Should I move my IRA to Gold? 3 Timing Mistakes to Avoid

One of the primary introductory questions when researching precious metals IRAs is, “Should I move my IRA to Gold?”.

It’s one that I take pretty seriously considering it’s a great introduction to my website – a website where we provide information on Gold IRAs, and also other precious metals.

So, in this article I wanted to give you a deep-dive on the topic so that you can make your most informed opinion.

I’ve also sprinkled in some links to other precious metals that you can hold in an IRA, like palladium and platinum.

For this reason you’ll find me using the term precious metals IRA rather than Gold IRA, in a few sections.

So, let’s start with a general definition.

Quick Disclaimer:

The content provided in this article is for informational purposes only and should not be considered financial or investment advice. Always consult with a qualified financial advisor before making any decisions regarding Precious Metals, investing, or IRAs. Additionally, this article contains affiliate links, and I may earn a commission if you make a purchase through these links, at no additional cost to you.

Another question, I have been asked is, “What Gold IRA companies are the best” or “Which IRA companies are the most trusted?”.

If you’d like more information, below is a link to a comparison PDF by Augusta Precious Metals that could be useful. (It’s also free.)

Augusta Gold IRA Company Integrity Checklist

Understanding Precious Metal IRAs

A precious metal IRA is a special type of individual retirement account that allows you to hold gold, palladium, silver, and other valuable metals.

Unlike regular IRAs that invest in stocks, bonds, or mutual funds, a precious metal IRA gives you the ability to invest for retirement using tangible assets.

According to Forbes, this type of IRA can be a great way to diversify your retirement portfolio.

What Can You Hold in a Precious Metal IRA?

The IRS has specific standards for the precious metals that can be included in IRAs. Some of the approved assets include:

• Canadian Maple Leaf coins
• Australian Koala bullion coins
• PAMP Suisse bars
• American Eagle coins

For more details on which metals are eligible, check out our article on what qualifies as precious metals?.

Benefits of Precious Metal IRAs

Investing in a precious metal IRA offers several benefits, especially for those looking to diversify their retirement savings and protect against economic volatility.

Wealth Protection and Risk Reduction

Precious metals like gold and silver are often considered safe-haven assets.

They can help reduce potential investment volatility and risk, serving as a hedge during economic downturns. This can be particularly beneficial during times of market instability.

Tax-Efficient Shelter for Potential Gains

Precious metal IRAs offer a tax-efficient way to shelter your gains.

The gains made within the account are not taxed until you take distributions, similar to other types of IRAs. This can provide a significant tax advantage for long-term investors.

Diversification

Most experts recommend investing no more than 5% to 10% of your retirement funds in precious metals.

This is because diversification is key to a stable retirement portfolio.

By including precious metals, you can balance the risks associated with more volatile investments like stocks and bonds. For more insights on portfolio allocation, visit our guide on how much of your investment should be in precious metals.

For more information on the benefits of these accounts, see our detailed article on what are the benefits of a precious metals ira?.

Understanding and acknowledging these benefits can help you answer the question, “should I move my IRA to gold?”

If you are looking for a way to diversify your retirement funds and seek stability in uncertain economic times, a precious metal IRA might be a golden opportunity for you.

Another common question I get asked about sales tactics used by Gold IRA companies is about how silver is leveraged and mentioned.

If you want to learn more, below are two free PDFs by Augusta Precious Metals that break down how to check the integrity of an IRA provider as well as information on how Silver is used as a sales tactic.

Augusta Precious Metals Links:

Considerations for Investing in Gold

Diversification in Retirement Funds

Diversification is a key strategy for managing risk in your retirement portfolio.

Precious metal IRAs allow you to hold gold, palladium, silver, and other valuable metals in a specially designed retirement account (Forbes).

This helps reduce potential investment volatility and risk by spreading investments across different asset classes.

Most experts recommend investing no more than 5% to 10% of your retirement funds in precious metals (Forbes).

This ensures that while you benefit from the hedge against economic downturns that precious metals provide, you still maintain a balanced portfolio.

For more tips on portfolio allocation, consult with financial advisors and visit our page on how much should you invest in precious metals?.

Historical Performance of Precious Metals

The historical performance of precious metals can provide insight into their potential as an investment.

Gold, for example, has been considered a store of value for centuries and often performs well during times of economic uncertainty.

However, it’s important to note that gold doesn’t generate regular income like stocks or bonds (LinkedIn).

Gold prices are also highly vulnerable to sudden changes in global economic conditions, influenced by factors such as the US dollar, market stress, and supply (LinkedIn).

This makes the returns on gold investments somewhat unpredictable.

For an in-depth comparison, you can read our article on gold vs. cryptocurrencies.

For more information on the potential drawbacks, visit what is the downside of a gold ira?.

