Is a Precious Metals IRA a Smart Purchase?

There can be no doubt that any smart investment plan should have a well-diversified portfolio of assets, and not be limited to just stocks and mutual funds.

The reason to include alternative assets such as physical gold and silver bullion in a precious metals IRA is to reduce the risk of concentrating too much money into a particular asset type.

When you have multiple asset types that are not strongly correlated with each other, one asset may increase in value when another falls, thereby reducing your portfolio’s overall volatility.

In addition, using an IRA for your investments provides you with important tax benefits that can increase the ultimate value of your nest egg.

In this article, we’ll describe how IRAs can be used for precious metal investing and the tax consequences of using an IRA. We’ll also explore the case for a substantial commitment to physical gold and silver.

Individual Retirement Accounts

There are two types of IRAs:

1. A traditional IRA allows you to deduct from your taxable income the annual contributions you make to the account. That is, contributions use pre-tax dollars. Furthermore, the money in the account is tax-deferred until you distribute it, which you must begin doing by age 70 ½.
2. A Roth IRA provides tax-free distributions, but contributions are not tax-deductible. You can grow a substantial nest egg in which you access earnings tax-free as soon as five years after establishing the account, as long as you’ve reached age 59 1/2.
   
   Moreover, you can withdraw contributions tax-free at any time and at any age without taxes or penalty. Unlike a traditional IRA, a Roth IRA does not have any required minimum distributions at age 70 ½ (or any other age).

Both types of accounts assess a 10 percent penalty if you withdraw money (except Roth contributions) before reaching age 59 ½. However, there are several exceptions that allow you to escape the penalty if you use the withdrawals for certain reasons.

They are both subject to the same contribution limit in 2025: up to $7,000 per year, or $8,000 if you’re age 50 or older (which includes a $1,000 catch-up contribution).

The deductibility of traditional IRA contributions may be limited if you or your spouse are covered by an employer retirement plan such as a 401(k); whether you can deduct the full amount depends on your income and filing status.

Roth IRAs, however, are subject to income-based contribution limits determined by your modified adjusted gross income (MAGI):

Single filers (or head of household):

• Full contribution if MAGI is less than $150,000
• Partial contribution if MAGI is $150,000 to less than $165,000
• No contribution if MAGI is $165,000 or more

Married filing jointly:

• Full contribution if MAGI is less than $236,000
• Partial contribution if MAGI is $236,000 to less than $246,000
• No contribution if MAGI is $246,000 or more

Married filing separately (and lived with your spouse at any point during the year):

• Contribution is phased out starting below $10,000
• No contribution allowed at $10,000 or more

All IRAs must be administered by a custodian or trustee, who is responsible for ensuring that you do not contribute too much money and do not break any of the rules concerning what you can own in the IRA.

They also ensure you begin taking minimum required distributions from your traditional IRA and that the distribution rules for your IRA are followed when you pass away.

Related: Augusta Precious Metals Review: How Does Augusta Stack Up Against the Competition? 

Gold and Silver in Your IRA

In general, you may not own two types of assets in your IRA:

• Life insurance policies
• Collectibles, including art, rugs, silverware, memorabilia and so forth

However, there is a special exception to the ban on collectibles. Certain types of precious metal – gold, silver, platinum and palladium – can be purchased in your IRA. The metals must be in IRS-approved forms, such as certain coins as well as slabs and bars that meet quality standards.

Bullion coins, as opposed to numismatic ones, are allowed in an IRA, and they must be minted from certain sources, such as the official mints of the United States, Canada and Australia, among others. Other coins are not permitted, such as the South African Kruggerand, because they do not meet the IRS standards for 99.9 percent purity.

You can also purchase precious metal slabs and bars if they meet the purity standards. You can’t contribute gold and other precious metals to an IRA, but you can roll it over to another IRA or qualified retirement account once you’ve purchased it in an IRA.

Related: Diversify Your Retirement with Physical Gold & Silver. Request Your Free Gold IRA Guide Today

Self-Directed IRAs

From a practical viewpoint, folks who want to collect gold in their retirement account open a self-directed IRA. This kind of IRA gives you the most latitude to own all sorts of investments beyond the plain vanilla ones.

In the case of a Gold IRA, there are several self-directed IRA custodians that specialize in this type of account. Contact a trusted precious metals broker/dealer, and they'll suggest a top rated provider with competitive annual fees.

