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Note: Recent U.S. court cases have found that any form of gold home storage is ineligible for inclusion in an IRA. This article is outdated and meant for informational purposes only. The article below was originally written in 2016.
The current war between Ukraine and Russia, as well as the broader geopolitical situation between the West and Moscow, has brought uncertainty and volatility to the global economy. Because of this turbulence, many savvy investors have turned to gold as a hedge against economic uncertainty and instability.
Historically, gold and silver have proven to be good investment options in small percentages of a diversified portfolio. However, the question that arises is where to safely store your gold investment. In this article, we'll look to the experts to chime in about home storage for your gold IRA, including its respective drawbacks and benefits.
Holding Physical Gold At Home Is Risky
“Holding physical gold at home is risky even though it feels safe. Gold at home can be misplaced or stolen. Even safe deposit boxes have been robbed or destroyed in disasters. It's cheap to own a gold fund or ETF. If you're holding gold as a hedge to chaos in the world and collapse of the government, maybe have a few coins handy to barter, but a case of whiskey might be just as good and a lot cheaper.”
Scot A. Millen, AIF(r), MBA, Director of Investments, Brightworks Wealth Management
Gold Is A Great Choice in 2022
“I think storing your gold at home is a much better idea than having it stashed in some off-shore location in South East Asia or on some tropical island in the Caribbean. Not to mention the liquidity issues with having to fly across the world to fetch your precious investment. When you have your gold stored in a safe at home, it will be accessible when you need to cash in, at all times.
Regarding the safety of home gold storage, I wouldn't worry about gold bars being physically stolen nowadays. If a break-in happens, chances are they will take your flat-screen TV, tablets and other smart devices before they try to break through a safe to haul kilos of gold away!
Gold is a great choice going into 2023, where everyone is investing in cryptocurrency. Having solid gold bricks that are immune to inflation is a great investment to make if you don't mind extra precautions you need to take for storing it at home. It's more discreet and less likely to get stolen compared to large bitcoin mining equipment and tech that is more valuable at a glance.
Just make sure to buy a good quality safe to store it in that is ideally bolted to the wall, in your basement or attic. You could always build a trapdoor, put it in a crawlspace or dig up a hole in the garden, or somewhere creative for more peace of mind.”
Igor Mitic, Co-Founder, Fortunly
Gold Should Never Be Held In Home Storage Unless You Live In Ft. Knox
“Absolutely not! For security reasons alone – Unless you have an insurance company that is willing to insure your IRA, including both the full replacement value of the gold being stored in your home and willing to cover it as an asset held inside of an IRA, the cost of storing your gold in a safe deposit box (or with an insured custodian) is a small price to pay for security and peace of mind.
Actual Client Story:
We have a client who had a fair sum of gold, silver, coins and other valuables in a safe within his home, which was also protected by a security system. While he was away, his home was burglarized and his entire safe (the actual safe along with the contents) had been removed from the property. The gold and coins were not covered under his homeowner's policy above the $200 cash limit. If these assets had been included in his IRA then he would never have been able to retire.
Whether or not it is being held within an IRA, gold should never be held in home storage unless you live in Ft. Knox, have armed guards securing your home or have an insurance company who is willing to insure the full replacement value of the gold.
Our client will not go on record and did not hold gold in an IRA. We were not aware of these valuables prior to the robbery. Please note that Place Trade does not custody physical gold and does not offer insurance products.”
Sarah M. Place, President and CEO, Place Trade Financial
Home Storage For A Gold IRA Is Not Allowed Under The Strict Rules Of A Self-Directed IRA
“Home storage for a gold IRA is not allowed under the strict rules of a self-directed IRA. According to IRS regulations, gold can only be purchased by an IRA provided it is in the physical possession of a bank or an IRS-approved nonbank trustee. If you were to store the gold in your home, it would be considered an IRA distribution and taxable if it was a traditional IRA.”
Vincenzo Villamena, Managing Partner, Global Expat Advisors
There Are Advantages And Drawbacks
“Storing gold at home is good due to these reasons:
- Easy access: When you have your gold at home, it’s practically easier to access it at any time you want to.
- It’s cheap: It costs relatively low to have your gold secured at your home.
Here are the cons of storing gold at home:
- Low security: It becomes hard to provide enough security for your gold at home hence, putting it at risk of theft.
- An appraisal will be required during selling: When it’s time to sell your gold, it will have to be assayed. This would, in turn, trigger extra charges.
Storing gold in a third-party vault is the other option and perhaps the safest. Below are some of the advantages:
- Great security: Paying for vault storage is the most commonly used method since it offers optimum security for your gold.
- It's hassle-free: After providing the required payment by the third party, you have the freedom to concentrate on other matters and pay less or no attention to your gold.
The possible drawback of having your gold stored by third parties is that you won’t have easy access to it compared to when you’re having it at home.”
Stella Samuel, Team Manager, Brandnic.com
Is Home Storage Still on the Table in 2022?
In short, gold IRAs cannot utilize home storage. On this particular issue, there is no ambiguity or “legal gray area”, since the U.S. high courts have been very clear on this matter since 2019. Any gold held at home cannot be included in an IRA or 401(k), point-blank.
However, that's not to say that you cannot store gold at home. However, if you do, you will be giving up on the tax advantages of your IRA in the process. Any gold held at home is subject to taxation like any other asset which, to my mind, is the greatest drawback to be aware of when investing in gold.
On the whole, investing in gold is an excellent diversification strategy to hedge against economic uncertainty. That’s why investing in gold through your IRA makes perfect sense. However, if you do choose this investment option, it’s crucial to first be aware of the gold IRA rules and regulations. For those investors who are interested, have a look at the top gold IRA companies for more information about the space.