What Is a Gold IRA? Complete Beginner's Guide
Quick Answer
A Gold IRA is a self-directed Individual Retirement Account that holds physical gold (and other precious metals) instead of stocks and bonds. It offers the same tax advantages as a traditional or Roth IRA while providing diversification through tangible assets.
In This Guide
How a Gold IRA Works
A Gold IRA functions like any IRA—you contribute money, it grows tax-advantaged, and you withdraw it in retirement. The key difference: instead of holding paper assets, your account holds physical gold coins or bars stored in an IRS-approved depository.
The Key Players
- You: The account holder making investment decisions
- Gold IRA Company: Helps you set up the account and purchase metals (e.g., Augusta, Goldco)
- Custodian: Financial institution that holds your IRA and ensures IRS compliance (e.g., Equity Trust)
- Depository: Secure vault where your physical gold is stored (e.g., Delaware Depository)
The process works like this: You fund your Gold IRA (via rollover or contribution), choose your metals, and the gold is shipped to an IRS-approved depository. You own the gold, but it's stored securely until you take distributions in retirement.
Types of Gold IRAs
Traditional Gold IRA
Contributions may be tax-deductible. Gains grow tax-deferred. Withdrawals taxed as income.
Best for: Those expecting lower tax bracket in retirement
Roth Gold IRA
Contributions with after-tax dollars. Gains and withdrawals completely tax-free.
Best for: Those expecting higher tax bracket in retirement
SEP Gold IRA
For self-employed/small business owners. Higher contribution limits (up to $70,000/year).
Best for: Business owners maximizing retirement savings
What Metals Are Allowed?
The IRS has strict requirements for metals in a Gold IRA. Not all gold qualifies:
✓ IRS-Approved Metals
Gold (99.5% pure)
- • American Gold Eagle coins
- • American Gold Buffalo coins
- • Canadian Gold Maple Leaf
- • Gold bars (.995+ fineness)
Silver (99.9% pure)
- • American Silver Eagle coins
- • Canadian Silver Maple Leaf
- • Austrian Silver Philharmonic
- • Silver bars (.999+ fineness)
Platinum and palladium also allowed with 99.95% purity requirements.
✗ NOT Allowed
- • Collectible or numismatic coins
- • Jewelry
- • South African Krugerrands
- • Any gold under 99.5% purity
- • Gold stored at home (must be in approved depository)
Pros and Cons
Advantages
- ✓ Hedge against inflation
- ✓ Portfolio diversification
- ✓ Tax advantages (deferred or free)
- ✓ Physical ownership of real assets
- ✓ Protection during market crashes
- ✓ Can't be hacked or digitally stolen
Disadvantages
- ✗ Annual fees (storage, custodian)
- ✗ No dividends or passive income
- ✗ Can't store at home
- ✗ Less liquid than stocks
- ✗ Early withdrawal penalties
- ✗ Higher minimum investments
How to Open a Gold IRA
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1
Choose a Gold IRA Company
Research and select a reputable provider (we recommend A+ BBB-rated companies)
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2
Open Your Self-Directed IRA
Complete paperwork to establish your account with a custodian
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3
Fund Your Account
Rollover from existing 401(k)/IRA or make new contributions
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4
Purchase Metals
Select IRS-approved gold products with your representative
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5
Secure Storage
Gold ships to an IRS-approved depository—insured and protected
Costs Involved
Gold IRAs have more fees than traditional IRAs. Typical costs include:
| Fee Type | Typical Range |
|---|---|
| Setup/Account Opening | $0-$50 (often waived) |
| Annual Custodian Fee | $75-$150/year |
| Storage Fee | $100-$200/year |
| Metal Premiums | 3-10% over spot price |
Is a Gold IRA Right for You?
Good Fit If:
- ✓ You want retirement portfolio diversification
- ✓ You're concerned about inflation
- ✓ You have 10+ years until retirement
- ✓ You have $25,000+ to invest
- ✓ You value tangible assets
Not Ideal If:
- ✗ You need quick access to funds
- ✗ You want dividend income
- ✗ You have limited funds
- ✗ You prefer active trading
- ✗ You're already near retirement
Ready to Learn More?
See our rankings of the best Gold IRA companies for 2025, with detailed comparisons of fees, minimums, and service quality.
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