Precious Metals
With the potential uncertainty growing all the time, more and more people are looking at ways to help safeguard their wealth against the possibility of recession and financial turmoil. Millions of Americans watched in horror in 2008 as the savings they worked so hard to build up melted away in a matter of months, and they don’t want that happening again.
Many Americans have already started to think about how to possibly safeguard their assets, taking advantage of the time they still have to find alternatives. Gold has always been a popular option when it comes to helping safeguard wealth, so it’s no surprise that demand for gold has increased in recent years.
One option that is becoming increasingly popular is a gold IRA, which allows you to own physical gold coins and bars in an IRA account. But with so many options to help safeguard assets, how do you know if a gold IRA is a good idea?
If you haven’t already heard of a gold IRA, it’s just an IRA account that owns physical gold coins or bars rather than conventional financial instruments. If you already have an IRA account, there’s a good chance that your current custodian doesn’t offer gold as an asset option.
Gold IRAs are therefore most commonly the purview of IRA custodians who specialize in alternative assets such as precious metals, real estate, private offerings, etc. These gold IRAs are a type of self-directed IRA, in which you as the IRA owner make the decision about which assets your IRA owns, without being artificially limited in your choices.
Owning gold has a number of benefits, which is why gold has remained a popular asset for centuries. Here are three benefits of owning gold that you could consider.
Gold has a reputation first and foremost as a safe haven asset and store of wealth. When paper currencies lose value, when companies that issue stocks and bonds falter, when governments downturn, gold is still there maintaining its value.
That long-term stability can be especially beneficial during times of financial turmoil and economic uncertainty. You may not know what’s going to happen a year or two from now, but you do know that gold in the vault will remain gold in the vault.
Over the long run, gold maintains its purchasing power and gains in value when paper currencies don’t. The dollar, for instance, has lost 97% of its value since 1913, while gold has gained nearly 14,000% in value. That kind of performance helps gold retain its popularity as an asset for long-term wealth preservation.
Gold has also played a role as an inflation hedge, as it tends to perform especially well during periods of high inflation. The last time the US experienced prolonged high inflation was during the stagflation of the 1970s. During that decade, gold grew at an annualized rate of over 30%, far outpacing double digit inflation.
Now that inflation has once again become a nagging problem, gold could play an important role in hedging against inflation. If inflation becomes entrenched again today as it was during the 1970s, could gold perform the same way it did back then?
You’ve probably heard that you shouldn’t ever put all your eggs in one basket. Yet when it comes to asset allocation, many of us end up doing that.
How much or how little you want to diversify your portfolio is a matter of personal preference, and is going to depend on your goals. But there’s a potential danger in concentrating your portfolio in that in the event of a systemic financial crisis, both bonds and stocks could end up getting volatile. That happened both in 2008 and in 2022, and it could possibly happen again.
During the 2008 financial crisis, for instance, gold gained over 25% during the same period that markets lost more than 50%. That kind of countercyclical performance is why gold has been a popular asset with which to diversify asset portfolios.
Owning gold through a gold IRA can offer additional advantages to gold ownership. Here are two to keep in mind.
Because a gold IRA is a tax-advantaged account just like any other IRA account, it offers you tax-free asset growth. A Traditional gold IRA would purchase gold with pre-tax dollars, accrue gains tax-free, and you would pay taxes at distribution. A Roth gold IRA would purchase gold with post-tax dollars, accrue gains tax-free, and you would pay no taxes with a qualified distribution.
Another advantage of a gold IRA is that you could end up paying a lower tax rate when you own gold in a gold IRA versus owning gold outside an IRA. Gold held outside an IRA is subject to the tax rate on collectibles, which can run up to 28%. Gold held within an IRA is taxed at marginal income tax rates, which depending on how much income you make could be under 28%.
The tax-advantaged status of a gold IRA means that you can transfer or roll over funds from existing IRA, 401(k), 403(b), TSP, and similar retirement accounts into a gold IRA essentially tax-free. This can allow you to help safeguard your existing retirement savings by moving your existing assets into physical gold coins or bars.