Costs and Fees of Precious Metal IRAs

Investing in a precious metal IRA, particularly when considering moving your IRA to gold, involves various costs and fees that you should be aware of.

These fees make precious metal IRAs more expensive compared to traditional IRAs. Below, we explore the common costs associated with precious metal IRAs.

Setup and Transaction Fees

Setting up a precious metal IRA often involves a one-time setup fee, which can vary depending on the company you choose.

Additionally, each transaction, such as buying or selling precious metals, may incur a transaction fee.

These fees can add up, especially if you’re actively managing your IRA.

It’s essential to factor these costs into your decision-making process when considering if a precious metal IRA is a good idea.

Custodial and Storage Fees

Precious metal IRAs require a custodian to manage the account, and physical gold needs to be stored in an approved depository.

This incurs custodial and storage fees, which are typically charged annually.

These fees ensure the secure storage of your precious metals, but they do add to the overall cost of maintaining a gold IRA.

It’s crucial to compare these fees across different providers to find the most cost-effective option.

For more information on the potential drawbacks, you can visit our article on what is the downside of a gold IRA.

According to Investopedia, owning gold in a gold IRA comes with additional expenses, including higher maintenance fees and insurance costs.

It’s also worth noting that there may be potential markups on sales costs and an additional account closure fee.

When evaluating whether to move your IRA to gold, these costs and fees are essential considerations.

They might influence your decision and the overall profitability of your investment.

For more insights, check out our guide on how much a gold IRA costs.

Gold IRA Investment Disadvantages

Lack of Regular Income Generation

Unlike financial assets such as stocks, bonds, and mutual funds, gold does not generate regular income.

This makes gold less attractive for long-term investors seeking consistent cash flow.

Stocks, for instance, may provide dividends and bonds offer interest payments, but gold investments do not provide such benefits (LinkedIn).

Holding physical gold also incurs various fees and expenses, such as storage costs, which can impact your overall returns.

For those looking to maximize their income from retirement investments, this lack of regular income can be a significant downside.

For more detailed information on the disadvantages of a Gold IRA, visit what are the negatives of a precious metals ira?.

Vulnerability to Economic Changes

Gold prices are highly vulnerable to sudden changes in global economic conditions.

Factors such as the US dollar value, market stress, mining supply, and geopolitical events can greatly impact gold prices, leading to unpredictable investment returns (LinkedIn).

While gold often acts as a hedge against a falling stock market, its performance can be erratic.

This volatility can make it a risky investment if not properly managed within a diversified portfolio.

For example, from January 1971 to December 2019, gold had average annual returns of 10.6%, while in 2023, it had annual average returns of 13.8% (Investopedia).

To explore whether a Gold IRA aligns with your investment goals, check out should i move my ira to gold?.

Be sure to consult with a financial advisor to assess the best strategy for your specific financial situation. For more insights, read what is the downside of a gold ira?.

Choosing the Right Gold IRA Company

Augusta Precious Metals

Augusta Precious Metals is a top contender for those looking to open a gold IRA. They require a minimum investment of $50,000 and specialize in gold and silver, excluding platinum or palladium (USA Today).

Augusta Precious Metals is known for its comprehensive customer service and educational resources, making it a suitable choice for investors new to precious metals. Their strong focus on gold and silver ensures that they offer deep expertise in these metals.

Augusta Precious Metals Links:

For more information on whether a precious metal IRA is a good idea, visit our page on is a precious metal ira a good idea?.

Goldco and American Hartford Gold

Goldco

Goldco is another reputable company for gold IRAs. They have a lower minimum investment requirement of $25,000 and offer a buyback program, which provides flexibility in your investment (USA Today).

Goldco’s flexible investment options allow you to diversify within precious metals, which can be beneficial for your overall portfolio.

American Hartford Gold

American Hartford Gold, established in 2012, is recommended for smaller investments. They offer lower minimum investments and charge a 1% fee per transaction, making it accessible for a wider range of investors (USA Today).

American Hartford Gold is praised for its excellent customer support, providing peace of mind and assistance throughout the investment process.

For more insights on the downsides of a gold IRA, check out our detailed page on what is the downside of a gold ira?.

Choosing the right company is essential for a successful gold IRA investment.

Consider the minimum investment requirements, fees, and additional services offered by each company to make an informed decision.

For further details on gold IRA companies, you might want to visit what is the best gold ira company?.

Gold IRA Performance and Trends

Historical Gold Price Performance

Gold has historically been a valuable asset, often considered a safe haven during economic uncertainty.

Over the last few decades, the price of gold has seen significant increases.

From 1990 to 2020, the price of gold increased by around 360%, while the Dow Jones Industrial Average (DJIA) gained 991%.

However, over the 15-year period from 2005 to 2020, the price of gold increased by 330%, outperforming the DJIA, which increased by only 164% (Investopedia).