They will also point you to a trusted Gold IRA depository to store your precious metals. 

The rules generally do not permit you to physically store your own IRA metals yourself, but rather have it kept by your custodian in a depository or some other safe place that's approved by the IRS.

In the last few years, “at-home” IRAs have come about that allow you to keep physical custody of your IRA metals yourself, but the practice is controversial in that the IRS has yet to specifically approve it – speak to your lawyer before contemplating a home storage Gold IRA.

You can own multiple IRAs of different types—Traditional and Roth, regular and self-directed. For example, you might set up a self-directed IRA just for precious metal investments, another for real estate, while still maintaining a conventional retirement plan like a 401(k) or a standard IRA.

The key rule is that your total contributions across all IRAs in a given year cannot exceed the annual limit.

Why Gold in Your IRA?

Gold and the other precious metals are great investments for your IRA, for a number of reasons:

• Diversification: As we mentioned earlier, gold and other precious metals diversify your retirement holdings when purchased in your IRA. You don’t have to search very hard to find evidence for this.
  
  In the first quarter of 2025, gold prices shot up 38 percent while the stock market was flat, falling 4.6 percent during the same time. Generally, you can expect the stock prices and gold to move counter to each other — one will go up when the other goes down.
• Store of Value: Gold has been a store of value for thousands of years. This is especially important during times of economic and political distress, when paper assets such as currency and stock certificates can lose their value.
  
  After the stock market crash of 1929, Germans had to spend billions of deutschmarks to buy a loaf of bread, but it only took a little gold to pay for food and other necessities. Gold is a rare element that holds its value over the long run.
• Inflation Hedge: Nothing destroys the value of currency like inflation. As prices rise, currency loses its purchasing power. Historically, the price of gold as kept pace with inflation, meaning you can use it to maintain your wealth even as currency loses its value. Cash can be devalued, but gold can’t.
• Security: Most people no longer stash currency under their mattresses, but rather keep it in banks and invest it in brokerage accounts or mutual funds. Your “money” is actually an electronic entry in a digital account. All it takes is for a clever hacker or financial terrorist to put your accounts at risk.
  
  Gold is tangible – you can touch and hold it. It’s not going to suddenly disappear due to cybercrime or computer errors. Even if you can eventually recover the money in a hacked account, the process may be lengthy and very distressing. Gold provides the security to survive in the brave new world of vulnerable electronic money.

Related: Birch Gold Group Review: Insider Look at the Gold IRA Dealer's Ratings, Complaints, Fees, and More...

Your Precious Metals IRA Plan

The amount of gold, silver and other precious metals you include in your saavings plan is up to you. However, many authorities recommend allocating 5 to 15 percent of your wealth in precious metals and other alternate assets.

We have reviewed some of the more established, trusted gold and silver dealers that sell bullion suitable for a gold IRA retirement account. Find a company that specializes in Gold & Silver Precious Metal IRAs to investors who want the convenience and flexibility of a self-directed IRA, as well as the tax benefits these accounts provide. Opening an IRA is very easy and can be done in minutes.

After you’ve selected a dealer, fill out the online application, name your beneficiaries and fund the account with a contribution and/or rollover. A reputable gold IRA dealer can remove any uncertainty and walk you through the process.

We’ve reviewed 50+ gold IRA companies, and suggest companies that specialize in gold IRAs and offer competitive pricing for your gold and silver. Some options to consider include:

If you have a Gold IRA somewhere else and are unhappy with the prices you pay or the service you receive, we urge you to compare with some of the competition. If it makes sense on paper, you don not have to stick with your initial gold dealer. Any precious metals company and facilitate trades in your IRA account. 

If your funds are currently tied up in a 401(k) or other employer plan, they should be able to assist in a rollover into physical metals.

By comparing gold companies, you can ensure an easy rollover or transfer of funds and feel confident in avoiding any missteps that could result in taxes or penalties.

Choose a dealer that guarantees your holdings are maintained in an insured, secure depository, and has a cost structure that is among the lowest in the industry.

Also, pick a gold IRA custodian that has earned high ratings on BBB, BCA, TrustLink and other sites. A good custodian will advise you on which types and forms of precious metals are suitable for IRA investment and which are problematic.

Request a free gold kit from GoldenCrest Metals or another top rated gold dealer. Don’t delay, the rewards of owning phyiscal gold have never been more compelling.