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Storing gold in a retirement account is becoming increasingly popular for investors looking for a safe, secure and profitable way to save for their future. Investing in gold through a gold IRA is a great way to diversify your portfolio and protect your wealth against inflation.

With a Gold IRA, you can own and store physical gold in an account backed by a reliable custodian and insured by the government. In this article, you will learn all the details of where you can store your gold IRA, the benefits of investing in gold and the different types of accounts available.

What Is a Gold IRA?

A gold Individual Retirement Account (or gold IRA) is a type of self-directed retirement account that allows you to store physical gold in an account backed by a reliable custodian and insured by the government. Suppose you are unhappy with the returns on traditional investments, such as stocks and bonds. In that case, gold can be an excellent alternative to diversify your portfolio and hedge against inflation.

Gold in physical form is not permitted in a traditional IRA because it is an alternative investment. However, self-directed IRAs like gold IRAs are allowed to hold non-traditional investments as long as they comply with IRS regulations.

The government specifies in regulations where gold IRAs must be stored and what kinds of gold can be kept there. Gold IRA providers simplify the process of satisfying these guidelines and incorporating precious metals into your retirement investments.

Types of Gold IRA Accounts

There is a wide variety of IRAs, each with its own set of advantages for investors. One is more suitable than the other with respect to your financial situation.

Traditional Gold IRA

A Traditional gold IRA allows you to purchase gold and other precious metals with pre-tax dollars and defer taxes until you withdraw the funds. It also allows you to deduct your annual contributions from your taxable income, which can reduce your tax liability. However, you may be subject to a 10% early withdrawal penalty if you access your funds before age 59 ½.

Traditional gold IRAs are typically self-directed, meaning you can choose which metals you want to invest in, in what proportions and when you want to make changes to your investments. You can also use a custodian to help you manage your account.

Roth Gold IRA

A Roth gold IRA is funded with post-tax dollars and allows your investments to grow tax-free. You don't get any deductions upon contribution like you would with a Traditional gold IRA, but you can benefit from tax-free withdrawals when you retire. Plus, you're not subject to withdrawal penalties before age 59 ½.

SEP Gold IRA

This type of account is designed for self-employed individuals or small business owners, allowing you to contribute significantly more than other IRAs. With a SEP gold IRA, you also get the same tax advantages that a Traditional gold IRA offers, such as deducting your contributions from your taxable income.

This gold IRA allows you to contribute up to 25% of your income or $66,000 (whichever is less). This is an attractive option for those looking to maximize their retirement savings.

Where Is the Gold IRA Stored?

A Gold IRA is stored in a secure, government-approved depository. This is because the IRS requires that all precious metals held in an IRA be stored in a safe depository that is insured and meets certain requirements.

Your Gold IRA custodian will help you choose a depository that meets these requirements and will provide safe storage of your gold or other precious metals. The depository will also provide periodic statements to verify that your holdings are safeguarded and accounted for.

There are two types of storage that you can choose from.

The choice between segregated and commingled storage depends on your individual needs and preferences. The safety of the depository, the scope of insurance and the storage cost are also important factors to consider when deciding where to keep your precious metals.

Can I Have a Home Storage for My Gold IRA?

Advertisements for "home storage" gold IRAs are common if you've been researching about investing in gold or other precious metals like silver, platinum or palladium. Despite the attractiveness of the dealers' promises, you should exercise caution when dealing with them. These kinds of accounts are usually illegal and in violation of IRS regulations.

Many deceptive ads encourage the illegal practice of storing gold IRA in home storage. The IRS requires that all gold IRAs be stored in an approved depository. This is to ensure that the value of the gold IRA is protected.

Storing Gold IRA in home storage could mean loss of the value of the IRA, as it would not be insured or protected by the government. It also exposes you to potential theft and fraud. Additionally, keeping gold IRA in home storage is illegal and carries significant fines and penalties if caught.

What Is IRA Position About Gold IRA Home Storage?

While gold can be acquired and stored in a home safe, the Internal Revenue Service forbids doing so with IRA gold (and other precious metals). The categories of precious metals that can be purchased with a self-directed IRA are specified in Section 408(m) of the IRS code. It states that the items must be "in the physical possession of a trustee."

The IRS offered further clarification on the matter on their frequently asked questions page. "Gold and other bullion are "collectibles" under the IRA statutes and the law discourages the keeping of collectibles in IRAs," it states. Highly refined bullion held in the physical custody of a bank or an IRS-approved nonbank trustee is exempt from this rule.

The Industry Council for Tangible Assets, a trade group that monitors the IRA market, published a white paper in 2018 reiterating the ban on storing gold at home.

Adverts for "home storage" IRAs have contributed to widespread misunderstanding of gold IRAs. Though you can form an LLC and exercise personal control over your IRA purchases (subject to strict rules), you still cannot keep the gold in your home. A safe deposit box or similar depository established in the LLC's name is required.

Investors who don't follow the guidelines and retain their IRA-purchased gold at home may have to pay distribution penalties first. If you're under 59.5 years old and keep your gold at home, you'll have to pay a 10% penalty. Distributions from investments are not tax-deferred, so you must pay income taxes on the money you receive. It's usually a significant sum of money.

Furthermore, the action may trigger an audit of the IRA. You may be subject to an audit if the IRS discovers your suspicious account activity. The results of an audit could lead to further sanctions.

What Type of Metal Can Be Held in A Gold IRA Account?

The IRS has specific purity requirements for any precious metals that can be held in an IRA account. Gold must be at least 99.5% pure or 24-karat and coins must be legal tender in their country of origin. Acceptable gold coins include the American Gold Eagle, Canadian Gold Maple Leaf, Austrian Philharmonic and British Britannia.

In addition to gold, silver and platinum can also be held in an IRA account. Silver must be at least 99.9% pure and platinum must be at least 99.95% pure. Acceptable silver coins include the American Silver Eagle, Canadian Silver Maple Leaf and Mexican Libertad. Good platinum coins include the American Platinum Eagle, Canadian Platinum Maple Leaf and Australian Koala.

It is important to note that not all precious metal products are eligible for inclusion in an IRA account. Bars and rounds produced by an NYMEX or COMEX-approved refinery or national government mint, meeting certain fineness requirements, are the only bullion products accepted in an IRA. As such, it is important to research before investing in any precious metals for inclusion in an IRA account.

Where Can I Open a Gold IRA Account?

The best way to open a gold IRA account is to work with a trusted, experienced company that can help you understand the process and get started.

We have highly recommended companies that offer better services than most banks and financial advisors. We've researched to ensure you get the best possible service when opening a gold IRA account.

Our recommended companies provide you with a secure online account, access to an experienced team of specialists, education materials and competitive fees. Plus, they assist with setting up the account, purchasing metals, rolling over existing assets and more.

The experts at these companies are available to answer any questions about setting up a gold IRA account, so you can feel confident that you're making the right decision for your retirement. They can also help you decide which type of gold IRA account is best for you, traditional or Roth IRA.