Precious Metals
It is in times like these that people increasingly turn to gold and silver. Both gold and silver have a long history of service as safe haven assets during times of political and economic turmoil.
When uncertainty takes hold and the future may no longer look as safe and secure as once thought, gold and silver can help provide comfort to those looking to help protect their wealth.
Between growing economic uncertainty, problematic inflation, and military conflict around the world, many Americans today face greater difficulties than they did 10 or 20 years ago. Whereas the future once looked bright, with a strong economy and stock market, the past several years have seen rising levels of pessimism.
With inflation remaining problematic, war in Ukraine and the Middle East consuming more and more of our attention, and rising fears of a possible recession, it shouldn’t be any surprise that more and more people are turning to gold and silver.
If you’ve been thinking about buying gold and silver but haven’t yet pulled the trigger, now is the time to start thinking about it. And if you’ve been wondering if a gold or silver IRA might be the right choice for you, here’s everything you need to know about gold and silver IRAs.
The first question many people ask themselves is, “Why should I buy gold or silver?” If you’ve never researched anything outside mainstream media, that’s understandable.
Most mainstream financial publications have every incentive to push stocks and bonds, and they like to denigrate precious metals whenever they get the chance. But if you ignore gold and silver, you’ll never get to know their many potential benefits.
One of the primary benefits of owning gold and silver is portfolio diversification. Many people believe that owning a wide variety of stocks and bonds is enough to diversify their portfolios.
But in the event of a systemic financial crisis, both stocks and bonds could possibly drop in value.
Really diversifying can mean owning assets in many different asset classes, whether it’s precious metals, real estate, agricultural commodities, etc. Gold and silver have traditionally been one way to provide financial portfolios with this much needed diversification.
In the midst of a fear of a potential stock market crash, many people know that gold and silver have often been thought to be a safe haven and even possibly help to provide protection against market uncertainty and geopolitical turmoil.
You may have heard that gold and silver prices tend to rise when stock markets fall.
During the 2008 financial crisis, for instance, the gold price gained 25% during the same period that markets fell more than 50% (October 2007 to March 2009). And in the aftermath of the crisis, gold nearly tripled from its 2008 lows to its 2011 highs, while silver more than quintupled.
Gold and silver have also been traditional hedges against inflation. When inflation rises, gold and silver tend to rise in value too.
During the 1970s stagflation, for instance, gold and silver both saw average annualized growth rates of over 30% over the course of the decade.
With gold and silver prices having already risen in response to the past few years of inflation, and with the 2020s potentially becoming another stagflationary decade, gold and silver prices could continue rising if the economy worsens.
And while the dollar and other assets may fall in value or lose purchasing power, gold and silver could continue gaining value.
Gold and silver aren’t just protection for bad times. They can also provide much needed asset growth during good times as well.
Over the long term, gold can gain value just as much as stocks do. In fact, according to FXStreet, gold has outperformed the S&P 500 in the 21st century.
That means that gold may be seen not just as a hedge or a diversifier, it can also be seen as a means to help potentially grow your assets.
Many people who choose to buy gold and silver today do so through gold and silver IRAs. These retirement accounts allow them to buy gold and silver with relative ease and convenience. But how do gold and silver IRAs work?
First let’s talk about what a gold IRA is. A gold IRA is a tax-advantaged retirement account that allows you to own physical gold or other precious metals while still enjoying all the same tax advantages as a conventional IRA retirement account.
Your gold IRA could be a Traditional gold IRA, in which you invest using pre-tax dollars, or it could be a Roth gold IRA, in which you invest using post-tax dollars.
A silver IRA is just like a gold IRA, only that it acquires and holds silver instead of gold. Just like a gold IRA, your silver IRA can be a Traditional silver IRA, in which you buy silver using pre-tax dollars, or it could be a Roth silver IRA, in which you buy silver using post-tax dollars.
