Investing in Gold with a Self-Directed IRA

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If you own a self-directed IRA, you are basically the master of your investments. This is the best type of IRA you can have for precious metals investing (gold, silver, platinum, and palladium). Let's go over the basics of a self-directed IRA and how to invest in gold through it so you can be better prepared to diversify your retirement holdings if you so choose.


What is a Self-Directed IRA?

A self-directed IRA is an individual retirement account with its investments under the complete control of the investor. These types of accounts hold the same types of limitations when it comes to the amount of deposit per year and the withdrawal of funds: Investments in an IRA should be considered long-term.

Self-directed IRAs place the whole of the risk squarely on the individual to pick and manage investments. However, the freedom of choice gives the investor the potential to speculate as well as diversify without the limitations of other long-term accounts such as an employer-sponsored 401k. Self-directed IRAs can also be held in tandem with other kinds of IRAs.

What are the Investment Limitations of a Self-Directed IRA?

The reason that many people choose to invest with self-directed IRAs is because of the nearly unlimited investment freedom. The only things that a self-directed IRA cannot hold are also true of other IRAs – investments in insurance, S corporation stock, or collectibles.

However, IRA custodians will usually limit any IRA that is not self-directed to easily tracked investments such as publicly traded stocks, bonds, certificates of deposit, and mutual funds. There are also federal limitations on the amount of money that can be deposited into an IRA per year. There is no limit on the amount of money that can be made inside the vehicle, and self-directed IRAs have more speculative power than any other type of retirement account.

How Does One Invest in Gold Through a Self-Directed IRA?

Investors must be sure not to make investments that “benefit themselves” according to federal law. The transaction to purchase gold bullion must not be made through a personal check, and in some cases, must be made through a trustee-to-trustee transfer. IRA owners should have an IRS-approved depository ready to receive the physical bullion before making any payments and consider the fees that this depository will charge.

Once an invoice is sent from the gold seller, an IRA owner must authorize payment through the custodian. Delivery of the physical gold can take up to three weeks in some cases.

importantNOTE: Investing in gold through ETFs and gold mining stocks does NOT give you the same advantages as owning physical gold. If you want to take full advantage of gold investing and protect your overall IRA, it is a better idea to open a separate Precious Metals IRA and buy physical gold bullion coins and bars. Your precious metals can be stored securely by an accredited custodian, or can be shipped to you. To learn more about physical gold investing, contact a gold IRA company that specializes in Precious Metals IRAs.

What Type of Gold Coins is an Investor Allowed to Hold in a Self-Directed IRA?

allowed gold

An investor can hold gold bullion, gold coins, and bars as long as they meet two basic standards. The gold must be the official currency of a recognized public entity and it must meet a certain purity standard. In the United States, the purity must be 0.995%.

This standard is different for different countries, so research is necessary to determine the exact purity level that is necessary. The types of gold you can hold in your self-directed American IRA include:

  • The American Gold Eagle coin
  • The Canadian Gold Maple Leaf coin
  • The Austrian Philharmonic gold coin
  • The American Gold Buffalo coin
  • Gold Kilo Bars
  • Certain Gold Bullion Bars
  • Credit Suisse Gold Bars
  • Swiss PAMP Gold Bars

Request Your Free Gold IRA Kit to Learn more

Investing in precious metals through a self-directed gold IRA can be a tricky process. It has to be carried out the right way, or you might get on Uncle Sam's bad side and trigger a tax event.

Since we cannot possibly cover everything you need to know about this process on this page, we highly recommend that you request your free, no-obligation Gold IRA Investment Guide from a reputable gold IRA company.

FTC Disclosure: We are an independent blog that aims at providing useful information for retirement account owners interested in alternative assets like precious metals. However, our content does NOT constitute financial advice. Please speak to your financial advisor before making any investment decision. Also, the data quoted on this website represents past performance and does not guarantee future results.


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