You may have heard this term before but aren’t quite sure what it means. In short, IRA-eligible gold refers to physical precious metals that can be held in a self-directed individual retirement account.
The IRS (internal revenue service) has specific regulations pertaining to the types of assets that can be held in an IRA, and gold happens to fall into this category.
Not all gold is approved for an IRA, however.
The gold must meet certain fineness requirements and must be in the form of gold bullion, coins, or bars.
In this post, we’ll discuss the different types of gold that are eligible for an IRA so that you can make an informed decision about which type is right for you.
What Makes A Gold Element IRA Approved?
Only 3 gold elements are IRS-approved:
- Gold coins,
- Gold bars, and
- Gold rounds
And all of these should follow certain conditions:
IRA Eligible Gold Coins
- Must be 99.5% pure
- Most collectible coins are excluded
- Must be encapsulated proof coins in mint condition, plus include a certificate of authenticity
- Non-proof coins must not be damaged and should be in an uncirculated condition
IRA Eligible Gold bars And Rounds
- Must be 99.5% pure
- Must be produced by an approved or certified source, such as NYMEX or COMEX-approved refinery or a government mint, and satisfy purity standards
- Small bullion bars must meet strict weight specifications in order to be eligible
Which IRA-Approved Gold Materials You Can Possess?
In total, there are 11 types of IRA-approved gold materials. These are:
- Austrian Gold Philharmonic coins
- British gold Shēngxiào Lunar Series (British coin)
- Australian Kangaroo/Nugget coins
- American Eagle coins
- American Gold Eagle proof coins
- Canadian Gold Maple Leaf coins
- American Gold Buffalo uncirculated coins (proofs not allowed)
- British Gold Britannia coins (from 2013)
- British The Queen’s Beasts (coin)
- Gold bars and rounds produced by an NYMEX or COMEX-approved refinery or national government mint, meeting minimum fineness requirements.
- Chinese Gold Panda coins
How To Purchase IRA-Approved Gold?
There are two ways to go about it.
1. Open A Self-Directed IRA Account
Operating this type of account involves 3 simple steps:
- Step 1: Open an account by filling necessary paperwork
- Step 2: Fund your account
- Step 3: Purchase your preferred gold items
Always keep in mind to open a self-directed gold IRA account only with a reputable gold IRA company.
Invest In Gold IRA With Augusta
If you’re looking for the best option to invest in a gold IRA, check out our top gold IRA providers list first.
Our number one pick is Augusta Precious Metals – and boy they do offer a lot.
- A+ BBB rating? Check.
- Zero complaints since their inception? Check.
- Thousands of rave reviews? Check.
- Money Magazine’s top-pick designation? Check!
Read the complete Augusta Precious Metals Review here.
Plus, if you take advantage of their services, they’ll even pay all custodial and storage fees for up to 10 years!
Now that’s what I call an incredible deal.
You’d be hard-pressed to find another company offering even close to that level of value for their customers.
Don’t forget that there may be fees associated with setting up and maintaining the account, as well as any transaction costs for buying and selling gold.
2. Purchase IRA-Approved Gold Outside Of An IRA
It’s not every day that you hear about buying gold outside of an IRA, but it is possible.
However, there won’t be any tax benefits attached to the purchase since it will be considered a collectible rather than an investment.
To still go with this, follow these steps:
- Step 1: Find a reputable dealer who specializes in IRA-approved gold, and make sure they have the proper certifications and accreditations
- Step 2: Purchase the gold using funds from a non-IRA account
- Step 3: Carefully complete the necessary paperwork to have the gold transferred to you safely
Which IRA-Approved Gold Perform The Best?
When it comes to investing in gold through an IRA, selecting the right type of gold can make a big difference in terms of performance.
Generally speaking, coins tend to perform better than bars.
This is because coins are easier to sell and often command higher premiums due to their collectability.
Among coins, American Gold Eagles tend to have the best track record, followed by Canadian Maple Leafs and Austrian Philharmonics.
Before making any decisions, it’s always wise to consult with a financial advisor who specializes in precious metals investments.
Consider These 4 Things When Purchasing IRA-Eligible Gold
When you’re ready to purchase IRA-eligible gold, there are four things you should consider:
1. Contribution Limits
The first thing you’ll want to consider is contribution limits.
For 2022, the contribution limit for IRA is $6,000 ($7,000 if you’re 50 or older).
If you exceed the contribution limit for your IRA, you’ll be subject to taxes and penalties or you can hold physical gold outside an IRA.
Related: 7+ Important Gold IRA Tax Rules You Should Be AWARE Of
Next, you’ll want to take a look at fees.
When you purchase gold for your IRA, there will likely be fees associated with the transaction.
These can include things like:
- shipping and handling fees,
- storage fees, and
- dealer commissions
Be sure to ask about all fees upfront so there are no surprises down the road.
3. Minimum Investment Requirements
Another consideration is minimum investment requirements.
Some dealers may have a minimum amount that you must invest in order to purchase gold from them.
This minimum can vary depending on the dealer, so it’s something you’ll want to inquire about before making a purchase.
4. Early Withdrawal Penalty
Finally, you’ll want to be aware of early withdrawal penalties.
Withdrawing money from your IRA before age 59½ can result in taxes and penalties being assessed on the withdrawal amount.
IRA Approved Precious Metals IRA FAQs
What precious metals are IRA approved?
Gold, silver, platinum, and palladium
Looking To Start A Gold IRA Retirement Account?
Gold IRAs are in demand now more than ever.
The traditional stock market has been volatile, and many investors are looking for a safe haven for their retirement savings.
Gold is often seen as a good choice for an IRA because it is a tangible asset with a long history of preserving its value.
No matter what your reasons for wanting to start a gold IRA may be, it’s important to do your research and select the best gold IRA company for your account.
There are a lot of factors to consider, but I’ve made things easy for you by reviewing the best companies and creating a list of my top picks here.
So what are you waiting for?
Check out the list and get started on opening your very own gold IRA today!