Precious Metals
People choose to start a gold IRA for a number of different reasons. Some are looking to help safeguard themselves against stock market instability.
Others are trying to help safeguard their wealth against inflation. And still others are just looking for an asset with which to diversify their portfolios.
Regardless of their reasons for starting a gold IRA, these people are taking advantage of an increasingly popular method of gold acquisition. If you don’t know how to open a gold IRA, or even know what a gold IRA is, read on for this full guide about how to start a gold IRA.
If you’ve never bought gold before, you may be wondering why anyone would want to buy gold. But gold has been a treasured asset for millennia, helping to safeguard wealth and assets through economic and financial turmoil.
Each individual’s reasons for buying gold may vary, but there are a few important reasons for buying gold that many people have in common.
One of the roles gold can play is in diversifying asset portfolios. Diversification is a strategy that is often undertaken to lower the risk of holding any individual asset.
Many people think they can just buy a variety of stocks and bonds and that will result in a diversified portfolio. But both stocks and bonds are subject to the boom and bust cycle of Wall Street, and both can sustain losses.
In the event of a systemic financial crisis, both stocks and bonds could lose value. We saw an example of that during the 2008 financial crisis, when stock markets collapsed and bond markets froze.
Diversification can take many different forms, and can often mean not just holding a range of stocks and bonds, but also various other types of assets, such as real estate, commodities, and precious metals such as gold and silver. How exactly you want to diversify your portfolio is up to you and your financial advisor, but gold can play an important role in portfolio diversification.
Gold can also play an important role in helping defend your assets against inflation. That can be particularly important during times in which inflation is high or rising.
Gold has a history of gaining value during times of high inflation. During the 1970s, for instance, gold’s average annualized gains were over 30% over the course of the decade.
With inflation peaking at over 13%, that meant that gold’s real gains were over 20% per year for a decade.
Compare that to stock market indices such as the Dow Jones Industrial Average, which began the 1970s at 809 points and ended 1979 at 838 points, a total nominal gain of only 3.65%. So at a time when holding stocks would have left you with negative gains after inflation, gold gave people the possibility of double-digit real returns.
With high inflation having given many people a wakeup call a few years ago, it’s no surprise that people today are once again turning to gold to help defend their wealth against inflation. If gold were to repeat its 1970s performance in the coming decade, gold owners could see impressive gains.
Higher inflation means that the value of your dollar-denominated assets declines every year in terms of its purchasing power. And over the course of the 20th century, the dollar continued to decline in value over the decades.
Since 1913, the US dollar has lost 97% of its purchasing power. Gold, however, has consistently gained in value, from $20.67 an ounce in 1913 to nearly $2,700 an ounce today. That enables gold to maintain its purchasing power in the face of a constantly devaluing dollar.
There is possibly almost no likelihood that the Federal Reserve will cease its policy of monetary inflation. The historic trend is and always has been towards further growth in the money supply, and ever higher inflation.
The question you then might want to ask yourself is what you place your trust in more: the Fed not to continue devaluing the dollar, or gold to help safeguard your assets against dollar devaluation?
Gold also has a reputation for helping safeguard wealth during times of economic crisis. You probably remember the 2008 financial crisis, when stock markets lost over 50% of their value and many people saw years or even decades of retirement savings wiped away.
While stocks declined and then struggled to regain their pre-crisis highs, gold made an amazing climb in value, nearly tripling in value by 2011. Many people who saw that began to understand the ability of gold to help safeguard assets in the event of a market downturn.
Could gold perform similarly during the next potential economic downturn? We saw indications of that during 2020’s mini-recession, and the recent increases in the gold price seem very similar to gold’s moves in 2007 and 2008.
When the next crisis occurs, how high could the gold price move?
Gold doesn’t just help safeguard the value of your savings during bad times either. Even when stock markets are gaining value, or in a bull market, gold can provide an opportunity for asset appreciation and wealth accumulation.
