Can I Invest in Gold Through My 401k

By | June 23, 2022

How can I hold physical gold in my IRA? What are some of the basic rules that I ought to know before opening the gold IRA? Is investing through a gold IRA easy? If you are trying to navigate the gold IRA investing world and have all these and more questions in mind, then you are in the right place because, in today’s article, we shall cover what you need to know as you get started. Read on to find out more:


Gold is a finite and tangible resource that has gained popularity amongst IRA investors who are out to protect their wealth. Since it is a hard asset, gold cannot be printed like paper money hence it is not subject to dilution and devaluation. Also unlike stocks, the value of gold is not subject to splits and mergers and is not at the mercy of financial institutions.

Historically, gold has been observed to move in the opposite direction of stocks, bonds, and mutual funds. Beyond that, gold and other precious metals tend to experience positive growth during events such as downturns in the stock market, the decline of the U.S. Dollar, terrorism and war, inflation, and deflation.

As such circumstances have always led to investors shifting from paper assets and stocks,  gold can end up benefiting those who purchase it and invest in it through a defined investment structure such as an IRA. Gold is in most cases viewed as a safe haven and a hedge against disaster.

Can I buy Physical Gold using my IRA?

Yes. Not any type of IRA will do, however. You need to have a special IRA known as a gold IRA. Investing in gold through this type of account is easy, but there are some rules that you should uphold for you to have an easy time. Upon deciding that you want to invest in precious metals as your plan for retirement, then you ought to also determine how much you will invest. The amount you invest is dependent on  several factors, including:

  • Your annual contribution to your Gold IRA
  • Personal investment goals
  • Individual investment philosophy
  • Age to retirement
  • All your assets
  • Risk tolerance

Upon determining that investing in gold is a viable option for you, you can then fund it using any of the IRS-approved approaches.

Read:  Does Usaa Invest in Fossil Fuels

Which type of physical gold can I hold in my IRA?Gold IRA Vs Physical Gold

Investing in gold through a gold IRA is easy, but that does not mean that you take off your gold chain or rings and deliver them to a gold IRA company. To use a gold IRA to invest in gold, you ought to follow the rules set by the IRS, which include, investing in IRA-approved gold, and holding the gold in the right way.

You are only allowed to invest in investment-grade gold, or highly refined bullion, which generally has the following properties:

  • It is 99.5% pure.
  • Comes in its complete original packaging
  • Has to have a certificate of authenticity
  • If they are coins, they must be uncirculated and free from any damage.
  • Bars should weigh the same weight stamped on them.
  • All products should be sourced from a company that is nationally accredited.

As the owner of the gold products, you cannot hold any IRA-approved gold in your possession, if you are investing them through your gold IRA. They ought to be stored in an IRS-approved depository. You can request your gold IRA custodian to recommend to you a number of suitable depositories to hold your investments.

With the list in your possession, all you need to do is do your research, and determine which one has a track record of performance and is safe enough for you to hold your precious metals in it.

Does the IRS allow investors to store the gold they purchase through an IRA by themselves?

Yes. This can, however, happen under one condition- that you are over 59.5 years and you are ready to make a withdrawal. If you are not ready to take withdrawals, then you should let the gold remain in an IRS-approved depository.

Upon hitting the legal retirement age, you can take possession of your gold bars or coins, and store them as you please. You can also liquidate your gold holdings and withdraw their cash instead.

N.B: Investors who want to leave an inheritance for their children or grandchildren in the form of physical gold assets should consider opening a Roth Gold IRA since they won’t be necessitated to start taking withdrawals (required minimum distributions) upon hitting 72 years.

Read:  How to Invest in Voluntary Carbon Market

How do I fund my gold IRA so that I can get started with investing in gold?

To begin investing in gold through a gold IRA, you will need to choose your preferred custodian. Gold IRA custodians are companies that manage gold IRAs and ensure that the account owners comply with the rules set by the IRS. Upon setting up your gold IRA, you have the liberty to fund it through one of the following ways:

  • Cash
    – you can simply send a check or wire payment to your gold IRA custodian, and you are set to begin investing. Note that you can only deposit $6000 per year into your gold IRA ( or $7000 if you’re over 50 years)

  • A gold IRA rollover
    – You can also withdraw the funds in your retirement account and ensure that you deposit them into your newly created gold IRA within 60 days of the withdrawal. Failure to meet this deadline will lead to penalties.

  • Gold IRA transfer
    – An investor is also allowed to leave the movement of their funds from their existing IRA/retirement plan to their gold IRA, to the custodians of the retirement plans. With this approach, you are required to contact the custodian of your existing IRA to let them know that you intend to transfer a given amount of money to a gold IRA. The custodians will get in touch, and facilitate the transfer

Frequently asked questions on “ How can I hold physical gold in my IRA?”

1. Can I use my traditional or Roth IRA to hold physical gold?

No. The IRS does not allow investors to hold alternative assets in their regular IRAs. Anyone who wants to hold gold or other precious metals in their account must open a self-directed IRA. Usually, a self-directed IRA gets named after the main asset that the custodian in charge supports. A self-directed IRA with which investors are mainly allowed to invest in gold is referred to as a gold IRA. You should confirm whether your gold IRA also allows investors to use their IRAs to invest in assets such as real estate, cryptocurrencies, agricultural land, etc.

2. Which gold coins can I hold in my gold IRA?

Not all types of gold coins meet the requirements set by the IRS pertaining to the type of assets that one can hold using their gold IRA. You need to ensure that you do not end up with collector coins in your account since these are prohibited from use in a gold IRA.

Read:  How Do I Invest in Cryptocurrency Stock

Read more about IRA-approved gold coins here.

3. Is it expensive to hold physical gold in a gold IRA?

Depends. If you turn to a gold IRA custodian who charges exorbitant account opening and maintenance fees, then you may end up spending a lot of money unnecessarily. There are many gold IRA custodian options in the gold IRA industry, so you need to take your time to choose the one that offers the best deal when it comes to the fees and charges. You also need to be aware that you may have to pay storage fees either on a monthly or yearly basis. The fact that you have to pay gold storage fees means that a gold IRA  may be more expensive to own than a regular IRA.

 4. Will I pay taxes for holding physical gold in my IRA?

Yes. With a gold IRA account, however, you will have immediate or tax-deferred benefits. If you open a traditional gold IRA, then you will not pay taxes on your contributions, but on your withdrawals during your retirement years. With a Roth Gold IRA, you will be required to pay taxes on your contributions, so that you can take tax-free withdrawals.

Thank you for making it to the end of this post in which we have addressed the question “ How can I hold physical gold in my IRA?” I hope you found it helpful, and that you now know how exactly to go about owning the shiny metal through a gold IRA. If you have any questions or insights about today’s post, drop them in the comments section so that we can interact with each other and expand our knowledge on gold IRA investing.

I wish you well,

Eric, Investor and Team Member at Gold Retired!

Can I Invest in Gold Through My 401k


Posted by: