Last Updated on February 8, 2023 by Ben
Many people believe that gold is a safe investment. And for those who don’t want to purchase stocks or mutual funds, many are turning to invest in gold bullion as their retirement plan. But what type of gold can be purchased? The IRS only approves certain types of bars and coins when it comes to Individual Retirement Accounts (IRA). What are the approved types? Read on below!
Table of Contents
- Why is it Good to Hold Gold Bars in an IRA?
- IRS Requirements for Gold
- IRA-Approved Gold Coins
- Popular IRA-approved Gold Bars
- Gold Bullion Coins NOT Allowed in an IRA
- Investing in Gold Bars vs. Gold Coins
- Benefits of Investing in IRA-approved Gold
Why is it Good to Hold Gold Bars in an IRA?
You might be interested in a Self-Directed Precious Metals IRA. But not all gold, silver, platinum, and palladium bullion are allowed. If you’re considering an IRA as an option to invest in precious metals, the IRS only approves certain billions. Below is a list of approved gold, silver, platinum, and palladium bars and coin types for your Precious Metals IRA account.
IRS Requirements for Gold
The IRS lets the owner of a self-directed precious metals IRA have eligible precious metal bullion products inside an account that grant them tax benefits. This means that an investor can protect their money from inflation and make it grow faster. The person can also do this tax-free or tax-deferred. Here are the main eligibility requirements when it comes to gold bullion stored in IRAs.
- To be qualified for investing in an IRA, gold bullion must be at least 0.995 pure to qualify. A gold bar or coin must be at least 0.995% pure in order to be deposited into an IRA account.
- The gold that is being put into the IRA must be in an approved depository. It is a place where you can store precious metals for security. The IRS has approved only certain places to hold your IRA gold. Bullion dealers and brokers have one or more preferred depositories where they can put your gold.
- You must appoint a custodian as the trustee of your IRA. Investors typically purchase gold for their IRAs from a bullion dealer and then go through the process of setting up an account with the partnered custodian and depository. The investor needs to deal with just one company. This way, he can invest in a Gold IRA.
IRA-Approved Gold Coins
This is a list of some of the most popular gold coins that can be saved up in a retirement account.
American Gold Eagles
The American Gold Eagle has 91.67 purity, but the coin fundamentally only weighs 1.0909 troy ounces, so you’re guaranteed to get at least one full troy ounce of gold every time!
American Gold Buffaloes
The American Gold Buffaloes were the first 1 oz .9999-gold coin launched by the United States Mint in 2006. The Gold Buffalo quickly became a potential competitor to the Canadian Maple Leaf counterpart.
Australian Gold Kangaroos
These coins were first announced in 1987 by Gold Corp, an Australian company wholly owned by the Western Australian Government. Australian Gold Kangaroo coins are legal tender in Australia. They have been popular for the past two and a half decades and have remained a popular investment and collector’s item.
Austrian Gold Philharmonic
The Austrian Gold Philharmonic is recognized for its classic Musicverein design; it features a symphony of common instruments like the cello, harp, violin, bassoon, and french horn.
Canadian Gold Maple Leafs
Canadian Gold Maple Leafs purity and weight are guaranteed by the Royal Canadian Mint. You can purchase these coins in sets of 10 in the mint tube.
Canadian War of 1812 Gold Coins
The Royal Canadian Mint guarantees the weight and purity of these commemorative coins. These coins are being issued on the bicentennial of the War of 1812. The coins come in sheets of 20, or they can be bought individually.
Popular IRA-approved Gold Bars
Credit Suisse Gold Bars
These bars come from the Credit Suisse mint in Zurich, Switzerland. They are made of pure gold, and they meet minimum standards that say the gold must be 99.99%.
Johnson Matthey Gold Bar
Johnson Matthew bars come in a variety of denominations and are renowned for their high quality, making them an excellent choice for anyone interested in investing in gold. Johnson Matthey gold bars are assured to be made of at least 99.99% pure gold.