Gold prices have ranged from $255 per ounce in September 1999 to an all-time high of $2,075 per ounce in August 2020.

As of March 2023, gold was going for roughly $1,843 per ounce (Investopedia).

Gold works best as part of a diversified portfolio, particularly when it is acting as a hedge against a falling stock market.

Diversification is important in all investment portfolios, and investing in gold can help diversify a portfolio, especially during market declines (Investopedia).

For more insights into diversification, check out our article on is a precious metal ira a good idea?.

Gold vs. Cryptocurrencies

Since Bitcoin (BTC) emerged in 2009, it has greatly outperformed most other asset classes, including gold.

Bitcoin has risen from less than $1 to several thousands of dollars.

However, over the past two years, gold has outperformed cryptocurrencies due to the bear market that hit Bitcoin and other cryptocurrencies throughout 2022 (Investopedia).

While cryptocurrencies have shown remarkable growth, they are also known for their volatility.

Gold, on the other hand, is seen as a more stable investment, especially in times of economic uncertainty.

To explore more about the safety and stability of precious metals, check out how safe is a precious metals ira?.

Considering the historical performance and trends of gold can provide valuable insights into whether a gold IRA is a suitable addition to your retirement portfolio.

For further guidance, you may want to consult with financial advisors and read more about how to convert ira to precious metals.

Practical Aspects of Gold IRAs

Physical Possession of Gold

You cannot take physical possession of gold within your Individual Retirement Account (IRA) until you reach the age of 59.5.

Until then, the gold must be held by an approved depository under the administration of a qualified trustee or custodian to comply with IRS regulations (LinkedIn).

There are several key points to consider regarding the physical possession of gold in an IRA:

• Approved Depository: The gold must be stored in an IRS-approved depository to ensure the integrity and security of the assets.
• Qualified Trustee or Custodian: A qualified trustee or custodian must oversee the administration of the gold IRA to comply with IRS guidelines.
• Eligibility for Distribution: You can only take physical possession of the gold without penalties once you reach the age of 59.5. Before this age, taking possession could result in penalties and tax implications.

For more information on whether you can take possession of precious metals in an IRA, visit our article can you take possession of precious metals in an ira?.

Gold Purity and Form Standards

Gold IRAs require adherence to specific purity and form standards to ensure the integrity of the assets within the IRA and avoid potential penalties and tax implications. Here are the key standards you need to be aware of:

• Purity Standards: Gold held in an IRA must meet a minimum purity requirement of 99.5%. This ensures that the gold is of high quality and maintains its value.
• Form Standards: The gold must be in the form of bullion coins or bars. Specific coins, such as the American Gold Eagle, are often preferred as they are recognized and accepted globally.

Purity and Form Standards Table

For more details on the standards for gold in IRAs, check out our article on what precious metals are ira approved?.

Investors can also integrate gold into their retirement portfolio through gold exchange-traded funds (ETFs) or gold mutual funds within a Traditional, Roth, or Simple IRA.

This allows you to gain exposure to gold’s performance indirectly without dealing with the storage logistics or IRS regulations tied to physical gold in a Self-Directed IRA (SDIRA) (LinkedIn).

For guidance on choosing the right gold IRA company, such as Goldco, you can visit our article on what is the best gold ira company?.

Gold IRAs Info

Consultation with Financial Advisors

Consulting with a financial advisor is crucial when contemplating a gold IRA.

Advisors can provide personalized insights and help you understand the implications of such an investment.

They can also assist in aligning your investment strategies with your overall retirement goals.

A financial advisor will help you evaluate the pros and cons, such as the lack of regular income generation and the vulnerability to economic changes, ensuring that you are well-informed before making any decisions.

Additionally, they can guide you through the setup and transaction fees and custodial and storage fees associated with gold IRAs.

Portfolio Allocation Recommendations

Determining the right allocation of gold within your IRA is essential for maintaining a balanced and diversified portfolio.

Experts typically recommend that gold and other precious metals should constitute a small percentage of your overall investment portfolio.

This strategy helps mitigate risks while still benefiting from the potential appreciation of gold.

To learn more about how much you should invest in precious metals, visit our guide on how much should you invest in precious metals.

Factors to Consider

1. Economic Conditions: Gold often performs well during economic downturns. Assess the current economic climate and how it might impact your investment.
2. Retirement Timeline: Consider your retirement timeline. Gold investments may be more suitable for long-term goals due to their potential for value preservation.
3. Risk Tolerance: Evaluate your risk tolerance. Gold can be volatile, and understanding your comfort level with this risk is crucial (Investopedia).

It’s also important to consider the specific requirements for gold IRAs, such as gold purity and form standards and physical possession of gold.

For more detailed insights, read our article on is a precious metal ira a good idea?.