IRA 101: Buying Gold with It

Diversifying is essential in an uncertain economic landscape, and one ancient asset that has stood the test of time is gold - long known as an economic "safe haven". By investing in gold through an Individual Retirement Account (IRA) this article explores all steps and considerations involved when purchasing it within such an account.

Understanding Gold IRAs: Before diving in and investing through an IRA, it's crucial that investors understand exactly what a Gold IRA entails. A Gold IRA is a type of self-directed IRA which enables investors to own physical gold as part of their retirement fund compared to traditional IRAs that only permit investing in stocks and bonds; instead, a Gold IRA gives tangible asset ownership an avenue.

Steps in Establishing a Gold IRA:

  • Select an Administrator: Federal law requires that individual retirement accounts (IRAs) are managed by an appointed custodian, so make sure the one chosen specializes in self-directed precious metal IRAs and is recognized by the IRS.

  • Once You Select and Open an Account: When choosing a custodian, it will be necessary to open and fund an account with them. Your Gold IRA may be funded either with cash, or existing retirement savings transferred over from another IRA or 401(k).

  • After funding your account, once selecting precious metals as investments you want to buy into and investing, make note that there are certain purity standards required by the IRS (0.995 pure in case of gold) which must be observed when holding them within an IRA account.

  • Storage: According to IRS requirements, precious metals in your Gold IRA must be stored in an approved depository. Your custodian should assist in organizing this storage.

Understanding Costs:

There are various fees associated with Gold IRAs, such as setup costs, storage charges and custodian fees. When setting up an IRA account it's advisable to get an accurate list of fees so they can factor into any decisions about investments made by your custodian.

Advantages of Investing in Gold Through an IRA:

  • Diversification: Gold is an ideal way to diversify your investment portfolio as its price often moves inversely against paper assets like stocks and bonds.

  • Tax Advantages of Gold IRAs: Like traditional and Roth IRAs, gold IRAs provide tax advantages. Your contributions could potentially be tax-deductible while gains deferred until distributions start coming out.

Gold Is an Insurance Policy: As currency values decline, its price tends to go up; with inflation becoming an ever more pressing concern, the value of gold may even become greater as its holding period lengthens.

Considerations and Risks:

Gold IRAs come with their own set of risks that must be assessed before investing.

  • Volatility: Gold may be seen as an investment with long-term stability; however, its price can become highly volatile over shorter time frames.

  • Storage Costs: Physical gold requires additional costs that could negatively affect its returns over time.

  • Liquidity: Selling physical gold may take more time compared to paper assets which can often be sold quickly.


Gold investing through an IRA can provide a fantastic way to diversify retirement savings and protect against economic uncertainties, but it is vitally important that investors fully evaluate costs and risks associated with making any such investment decisions. Consulting a financial advisor, who can tailor recommendations based on individual finances can be extremely useful before taking any investment action.