Valcambi Gold CombiBar
These pieces are made of 0.999% pure gold and are a tad separate into 50 1g minibars, providing an economic advantage that is detached in an instant.
Gold Bullion Coins NOT Allowed in an IRA
There aren’t many gold coins that you can use in an IRA. But the following list shows some of them. Avoid any bullion dealer that tries to talk you out of your precious metals IRA by selling you the following coins:
- Chilean 100 Peso Coins
- Dutch 10 Guilder Coins
- Chinese Panda Coins
- Israel Tower of David Coins
- French Napoleon Coins
- U.K. Britannia Coins
- Mexican Peso Coins
- Swiss 20 Franc Coins
- South African Krugerrand coins
- Somalia Elephant Coins
- Switzerland Vreneli Coins
- United Kingdom Queen’s Beasts Gold Coin
- United Kingdom Sovereign Coins
- New Zealand Gold Kiwis
- Peru Gold 100,000 Soles Miguel Grau (1979) and Peru Gold 1 Libra
- Dominican Republic Gold 30 Pesos (1955)
- Venezuela Gold 60 Bolivares (1955-1960)
- Guatemala 1/2 oz Gold Tecun Uman (1965)
Avoid all commemoratives, numismatics, and collector’s coins. These types of coins are sold at unnecessarily high premiums that make them a bad investment for the average person. Some salesmen will try to sell you special coins. They will say they are rare or that they are a special edition. Be aware of this, so you don’t buy them. In reality, many of them are overpriced. They will not be worth more than the price they were bought for.
You want to be careful when you’re making an IRA contribution, as non-approved metals will just get rejected by the depository. There are some minimum fineness levels for precious metal products that make them eligible, and not all of these meet those requirements.
Any products that are not in these ranges, excluding American Gold Eagles, are not approved for IRA contributions.
Investing in Gold Bars vs. Gold Coins
Gold is a great way to protect your wealth and purchasing power. It’s also not hard at all because there are so many different ways you can invest in gold!
It just depends on what kind of investor you want to be, but don’t worry – the choice is simple: it will depend on your individual investment goals and situation.
The best way to protect wealth while preserving the purchasing power of your money is by investing in gold. While other asset classes can be quickly negatively impacted because of events like war, recession, and inflation – gold tends to retain value or even increase in worth when everything else is dropping.
Gold bars are the best way to buy and store a lot of gold. They are usually the most economical option on account of their small premiums over the spot price and due to ineffectual design, freight, or other costs. This makes them much easier to stack and less likely to be counterfeit.
Gold coins are small and convenient, unlike gold bars, but they’re also harder to store because you can’t just stack them. Coins produce less efficiency when it comes to holding large amounts of metal, so some may come with a higher premium over spot if the coin is designed or rare.
Benefits of Investing in IRA-approved Gold
Investing in gold within a precious metals IRA can be advantageous for the retirement investor in multiple ways. The account is not dollar-backed, so that means the ongoing depreciation of the dollar will not endanger its value.
When the dollar decreases in value, many people turn to store their money in things that do not decrease in value. Gold is one of these things. When demand for gold rises, its price also rises.
Gold IRA investors can benefit from this clear and consistent correlation with the dollar. When the dollar is worthless, it means that gold is worth more.
Besides protecting a portion of your retirement wealth from the devaluing effects of inflation on paper currencies, investing in gold within an IRA also provides you with opportunities for a substantial return on investment. People think that gold will be worth more in the next ten years. Gold is a good investment and can get more money if you sell it. It might be best to buy gold now because it might not be available after 20 years.
Investing in a gold IRA is a great way to diversify your portfolio and can work as insurance on the rest of your investment. If you are looking for long-term performance, then adding at least a small part of your investments into precious metals like Gold or Silver should be considered.
In order to qualify for a Self-Directed IRA, your gold must be of the highest quality and meet specific requirements set by the IRS.