Most people will find that a gold IRA is a great way to diversify their retirement and investment portfolio. However, this is a different type of IRA than a traditional or Roth IRA, and it is important to understand the differences between these investment options.
Before starting your gold IRA investing plan, consider the following three factors and be sure to check your options when making the decision.
Not Just Gold
The process of gold IRA investing means holding physical gold. However, a gold IRA can also include other specific precious metals, including silver, palladium, and platinum.
While these four precious metals can be included in the gold IRA holding, not all coins or rounds made of these metals are eligible. For example, gold coins, rounds, or bars, can be held in the IRA, but they must be approved by the IRS.
Cannot Add Existing Gold Owned
If you currently own gold coins or other approved forms of precious metals, they cannot be added to your gold IRA investing plan. Instead, the custodian is responsible for taking the funds you add to the account and buying approved coins through a metal exchange.
Cannot Be Stored at Home
Unlike gold or other precious metals or coins you may have at home or in a safety deposit box, gold held in your IRA must be stored in a depository, which is an IRS-approved nonbank trustee, or in the physical possession of a bank.
As with any investment, knowing the facts before investing is always an important part of avoiding any possible fees or penalties.