed September 21, 2020.

2. Investopedia. ‘Should You Get a Gold IRA?,’ http://investopedia.com/articles/personal-finance/091814/analysis-should-you-get-gold-ira.asp. Accessed September 21, 2020.

3. U.S. News. ‘A Guide to Self-Directed IRAs,’ https://money.usnews.com/money/retirement/iras/articles/a-guide-to-self-directed-iras. Accessed September 21, 2020.

4. IRS. ‘Approved Nonbank Trustees and Custodians,’ https://www.irs.gov/retirement-plans/approved-nonbank-trustees-and-custodians. Accessed September 21, 2020.