Gold has long been viewed as a strong asset in the United States, helping investors hedge against market fluctuations while maintaining control of a notably liquid asset. It makes sense, then, that savvy retirement savers would be curious about adding gold to their portfolio.

Self-directed IRAs make the process of investing in gold much easier, allowing you to own stocks, futures, and physical bullion.

We’ll help you understand how to invest in gold with your IRA and what you need to know before you add this sought-after precious metal to your IRA portfolio.

Types of Gold Investing

Thanks to the freedom of a self-directed IRA, there are several ways you can leverage gold as part of your retirement strategy. Here are the most common types of gold IRA investing available.

  • Physical gold, such as bullion bars and coins that are at least 99.5% pure.
  • Gold ETFs, or exchange-traded funds, hold assets backed by gold.
  • Gold options, or financial derivatives, provide the option to buy and sell gold at a specific price (strike price) or before a certain date.
  • Gold futures, or contracts for gold commodities.
  • Gold stocks and mutual funds which are basic investment vehicles that allow you to invest in entities backed by gold.

Many of the options don’t require any specific type of IRA. For instance, you can invest in gold stocks and mutual funds with a standard IRA. However, if you want to invest in physical gold, you must open and maintain a self-directed IRA (SDIRA).

Pros and Cons of Gold Investing for Retirement

Tax advantages with the option to choose between Roth or traditional tax structure.Higher fees when compared to other investment assets
Stability and portfolio diversification to improve long-term account growth despite market challengesStrict IRS restrictions that limit the types of gold you can hold in your IRA account
Liquidity that makes it easier to take advantage of other timely investment opportunities.


Tax advantages

Like any other SDIRA investment, gold investments grow tax-free while in the account. That means you can purchase and subsequently sell gold held in your account for a profit, and those profits won’t be taxed as long as they go directly back into the IRA account.

If you have a traditional IRA, taxes will be applied once you make a qualified withdrawal. If you have a Roth IRA, taxes are applied upfront, and qualified withdrawals are tax-free.

Stability and diversification

Precious metals, including gold, are often seen as a way that savvy investors can hedge their bets against inflation, offering a way to diversify your portfolio without exposing your account to substantial risk.


Gold is considered a liquid asset, which means it’s easier to convert it to cash when compared to other assets. This can be a benefit if you want to move money around in your IRA to take advantage of another timely investment opportunity.


High fees

Be aware of common fees like transaction fees, annual account fees, and storage fees if you’re investing in physical gold.


The IRS specifies what types and forms of gold can be kept in your IRA. For instance, gold bullion must be of a “certain finesse,” and only certain government-issued coins, such as those specified in 31 USC Section 5112, may be held in an IRA. If the gold you invest in does not meet the requirements, you may face a penalty until this issue is rectified.

When you invest in tax liens, earnings come from the interest applied to the lien

How to Invest in Gold with a Traditional or Roth IRA

Unfortunately, many retirement plans restrict your ability to invest in gold.

For instance, only ETFs, stocks, and mutual funds can be purchased with a standard Roth IRA or Traditional IRA.

However, if you want to invest in physical gold, you must open a self-directed IRA. This also may be a beneficial option if you intend to picture gold futures, as it allows for complete control over your investment decisions.

What Is a Self-Directed Gold IRA?

A self-directed gold IRA is a type of individual retirement account that extends investment options to include alternative assets, like gold and other precious metals. When you open a self-directed gold IRA, control over your investments moves from the IRA broker to you, the account holder.

When you open a self-directed IRA, you must choose a custodian. They oversee the administration of your account, but asset selection, including when and how you want to invest, is entirely up to you.

How to Set Up a Gold IRA

Setting up a gold IRA is fairly straightforward and only requires knowing the rules governing self-directed IRAs and gold investments.

 1. Decide on Gold Investments

The first step to setting up a Gold IRA is to determine what type of gold asset you want to invest in. Doing so can help you select an appropriate IRA and custodian. Be sure to perform due diligence by thoroughly researching your options and determining which option(s) best fit your investment goals, budget, and risk tolerance.

 2. Choose the Appropriate IRA

When you choose an IRA, standard or self-directed, you’ll need to decide what type of IRA to open. Commonly, this means choosing between a traditional IRA or a Roth IRA.

