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How to buy gold in an IRA

A gold IRA can help investors by acting as a hedge against inflation. Getty Images/iStockphoto

With inflation high, a recession possible and several recent bank closures, many Americans are taking this time to reassess their finances — and their financial priorities.

For some, that includes reevaluating their investments or, in many cases, even changing their investment strategy entirely.

If you're one of these consumers, you may consider investing in gold — a precious metal long considered a safe haven for cash, particularly in inflationary times. One popular way is to invest in gold via an individual retirement account (IRA). Below we will break down two ways you can go about it.

If you're thinking of investing in gold then start by requesting a free gold IRA kit to learn more.

How to buy gold in an IRA

Here are two ways you can put gold into an IRA.

1. Open a self-directed gold IRA

A self-directed IRA, often called a gold IRA, is a type of individual retirement account that lets you invest in certain precious metals, real estate and other alternative assets. Other types of IRAs do not allow for these types of investments.

To use one of these accounts to purchase gold, you'll first need to find a custodian — a bank, brokerage, or other financial institution that's approved by the IRS to manage gold IRAs. You can then open your account and fund it, either with cash or a transfer from another qualifying retirement plan. 

Keep in mind that there are limits to how much you can put in an IRA, self-directed or otherwise. This year, it's $6,500 for most people or $7,500 for those 50 and older, according to the IRS. 

Once you have your account open and funded, you'll need to find a precious metals dealer and choose which gold bullion, bars, or coins you want to purchase. Just make sure they meet IRS standards, or otherwise, they count as "collectibles," which are prohibited by the IRS. In this case, purchasing these items would count as distributions — meaning they could come with a 10% penalty if you're under age 59.5. 

After you've picked which approved metals you want to buy, you can direct your custodian to purchase them on your behalf. They'll then need to store the gold in an IRS-approved depository for safekeeping. You're not allowed to purchase the metals yourself or store them at home (this is also prohibited by the IRS). If you do opt for a gold IRA, choose your custodian wisely. According to the Securities and Exchange Commission, these accounts can often come with a risk of fraud. 

Learn more about your gold IRA options by requesting a free information kit now or use the table below to compare some top gold investing companies on the market.

2. Use your existing IRA to invest in gold securities 

If you have an existing IRA — a traditional or Roth one, for example — you can use that to invest in gold, too. 

While you can't purchase physical gold (only self-directed IRAs allow for that), you can put your IRA funds into other types of gold investments, like gold-focused mutual funds, gold futures, gold ETFs or gold stocks. You can even invest in gold mining companies. 

This approach can be a smart choice if you don't want to go through the hassle of purchasing physical gold or opening a new account but still want the diversity and safe haven that gold has to offer — especially in challenging economic times

Considering gold?

Gold can often be a smart way to protect your money's value over the long haul. Still, it's not right for everyone. If you're not sure whether gold investing — or any other type of investment — is a good fit for you, consider talking to a financial advisor or tax professional. They can help you make the right decision for your budget and goals. Learn more about this unique investment opportunity by requesting a free gold IRA kit now.

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