Comparing just the last few years, the S&P 500 fell 19% in 2022, gained 24% in 2023, and 23% in 2024. Meanwhile, gold fell 0.26% in 2022 and gained 13% in 2023 and 28% in 2024.
That means that buying gold isn’t the equivalent of putting your cash under the mattress. It can be a perfectly good way to help grow your wealth.
It’s also a reminder that gold isn’t just a safe haven asset that can be turned to when times get tough. Even when things are going well on Wall Street, gold can play an important role in your portfolio.
If you believe in the case for buying gold, you still may not be familiar with a gold IRA. Or you may wonder whether you can just buy gold through an IRA at your existing brokerage.
Unfortunately, most brokerages don’t offer you the option to buy gold through their IRA programs. Instead, starting a gold IRA means that you’ll need to be a little more proactive and open a self-directed IRA.
A self-directed IRA is just like it sounds. It’s an IRA account that you direct.
Rather than being dependent on a brokerage for your financial transactions, you decide which assets you want to acquire and how much.
A self-directed IRA can give you more control over your assets, and can open up a whole new world of opportunities. Many IRA custodians limit the types of assets you can acquire, which can make it difficult to acquire alternative assets such as real estate, precious metals, or commodities.
With a self-directed IRA, rather than being limited to whatever assets your brokerage offers you, you can be proactive and choose to acquire just about any asset an IRA can acquire, including precious metals like gold.
A gold IRA is a type of precious metals IRA, allowing you to acquire physical gold coins or bars. These precious metals IRAs are a self-directed IRA, giving you the opportunity to start a gold IRA and reap the benefits of owning gold.
You’re not limited to acquiring gold either. If you want to acquire other precious metals like silver, palladium, or platinum, you can do so too. But gold is one of the most popular precious metals purchase options, with numerous gold coins and gold bar choices and a very liquid market.
If you’re unfamiliar with a gold IRA, you may wonder how exactly it differs from a normal IRA. Aside from a few rules that are specific to precious metals, a gold IRA follows the exact same rules as any other IRA account.
Like any other IRA account, a gold IRA is subject to IRS laws and regulations. These include the requirement to have IRA assets managed by a custodian, laws against self-dealing, and regulations surrounding contributions and distributions.
As with any other IRA, the contribution limit for 2025 is $7,000, or $8,000 for those over age 50. Required minimum distributions from a conventional gold IRA also have to be taken once you reach age 73, just like with any other conventional IRA.
A gold IRA has specific rules regarding the types of gold coins or bars you can acquire. All gold held by a gold IRA must either meet minimum fineness requirements of .995 (99.5% pure gold), or be one of a handful of US Mint coins authorized by statute to be IRA-eligible.
This is to keep IRAs from acquiring collectibles, which are prohibited as acquisitions for IRA accounts. That means that some popular bullion coins, such as the South African Krugerrand, are not eligible for acquisition by a gold IRA because their gold content is too low.
If you were to attempt to purchase coins that were not eligible for acquisition by a gold IRA, that would be considered a distribution of account assets and would be subject to any applicable taxes and penalties.
This is why it’s important to familiarize yourself with the rules of IRA accounts, and especially gold IRA accounts, before you decide to open a gold IRA. Talking with your financial advisor and tax advisor can help you avoid some of the common pitfalls that could harm you.
Aside from the requirements regarding gold fineness, the range of gold asset options available to you when you start a gold IRA is nearly limitless. Gold coins are available in numerous sizes, with the most common ranging between a quarter of an ounce and one ounce.
Gold bars are available in numerous sizes as well, from as little as one gram up to hundreds of ounces. Mints around the world are constantly creating new gold coin and gold bar options to appeal to consumers.
Coins of numerous different sizes and designs are available, with new ones appearing each year. With so many options available, there is something out there for everyone.
One of the benefits of starting a gold IRA is gaining control over your assets. Your assets will be stored safely with a depository and managed by a custodian, but you decide when you want to buy or sell gold.
