What’s a gold Roth IRA? Why do people open these types of accounts? And can you only hold gold in a gold Roth IRA? As America’s Gold Authority®, U.S. Money Reserve is here to answer your questions about gold Roth IRAs.
Q: What is a gold Roth IRA?
A gold Roth IRA is a type of self-directed IRA that allows you to hold gold bars and coins in your retirement portfolio, along with silver bars, silver coins, and platinum and palladium bars. Self-directed refers to the fact that the owner—and not a financial services provider—manages the assets in this type of IRA.
While a regular Roth IRA allows you to hold traditional assets like stocks, bonds, mutual funds, and exchange-traded funds (ETFs), a gold Roth IRA lets you hold alternative assets like precious metals.
With a Roth IRA, you pay taxes on assets that go into the account, but you withdraw assets on a tax-free basis; that’s the opposite of a traditional IRA. For 2021, the annual contribution limit for a Roth IRA is $6,000 if you’re under 50 or $7,000 if you’re 50 or over.
Q: What are the rules for gold Roth IRAs?
Although a gold Roth IRA gives you some freedom in terms of the types of assets you can put in it, there are some restrictions.
First and foremost, gold (and other precious metals) held in a gold Roth IRA must meet IRS requirements. In most cases, precious metals in a gold Roth IRA must be at least 99.5% pure, although Gold American Eagle bullion coins—with 91.67% purity—are an exception.
Additionally, gold that you add to a gold Roth IRA must be purchased from a precious metals distributor through your self-directed IRA custodian. The custodian will use your funds to buy the gold from the distributor. Once you buy the gold, it must be stored at an IRS-endorsed depository. In other words, you can’t keep the gold in an at-home safe or under your mattress.
Q: How do you open a gold Roth IRA?
To open a gold Roth IRA, first you must choose an IRS-approved custodian, such as a bank or other financial services provider. Then the gold must be purchased through a precious metals distributor like U.S. Money Reserve. After that, the gold must be stored at an IRS-approved depository, which a custodian or precious metals dealer can recommend.
Keep in mind that you cannot add gold you already own to a Roth IRA. Only gold purchased through a self-directed IRA can be added. The cash you hold in an IRA must be used to buy the gold.
To convert an IRA to gold or another precious metal, you can move money through a transfer or a rollover. With a transfer, you can shift money only from one type of account to the same type of account, such as from a Roth IRA to a gold Roth IRA. A rollover lets you shift money from one type of account, like a 401(k), to a different kind of account, such as a gold Roth IRA.
Do you still have questions about gold Roth IRAs? Our IRA Account Executives can help. Call now or request your free precious metals IRA information kit online to learn more about incorporating physical gold into your retirement strategy.