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How to invest in a gold IRA

To invest in a gold IRA, you can open a self-directed IRA that meets the requirements to invest in physical gold bullion via a precious metals dealer. Getty Images/iStockphoto

As part of setting your goals for 2023, you might decide to make some financial changes. From adjusting your spending vs. saving habits to reviewing your risk management, there are lots of areas to explore. 

One area you might look into is retirement planning, and in doing so, you might decide you want to invest in gold within your retirement portfolio. However, not all retirement accounts allow you to invest in physical gold bullion. Instead, you might invest in assets like gold ETFs or stocks of precious metals mining companies.

But if you do want to make a physical gold purchase within a retirement account, you can do so via what's often called a gold IRA. A gold IRA is a self-directed individual retirement account (IRA) that follows certain IRS rules so that you can invest in physical gold bullion through this account.

If you think you could benefit from this option then start by requesting a free wealth protection kit to learn more.

How to invest in a gold IRA

Here, we'll take a closer look at how to invest in a gold IRA and what that means.

How you can get started

In some ways, investing in a gold IRA is like investing through a regular IRA. As long as you meet eligibility requirements to invest in a traditional IRA, you can generally open a gold IRA. That means finding a self-directed IRA custodian that you can then fund and make investments through.

If you buy gold, buy silver, or buy other types of precious metals within an eligible IRA, you can generally do so via a precious metals dealer. The process can also involve choosing your depository to hold the physical gold, silver, or other precious metals.

That said, the order of these steps and the relationships of the different parties can sometimes seem blurry. You might search online for a precious metals dealer, for example, and find one you like who then has existing relationships with custodians and depositories to simplify the process. That dealer might then walk you through opening your gold IRA, funding it, and making your investment selections. 

You can learn more about investing in a gold IRA with Goldco or use the table below to review some top gold investing companies.

How much should you invest in a gold IRA?

Gold IRA investments can vary from person to person, depending on factors like their preferred risk levels, age, retirement income needs, etc. In terms of limits, the upper bound is based on IRS rules for maximum annual IRA contributions.

For 2023, the annual contribution limit for an IRA is $6,500, plus $1,000 in catch-up contributions for those ages 50 and up. That limit applies across all accounts, so if you have a gold IRA and regular IRA where you invest in stocks and bonds, for instance, then your total combined contributions still could not exceed that limit.

So, you might split your contributions across different IRAs, or you might put the full amount into one IRA one year and then fund a different IRA in subsequent years. It's hard to say what's right for everyone, but, you may want to keep diversification in mind.

"If someone wanted to further diversify their portfolio into gold and other precious metals, it's important to not put all your eggs in one basket," says Andre Jean-Pierre, Senior Wealth Advisor and Managing Director at Aces Advisors.

His firm's view is "that all alternative investments added together, including gold IRAs, should be closely monitored, and should not comprise of more than 10% of your overall portfolio." That way, he says, you're not "totally dependent on any one sector's success to maintain a healthy and stable investment portfolio."

Who can benefit from investing in a gold IRA?

Figuring out who can benefit from gold IRA investments can be somewhat subjective, but one reason you might do so is if you want to spread your retirement investments across different asset classes.

"Gold has long been seen as an asset to diversify one's wealth that has been around for most of documented human history," says Jean-Pierre.

While some people might look for that diversification within a regular IRA, such as by investing in gold ETFs, others feel more comfortable investing in physical gold through a gold IRA.

As Jean-Pierre explains, owning physical gold is somewhat like owning real estate that has your name on the deed, whereas an ETF is somewhat like pooling your money with other real estate investors to own property via a real estate investment trust (REIT).

"Both provide ownership, however, there is a greater amount of control with individual ownership," he adds.

That said, not everyone benefits from owning physical gold via a gold IRA. For one, owning a gold ETF can be more convenient, notes Jean-Pierre. You don't have to deal with things like choosing a depository, and if you can keep all of your assets in a traditional IRA, you might avoid additional fees that can come with opening and maintaining a gold IRA.

And choosing whether to even pursue a gold investment strategy in the first place can depend on several factors. Some senior citizens, for example, might see gold as a good store of money in retirement. Meanwhile, younger investors might want the potential for higher long-term returns and additional benefits like dividends via the stock market. 

That being said, there are no guarantees as to how these assets will perform. Start by doing your research with a free wealth protection kit from Goldco.

The bottom line

Overall, investing in a gold IRA can be a relatively straightforward process. If you want to diversify your retirement portfolio by holding physical gold via a depository, you might decide to open a gold IRA and choose a precious metals dealer. See what different providers offer, such as in terms of fees and investment options to determine if you want to move forward with opening a gold IRA.

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