Both gold and silver IRAs are examples of self-directed IRAs, which are a type of IRA that allows you to purchase alternative assets that you might not have access to through most Traditional or Roth IRAs. Self-directed IRAs allow you, the account holder, to manage your account directly and determine what types of assets you acquire.
You can buy both gold and silver in a precious metals IRA, or you could set up a self-directed IRA to purchase numerous other types of alternative assets such as real estate, agricultural commodities, cryptocurrencies, etc.
Gold and silver IRAs are subject to all the same rules and regulations as conventional IRAs. Whether your gold and silver IRAs are Traditional or Roth, all the same rules and restrictions apply.
It’s very important that you familiarize yourself with those rules and discuss them with your financial advisor or tax advisor before you start using your gold or silver IRA so that you won’t inadvertently subject yourself to costly taxes and fees.
Like all IRA accounts, gold and silver IRAs cannot acquire collectibles. This means that any coin considered a collectible is ineligible for purchase through a gold or silver IRA.
Additionally, only certain gold and silver coins are eligible to be acquired by a gold or silver IRA. These include certain coins minted by the US Mint and specifically authorized by law for IRA purposes, as well as any coins that meet minimum fineness requirements.
This means that if you had your heart set on buying South African Krugerrands or $20 St. Gaudens gold coins, you won’t be able to acquire them with a gold IRA, because their metal content is too low. Using IRA assets to purchase those coins would be treated as a distribution of assets and would subject you to potential taxes and penalties.
Thankfully there are numerous coins available to you to purchase for your gold or silver IRA, such as American Gold and Silver Eagles, Canadian Maple Leafs, and a whole host of other gold and silver coins.
Most mints today are aware of the requirements of US law when it comes to purchasing gold and silver coins through a gold or silver IRA, and they produce coins designed to allow US citizens to purchase them with their IRAs. Goldco offers a wide variety of those coins available for sale.
Gold and silver IRAs are also subject to the same contribution limits as other IRA accounts. For 2024 and 2025, that limit is $7,000 if you’re under age 50, and $8,000 if you’re over age 50.
The income limits for tax deductibility of IRA contributions are also the same for gold and silver IRAs as they are for other Traditional and Roth IRAs. But many people choose to fund their gold and silver IRAs through rollovers and transfers from existing tax-advantaged retirement accounts.
Rolling over funds from a 401(k) to a gold or silver IRA, or transferring funds from an existing IRA to a gold or silver IRA are popular options for people looking to use their existing tax-advantaged retirement funds.
In some cases, these rollovers and transfers are the result of orphaned funds held in a previous employer’s retirement plan. In other cases, employees want to access a wider array of investment options.
And in still other cases, people want to realize the gains they have made in a 401(k) or IRA account and move to alternative assets without incurring a tax liability.
Rollovers or transfers from 401(k), 403(b), TSP, IRA, and similar accounts can be made to a gold or silver IRA tax-free. Or if you want to do a Roth conversion, you could roll over or transfer funds from a 401(k) or similar account into a Roth gold or silver IRA, in which case you would owe taxes on the amount rolled over.
Gold and silver IRAs have all the same tax advantages as any other IRA account. If your gold or silver IRA is a Traditional IRA, that means you can purchase with pre-tax dollars and only pay taxes when you take a distribution.
If your gold or silver IRA is a Roth IRA, you purchase with post-tax dollars and pay no taxes when you take a qualified distribution.
The regulations surrounding distributions and required minimum distributions (RMDs) are the same for gold and silver IRAs as they are for other IRA accounts.
If your gold or silver IRA is a Traditional IRA, you’ll be required to take RMDs once you reach age 73. And if you take distributions before age 59½, you may be required to pay taxes and penalties.
If your gold or silver IRA is a Roth IRA, you won’t be required to take any RMDs.
As with any other IRA account, the assets in your gold or silver IRA will have to be managed by a custodian. Goldco partners with trusted gold and silver IRA custodians who have experience in the precious metals industry.
