Are Gold IRAs Safe?

Are Gold IRAs Safe?


Written by John Rothans

Aug 12, 2020

When you’re planning for your golden years, there’s one word you want to associate with your future—safe. Which is why you might be wondering, “Are gold IRAs safe?” The term “safe” means something is shielded, sheltered, or guarded. Here, we explain why gold IRAs can be safe from setup, storage, and hedge standpoints.

The Security of Setting Up a Gold IRA

When you set up a gold IRA, it’s done through what’s known as a Self-Directed IRA, a type of IRA that enables you to purchase traditional assets as well as alternative assets like gold, real estate, and tax lien certificates. You can transfer or roll over funds from one of your retirement accounts to a gold IRA, or you can open a new Self-Directed IRA to house physical gold.

Regardless of whether you’re rolling funds over into an existing gold IRA or opening a new gold IRA, an IRS-approved custodian must purchase the gold. Since the IRS must endorse a custodian, you can enjoy peace of mind about the proper handling of your gold transactions.

When you work through U.S. Money Reserve’s Self-Directed Precious Metals IRA program, your IRA Account Executive will coordinate with your custodian to set up your IRA account and, if needed, arrange the transfer of funds from your old custodian to your new custodian.

IRA custodians are by no means “lone rangers.” They are required to follow certain IRS guidelines when holding assets belonging to their clients; those requirements govern everything from how checks are written to how transfers are wired. Custodians also face scrutiny by financial regulators.

So are gold IRAs safe from a set-up perspective? Yes.

The Security of Storing Gold

Once an IRA custodian buys gold on your behalf, it is stored at an IRS-approved depository, or a federally regulated bank or credit union. Again, this can give you peace of mind, as depositories, banks, and credit unions have expertise when it comes to safely storing gold and other precious metals.

Gold purchased for a gold IRA can’t be kept in a home safe, a bank’s safe deposit box, a shoebox in your bedroom closet, or anywhere else except a depository, bank, or credit union. Storing gold away from one of these designated locations could jeopardize the safety of your precious metal.

Industrial-grade security systems make depositories “an extremely safe option,” CNBC notes.

Furthermore, the IRS might view the storage of gold from a gold IRA at your house or another unapproved place as an IRA distribution, which could trigger negative tax consequences. Of course, if you own gold or another precious metal that is not tied to a Self-Directed IRA, you can store it anywhere you like.

“Purchasing and holding assets in an IRA on a pretax basis [provides] a great benefit. To continuously receive that benefit, the IRA assets must be held by a financial institution or an IRS-qualified IRA custodian,” according to the Industrial Council for Tangible Assets.

So are gold IRAs safe from a storage perspective? Yes.

The Security of a Hedge Against Inflation

An inflation hedge guards against the weakened buying power of money connected to an overall rise in the price of goods and services.

If the inflation rate climbs, traditional inflation hedges like gold, commodities, real estate, and inflation-related bonds “are likely to outperform other mainstream financial assets,” according to the World Gold Council.

Therefore, a gold IRA can be a safe haven when it comes to inflation.

“Gold stands out as a key portfolio component when identifying a long-term portfolio diversifier. Historically, gold has shown that it acts as an effective hedge and a useful part of the larger [risk] picture,” the Council reports.

Call U.S. Money Reserve to learn more about the safety often associated with gold IRAs. We can help you set a new one up or roll over an existing retirement account to a gold IRA. Contact us today for a private, obligation-free consultation.


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