You can add to your gold holdings whenever you want to, pursuant to IRS regulations, and take distributions penalty-free after age 59½.
When it comes time to take your distributions, you can even take them in the form of physical gold, allowing you to hold onto your physical gold coins or gold bars even after it is no longer in a tax-advantaged account. That can allow you to continue benefiting from your gold ownership long into retirement.
Starting a gold IRA doesn’t have to be difficult at all. There are only a few steps that need to be taken, and the entire process can be done seamlessly.
The first thing you’re going to want to do is to select your IRA plan. Most people will opt for their gold IRA to be a Traditional IRA, meaning that it is funded with pre-tax dollars.
That’s because many people roll over or transfer assets into a gold IRA from an existing tax-advantaged retirement account, such as a 401(k), 403(b), TSP, or IRA account.
You also have the option to create a Roth gold IRA account, funding it with post-tax dollars. That allows you to perform rollovers or transfers from existing Roth accounts you may hold, or you can perform a Roth conversion from accounts you have that have been funded with pre-tax dollars.
As with all financial decisions, you’ll want to consult with your financial advisor and tax advisor first, to make sure that you don’t expose yourself to tax liabilities or unnecessary complications.
As with any IRA, your assets must be managed by a custodian. Goldco has established relationships with IRA custodians who have long track records of customer service and satisfaction.
When it comes to helping safeguard your retirement savings, you can’t be too careful with who you trust to manage your hard-earned wealth. Goldco’s record of customer satisfaction is one of the best in the industry, and we work hard to make sure that your savings stay safe and secure by working with some of the most trusted custodians in the self-directed IRA industry.
Now it’s time to fund your IRA. Many people will choose to fund their gold IRA through a 401(k) rollover, or a rollover or transfer from a 403(b), 457, TSP, IRA, or similar account. In most cases these rollovers and transfers can be done tax-free, ensuring that you don’t incur any taxes or penalties when you decide to buy gold.
But as with any financial decision, be sure to consult with your tax advisor and financial advisor to make sure that you aren’t accidentally exposing yourself to tax liabilities.
Once your gold IRA has been funded, it’s time to select the precious metals you want to purchase. Goldco offers a wide selection of IRA-eligible gold coins and bars from a variety of mints throughout the world.
Once you have selected the type of gold you want to buy, you will use your gold IRA assets to purchase those coins. They’ll be stored safely at a depository, and you will receive regular updates about the status of your gold holdings.
Whenever you want to buy more gold, or to sell your gold holdings, you can reach out to Goldco to assist you with the process.
Your Goldco representative can help you through the entire process of buying gold from start to finish. And if you have any questions about the process, your representative will be able to answer them.
Have you worked hard for years to save money? Are you worried about your assets losing value to inflation?
Are you afraid of how a possible recession could impact your retirement savings? Or are you just looking for alternative assets that could help diversify your holdings?
Depending on your stage of life and your financial goals, starting a gold IRA could be something you may want to think about.
With inflation still problematic and unease about the future of the economy, many people are looking nervously at what is taking place on Wall Street and in Washington. All eyes are on the Federal Reserve as the Fed attempts to navigate monetary policy and unwind the trillions of dollars it pumped into the financial system since 2020.
With the Fed acting in September 2024 just like it did in September 2007, it’s hard not to draw parallels between then and now. And many who are looking at what’s going on are determined to help safeguard their retirement savings no matter what happens in the coming years.
If you’re looking to help safeguard your retirement savings, starting a gold IRA could be one way to help defend your assets against potential loss, whether it’s against the constant annual loss of value to inflation or the more severe loss of a possible market downturn.
If you haven’t decided how to try to help safeguard your assets, every day you put off a decision could cause you to lose ground against inflation, and bring you closer to the day that markets might start to turn south.
Don’t let your hard-earned money remain at risk any longer than it needs to. Call the precious metals specialists at Goldco today to learn more about how gold may be able to help safeguard your savings.
This article was originally published in February 2022 and was updated in January 2025.
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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.