Helping to safeguard your retirement savings doesn’t mean that you have to cash out of your 401(k) or IRA and take a big tax hit or subject yourself to potential penalties. With a gold IRA you can buy gold seamlessly with your existing tax-advantaged assets and don’t have to worry about paying taxes, as your wealth will remain in a tax-advantaged retirement account.
As with any other IRA account, a gold IRA is subject to IRS rules and regulations. These are the same laws and regulations that govern all other IRA accounts, but they’re especially important to know for a gold IRA.
No IRA account is allowed to own collectibles. Attempting to purchase collectibles with IRA assets would be considered a distribution of assets and would trigger potential taxes and penalties.
The tax code defines all coins and metals as collectibles, but makes a few important exceptions. These include a handful of coins produced by the US Mint, such as the Silver American Eagle and Gold American Eagle coins, as well as any coin or bar of gold, silver, platinum, or palladium that contains the minimum fineness needed to satisfy a futures contract.
For gold, this means that any gold coin that is at least 99.5% pure gold is IRA-eligible. So if you wanted to try to buy Krugerrands, Austrian 100 Corona, or Swiss 20 Franc coins for your gold IRA, you’re out of luck because their gold content is less than 99.5%.
Thankfully mints around the world produce numerous gold coins that satisfy that minimum fineness requirement. Goldco partners with many of these mints to bring you authentic IRA-eligible gold coins that you can purchase for your gold IRA.
As with all IRA accounts, a gold IRA must have its assets managed by a custodian. And because a gold IRA holds tangible physical assets that require storage, they must be stored at a bullion depository.
Goldco partners with established custodians and depositories who have significant experience in managing precious metals assets and keeping our customers’ gold holdings safe and secure.
If you’ve done any research about a gold IRA, you may have heard about something called a home storage gold IRA. This purports to be a gold IRA arrangement that allows you to purchase gold coins with pre-tax dollars and allows you to store them at home. If that sounds too good to be true, that’s because it is.
While it is perhaps theoretically possible for an individual to satisfy the requirements to be an IRA custodian, the bar is set incredibly high. Attempting to set up a home storage IRA based on something you may have read on the internet could leave you facing taxes and penalties.
Don’t fall for something that sounds too good to be true. Using established methods such as a gold IRA and working with reputable partners like Goldco can help keep you from putting your retirement savings at risk.
A gold IRA is subject to the same IRS rules and regulations surrounding distributions. This means that you’ll be required to start taking required minimum distributions (RMDs) once you turn 73.
Any distributions you take from a Traditional gold IRA will be subject to taxes, while qualified distributions you take from a Roth gold IRA will not be. You can take your distributions either in cash or in physical gold.
If you think that a gold IRA might be a good idea for you, now is the time to learn more. A gold IRA can be a powerful tool to help you safeguard your existing retirement savings and put your hard-earned wealth to use with precious metals.
Thousands of people have already made the decision to start a gold IRA and buy gold in recent years, trying to stay ahead of developments in the economy. They’ve taken the opportunity to help safeguard their assets while there’s still time.
Gold can be one way to help safeguard your wealth ahead of a potential recession, and a gold IRA can be one tool that can help you achieve your aims. The experts at Goldco have helped thousands of customers help safeguard their retirement savings with gold over the years, with over $3 billion in successful precious metals placements and over 6,000 5-star reviews from our satisfied customers.
Give Goldco a call today and find out how you can benefit from starting a gold IRA today.
This article was originally published in January 2023 and was updated in March 2025.
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DISCLAIMER: This site is general in nature and not tailored to the specific goals of any individual. Purchasing precious metals may 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. Customers should understand that all purchases have some degree of risk. Customers should make certain that they understand the correlation between risk and return. Commodities involve risk and are not suitable for all investors. There is no assurance that commodities, i.e. precious metals, will achieve their objectives. Return and principal value will fluctuate and your portfolio, when redeemed, may be worth more or less than the original cost. 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.
