A gold IRA allows you to invest your retirement savings in physical precious metals, such as gold bullion and coins. Precious metals held in a traditional or Roth IRA can appreciate tax-deferred, until you make qualified withdrawals in retirement. However, a gold IRA can cost more to set up and manage than an ordinary IRA. Some companies may also charge extra fees for storage and insurance on the physical metals you purchase. It’s important to carefully research your options and to consider if the risks and benefits of holding physical metals are worth it for your unique situation. If you are considering a gold IRA, consult with a fiduciary financial advisor who does not receive commissions from the companies you choose to work with and can help ensure that you are getting unbiased advice and competitive prices.
Many people open a gold IRA to diversify their portfolios and protect their savings in the event of a stock market crash or high inflation. However, most experts say a gold IRA is not an effective way to grow your retirement savings because it doesn’t pay any interest or dividends and relies on capital appreciation to increase in value. Instead, Lambert suggests investing in a traditional IRA with a low-cost brokerage and using the money to invest in gold-focused ETFs.
If you decide to roll over some or all of your 401(k) balance into a gold IRA, be careful about selecting the custodian and depository institution for your account. In most cases, the IRA custodian will work with a specific precious metal dealer to buy your metal and then store it in their own IRS-approved depository. Because these are third-party entities, they may have different fees and costs than the IRA custodian you use for your other assets.
To avoid being overcharged, look for a company that clearly outlines all of its fees for the setup and maintenance of your account. Some of these costs include a one-time fee for opening the account and annual asset or transaction fees that are charged to your account, as well as any storage fees for the physical precious metals you purchase.
You should also be wary of companies that hide their fees behind high-pressure sales tactics and misleading marketing materials. You should only work with reputable gold IRA providers who offer transparent pricing and a solid reputation for excellent customer service.
The best gold IRA providers will offer upfront transparency about the fees you will face when you open an account, such as a recommended minimum investment and the charges for buying, selling and maintaining your metals. You should also consider how much storage fees you’ll be paying for the physical gold you purchase, and if these expenses are justified in light of your investment plan and time horizon. You can also compare prices and fees at a variety of providers, including those who offer a range of precious metals, educational resources for investors and high ratings from the BBB and Business Consumer Alliance.