Investing in gold is a great way to diversify your retirement portfolio and protect your savings from inflation. But when it comes to gold investments, there are certain restrictions that must be followed. The Internal Revenue Service (IRS) sets limits on the purity of coins and bars that can be held in a self-directed Individual Retirement Account (IRA). When it comes to gold coins or ingots, there are several gold product options to include in your IRA account.
Silver coins and ingots must be 99.9% pure, while platinum and palladium coins and ingots must have a purity of 99 or 95%. These limits are set to ensure that investors buy high-quality metals that will maintain their long-term value. Keep in mind that some coins may meet IRS purity standards, but not be eligible for an IRA because they are considered collectible. These include several popular ingot coins, such as the United Kingdom's sovereign coins, 20-franc gold coins, and U.
S. coins. If you buy ingots or rounds of gold, their value will closely follow the “spot price” of gold, which reflects the current market value of one ounce. If you wish, you can have your coins qualified once you've withdrawn and taken possession of them as an in-kind distribution.
A gold IRA should be kept separate from a traditional retirement account, although the rules governing aspects such as contribution limits and distributions remain the same. IRA-eligible coins, ingots and gold rounds must meet a series of requirements set out in the Internal Revenue Code in order to be kept in a self-directed IRA. While IRAs were once limited to holding American Eagle gold and silver coins, today IRAs can invest in gold, silver, palladium and platinum ingots and coins allowed by the IRS. However, to liquidate your gold for cash, coins may be easier to sell than small ingots.
Segregated storage is a form of storage in which your assets are kept separate from other gold or silver assets that are owned outside the IRA or that are owned by other people. The value of gold ingots and ingots is generally the same regardless of the manufacturer, although some people may prefer to buy them in certain mints. If a certification organization (such as the Professional Coin Rating Service) has rated any of the above coins or gold ingots that meet the requirements of the IRA, normally the IRS will define them as “collectibles” and, therefore, will not be allowed in IRAs. American Eagle gold bars and Proof coins are the only gold coins that are an exception to purity guidelines.
You might like South African gold Krugerrand coins, but you can't include them in your gold IRA.