Both offer tax-free growth while your funds are in the account. However, contributions to a traditional IRA are made with pre-tax funds. You’ll pay taxes when you make qualified withdrawals in retirement.

Roth IRAs allow for post-tax contributions and tax-free withdrawals.

Generally speaking, a Roth IRA may be a better option if you think you’ll be in a higher tax bracket upon retirement, whereas Traditional IRAs are often more desirable if you think you’ll be in a lower tax bracket when you retire.

The tax structure isn’t the only consideration to keep in mind, however. For instance, though both types adhere to basic contribution limits set by the IRS, Roth IRAs have additional limits based on your income, some of which may limit your ability to contribute based on your tax filing status and income.

If you’re unsure which type of IRA is best for you, speak with your custodian or a financial professional. They can review pertinent information about your earnings and tax status and help you choose an IRA that aligns with your needs.

 3. Find the Right Account Administrator

If you’re investing in physical gold or other types of gold assets that can’t be held in a standard IRA, you’ll need to choose a custodian. An SDIRA custodian can’t offer investment advice or help you select assets, but they are responsible for administrative responsibilities as well as ensuring that transactions comply.

Because the IRS sets specific rules and regulations around IRA assets, especially those specific to SDIRAs, it’s wise to choose a custodian who is familiar with your chosen asset, in this case, gold.

 4. Research Rules and Prohibited Transactions

As mentioned above, multiple rules govern IRA investments. Not adhering to these rules or participating in prohibited transactions can jeopardize your investment and leave you paying penalties.

A thorough review of the rules is wise, but here are a few major ones to keep in mind:

  • If you’re investing in physical gold, it must be kept in an IRS-approved depository, not your home or any other location.
  • Disqualified persons, which include you, your descendants, and your custodian, cannot directly benefit from the income or assets. For instance, you can’t purchase gold directly from your parents and pay them with funds in your IRA.
  • Gold assets must meet purity requirements as outlined by the IRS.
  • If you sell gold held in your IRA, earnings must return to the IRA account.

 5. Fund Your Account

Once you choose a custodian and open your account, you must fund the account if you want to purchase assets. There are several ways you can fund a gold IRA, including:

  • Direct rollover, where you move funds directly from one retirement account, such as a 401(k) or a standard IRA, into your new Gold IRA account.  You can even rollover a TSP to a gold IRA directly if you’ve served in the military.
  • Indirect rollover, or 60-day rollover, is when you withdraw and take custody of funds from a retirement account and then deposit them into the new account within 60 days. Failure to complete this transaction within 60 days will result in taxes and potential penalties.
  • Contribute funds by moving money from another non-retirement account, such as a checking or savings account, into the new account. If you use this option, the amount you contribute will count towards your annual contribution limit, so be conscious of the most current IRS contribution limits.

Remember that the IRS limits how much you can contribute to your IRA each year. The 2023 limits are $6,500 annually or $7,500 if you’re 50 or older.

 6. Invest in Gold

Once your gold IRA is set up and funded, you can work with your custodian to find a reputable gold dealer and make a purchase. You’ll need to store the gold in an IRS-approved depository, and a custodian familiar with this type of alternative asset can help you find one.

FAQs: Self-Directed Gold IRA

Are gold IRAs legit?

Yes, gold IRAs offer a legitimate way for investors to hold gold and other alternative assets in their retirement accounts. Gold IRAs are overseen by custodians who are regulated by the SEC and must follow IRS rules and regulations.

Can I cash out a gold IRA?

Though you can cash out a gold IRA, it’s best to wait until you reach age 59 ½. Cashing out and withdrawing from funds before that typically results in penalties.

How do I convert my IRA to gold without penalty?

You can avoid penalties while converting your IRA to gold by working with a custodian and ensuring that the transaction adheres to all IRS regulations. For instance, if you are completing a rollover to fund your gold IRA, you must ensure that the funds either move directly from one account to another or, if taking possession of the funds, that they are deposited into your new gold IRA within 60 days of withdrawal from your original IRA.

An experienced custodian, like Horizon Trust, can work with you to ensure that your account meets IRS regulations and the conversion is completed without penalty.