A Gold IRA is a specialized type of individual retirement account that allows investors to own physical precious metals—chiefly gold, but also silver, platinum, and palladium—as part of their retirement savings. Unlike traditional IRAs that typically contain paper assets like stocks and bonds, a Gold IRA is designed to provide portfolio diversification and safeguards against rising inflation and market volatility.
Gold IRAs operate under the same basic tax rules as standard IRAs and Roth IRAs. A traditional Gold IRA is financed with pre-tax income, meaning contributions may be eligible for tax deductions, and withdrawals are taxed at retirement. A Roth Gold IRA, on the other hand, is financed using after-tax income, allowing qualified withdrawals to be tax-free.
To open a Gold IRA, an investor must work with a self-directed IRA provider approved by the IRS. These custodians oversee account administration such as IRS reporting and regulatory compliance. The investor also partners with a precious metals dealer to purchase IRS-approved metals, which must meet strict purity requirements—gold must be at least 99.5 percent pure.
One important requirement is that investors are not allowed to store Gold IRA metals in a personal safe. IRS regulations require that the metals be kept in an IRS-approved storage facility with advanced security measures and insurance. Popular storage facilities are located throughout the United States and offer either different storage arrangements.
Funding a Gold IRA can be done through fresh contributions, a IRA-to-IRA transfer, or a rollover from an employer-sponsored plan such as a 401(k). Rollovers are especially popular among investors nearing retirement age who want to limit exposure to market fluctuations.
Gold IRAs are often used as a hedge against inflation, currency devaluation, and systemic risk. While gold does not produce cash flow like dividends or interest, it has historically preserved value over long periods. As a result, many investors dedicate a percentage—rather than all—of their retirement portfolio to precious metals.
Understanding how a Gold IRA works is important before investing, as fees, storage rules, and market risks differ substantially from conventional retirement plans.