What Are the Benefits of a Gold IRA?

IRA definition

The recent instability in the US banking system has gotten many Americans nervous about the safety and security of their finances. They’re beginning to realize that money in the bank isn’t necessarily as safe as they thought it was. Whether they’re moving their money into big banks, starting to open money market accounts, or buying gold, more Americans than ever today are starting to rethink their finances in order to protect themselves.

One increasingly popular method of protection is buying gold through a gold IRA. The gold price soared in the aftermath of the failures of Silicon Valley Bank and Signature Bank, as people sought the safety and security of gold. And if more bank failures ensue, it’s only natural to think that gold could continue rising in price.

If you’ve never bought gold before, or aren’t familiar with precious metals products, trying to get started with a gold IRA may seem a little daunting. But a gold IRA isn’t difficult to start, and it can give you many potential benefits.

What Is a Gold IRA?

If you don’t already know what a gold IRA is, it’s an individual retirement account (IRA) that owns physical gold coins or bars. Most people who hold IRAs or who know about IRAs know that IRAs can invest in stocks, bonds, mutual funds, and other similar commonly held financial assets. But relatively few people know that an IRA can invest in physical assets like gold.

Types of Gold IRA

There are two types of gold IRAs, and your decision to invest in either one will depend on your financial situation and financial goals.

Traditional Gold IRA

The more common type of gold IRA is a Traditional gold IRA. This type of IRA buys gold with pre-tax dollars. Gains are made tax-free and taxes are only paid when you take a distribution. As with any Traditional IRA, a Traditional gold IRA requires you to start taking required minimum distributions (RMDs) at age 73. Any distributions made before you turn age 59 ½ could incur a 10% penalty in addition to any income taxes you owe.

Roth Gold IRA

A Roth gold IRA is treated just like any other Roth IRA. It buys gold with post-tax dollars, gains accrue tax-free, and you don’t have to pay taxes when you take a distribution. You can withdraw contributions from a Roth IRA at any time, but earnings cannot be withdrawn until you’re age 59½ and you’ve had the account for at least five years, otherwise you will owe taxes. Once you reach age 59½ you can take distributions without having to pay any taxes.

Primary Benefits of a Gold IRA

A gold IRA can have numerous benefits. Let’s start with four of the most important ones first.


One of the most important benefits of gold and a gold IRA is its ability to diversify your investment portfolio. Gold is often considered to be a countercyclical asset, one that performs well even when the economy isn’t. As such, gold is often held to help protect assets against the possibility of loss in the event of a market downturn.

Safe Haven

Speaking of downturns, one of gold’s most important characteristics is that it serves as a safe haven asset during times of uncertainty and fear about the future. We’re witnessing that right now, as more and more Americans are trying to buy gold in order to protect their financial well-being and protect themselves against the prospect of growing weakness in the banking sector.

Inflation Hedge

Gold has also traditionally been viewed as a hedge against inflation, thanks to its ability to maintain its purchasing power over time despite high inflation. In fact, during the stagflation of the 1970s the gold price grew at an annualized rate of over 30% per year over the course of the decade, far outpacing inflation. If inflation today were to get as bad as it was during the 1970s, gold owners would certainly hope that gold might repeat that same strong performance.

Tax Advantages

Finally, one of the major advantages of a gold IRA is its tax-advantaged status. Many gold IRA customers choose to fund a gold IRA by transferring or rolling over funds tax-free from a 401(k), 403(b), TSP, IRA, or similar retirement account. This allows you to protect your existing retirement savings without having to distribute assets and take a potential hit from taxes and penalties.

Additional Benefits of a Gold IRA

The benefits of a gold IRA and investing in gold aren’t limited to what’s above. There are numerous other benefits that can come from investing in a gold IRA.

Universal Acceptance

Gold is an asset that is recognized around the world. India and China are the world’s largest consumers of gold. China and Russia are among the world’s largest gold producers, along with Australia, South Africa, and others.

Anywhere you go in the world, gold is recognized as a store of wealth and a safe haven. And every country has its own gold markets which cater to consumers and investors. This universal acceptance of gold makes gold one of the true universal assets.


Because of gold’s universal acceptance, there are gold markets operating around the world constantly. Gold is traded 24/7 around the globe, making it one of the most liquid assets there is. When the time comes to sell your gold, you’re almost guaranteed to find a buyer.

Gold’s liquidity does come with the occasional drawback. In 2008, for instance, gold lost about 30% of its value over the course of the year at the same time as markets were tanking. That’s because investors who needed to come up with quick cash were selling their most liquid assets to drum up money. Since gold is highly liquid, it was one of the first assets to get liquidated.

Thankfully gold turned around after that and went on to set record highs. But it’s a reminder that being such a liquid asset can sometimes be a double-edged sword.

Growth Potential

Gold isn’t just an asset that can help protect you during times of economic uncertainty. It’s also an asset that can help you even when markets seem to be doing well. Since 2001, gold has gained value at an annualized 9.39% rate of growth, versus 5.07% for the Dow Jones Industrial Average and 4.98% for the S&P 500.

Over the even longer term, since President Nixon closed the gold window in 1971, gold has edged out markets too, growing at a 7.70% annualized rate versus 7.19% for the Dow Jones and 7.40% for the S&P 500. This demonstrates gold’s ability to build wealth over the long-term, one of many reasons it has remained so popular as an investment asset.

Tangible Asset

In the modern financial system, most of the assets we have are digital. We may be able to go to the ATM and pull out some physical cash from our bank accounts, but most of our transactions are done digitally without ever touching physical assets.

While this is convenient for everyday life, there are times when people want the safety and security of something tangible. With digital assets held in bank accounts, retirement accounts, and brokerage accounts, it can sometimes feel like your financial well-being is nothing more than a house of sand.

Gold can help combat that feeling, as the gold you own in a gold IRA is a real, tangible asset. And when you decide to take a distribution from your gold IRA you can take that distribution in physical gold if you want to.


If you take physical possession of your gold, you’ll understand the advantages of gold’s portability. Gold is an incredibly compact store of wealth. You can hold hundreds of thousands of dollars worth of gold just in your two hands. And you can take your gold wherever you want.

With a gold IRA, you can protect your existing retirement savings by rolling them over or transferring them tax-free into a gold IRA. And in some cases you can even transfer that money back to your originating accounts, or transfer it into another IRA account. This can give you additional flexibility and can allow you to move your funds around as you see fit, investing in the assets you want to.


Like any other IRA, the assets in your gold IRA are managed by an IRA custodian. And because of the physical nature of your gold assets, your gold IRA assets will be stored at a bullion depository. This ensures that your precious metals assets will remain safe and secure.

Is a Gold IRA the Right Choice for You?

With over $1 billion in precious metals placements, Goldco’s representatives have helped thousands of customers benefit over the years from owning gold. If you’re interested in learning more about how a gold IRA can help you, call the experts at Goldco today.


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