Your gold and silver will also need to be stored at a precious metals depository. Goldco partners with depositories who offer decades of experience in keeping our customers’ gold and silver safe and secure.
Gold and silver IRAs have numerous advantages.
A gold or silver IRA can allow you to diversify your existing tax-advantaged assets and achieve your desired level of portfolio diversification without requiring you to incur tax liabilities by divesting yourself of tax-advantaged assets.
Many people become more risk averse as they near retirement. They want to protect their gains and are more concerned with maintaining their existing wealth than in making further big gains.
Because gold is often considered a less risky asset, it can play an important role to those who are trying to reduce the risk profile of their portfolios.
Many people who have assets in 401(k) or IRA accounts may not have a risk-free place where they can park their money if they fear a stock market correction. They may think that their only options are to ride out a stock market crash or to cash out their retirement savings and take a huge tax hit.
With a gold or silver IRA, you can move your retirement assets tax-free into gold and silver, helping you take advantage of gold and silver’s ability to gain value even during periods when markets are falling, and keep you from having to distribute assets from your retirement accounts and incur a tax liability.
Starting a gold or silver IRA doesn’t have to be difficult. In fact, it can be done in four easy steps.
The first step is to make the decision to open a gold or silver IRA and to work with a trusted partner. Goldco has over a decade of experience helping thousands of customers take advantage of the benefits of gold and silver IRAs.
When you decide to open a gold or silver IRA, you’ll want to choose a custodian to help manage and administer your gold or silver IRA. Goldco’s partners with trusted custodians who help our customers administer their gold and silver IRAs.
Once you have your gold or silver IRA set up and have chosen a custodian, you’ll want to figure out how you will fund your IRA.
If you’re deciding to fund a gold or silver IRA through a rollover or transfer from an existing retirement account, you may want to consult with your tax advisor or financial advisor to make sure that you’re not going to accidentally incur tax liabilities.
Once your gold or silver IRA is funded, it’s time to make the decision on what types of gold and silver you’ll buy. Remember that only certain types of gold and silver coins and bars are eligible for acquisition through a gold or silver IRA.
Goldco offers numerous IRA-eligible gold and silver coins and bars to our customers, and our precious metals specialists will ensure that the gold and silver you buy from Goldco can be purchased and held in your IRA.
When it all comes down to it, the decision on whether or not to start a gold or silver IRA is up to you. It’s dependent on your individual needs and your financial or retirement goals.
But if you’ve been working hard for years or decades to save money for retirement, don’t you owe it to yourself to try to explore how to help safeguard those savings?
If you’re worried about inflation and what it may do to your purchasing power, about the effect of war on the economy and international markets, or about the possibility of a recession, now may be the time to start thinking about how you might be able to help protect your wealth.
If you’re nearing retirement, would it be advantageous for you to experience another 2008-style crisis and potentially suffer those types of losses?
Many people learned the hard way after 2008 how badly a major financial crisis could impact their savings. And many probably vowed that the next time a crisis threatened, they would try to help safeguard their savings with gold and silver.
Will you be one of them?
It’s not too late to start taking steps to try to help safeguard your wealth. Call the precious metals specialists at Goldco today and learn more about how gold and silver could potentially help you safeguard your retirement savings.
This article was originally published in March 2022 and was updated in November 2024.
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DISCLAIMER: This site is general in nature and not tailored to the specific goals of any individual. All investments carry risk. Some of those risks associated with precious metals include the following: prices may rise and fall, which means the value of your metals may go up or down over time and you may sell for more or less than you paid. Past performance does not guarantee future results. Goldco cannot guarantee, assure, or promise future market movement, prices, or profits. Even though Goldco and its representatives are precious metals specialists, we are not licensed financial advisors and do not give financial advice. Additionally, Goldco cannot provide tax or legal advice and will not advise as to the tax or legal consequences of purchasing or selling precious metals or opening a Precious Metals IRA. Individuals should consult with their investment, legal or tax professionals for such services.
