Ever since the Financial Crisis of 2008, gold has become an increasingly popular investment choice. Investors often view gold as a safer investment than stocks, and it can protect them from inflation.
A gold individual retirement account (IRA) is a self-directed IRA, but instead of holding stocks or mutual funds, you invest in gold and other physical precious metals. Setting up a gold IRA can be confusing, and there are several steps you need to take.
One of the reasons for this is that you need to find a trustworthy company to handle your investment. Choosing the right gold IRA company is a crucial first step because picking the wrong one can cost you time and money.
11 Best Gold IRA Companies
If you’ve never bought gold before, you may be a little unsure of where to start. Listed below are nine of the top gold IRA companies to consider.
Patriot Gold Group, founded in 1990, is a reputable company in the gold investment industry. As a certified Professional Coin Grading Service (PCGS) company, it follows strict standards for coin evaluation, assuring customers of the quality of the precious metals they purchase.
Gold Alliance Capital specializes in gold and silver IRAs. The company can either help you set up a gold IRA or buy physical precious metals outside an IRA.
Augusta Precious Metals is a reputable gold IRA company with nearly 50 years of experience. It’s a family-owned gold IRA provider that is service-oriented and trusted by thousands of Americans.
APMEX is the largest online precious metals dealer and offers more than 10,000 items.
American Hartford Gold is a distinguished dealer in the precious metals industry, holding high ratings from both the Better Business Bureau (BBB) and the Business Consumer Alliance (BCA).
Lear Capital has established itself as a frontrunner in the precious metals investment industry since its inception over two decades ago.
Birch Gold Group has been serving customers since 2003. They help individuals buy precious metals and set up gold IRA accounts. Birch Gold Group sells gold, silver, platinum, and palladium for personal storage or precious metals IRAs.
Advantage Gold has been in the precious metal trading industry since 2014. They offer low minimum investment requirements, making them ideal for those just getting started.
Swiss America was founded in 1982 and offers a wide range of precious metals for investment. Their inventory includes gold, silver, platinum, and palladium bullion and coins.
Founded in 2009, American Bullion offers a full suite of precious metals investment options, including gold, silver, platinum, and palladium.
Pros and Cons of Opening a Gold IRA Account
Having an IRA account opens you up to a wide range of benefits. Among them are protection from unforeseen future circumstances like political instability, inflation, and uncertain market conditions. Let’s take a look at some pros and cons of gold IRA investments.
Pros of a Gold IRA Account:
An IRA account is exempt from taxes until you withdraw your funds. When you invest money in a gold IRA, you are also exempt from paying taxes on any gains. This means that if the value of your investment increases, you do not have to pay any additional taxes.
Disaster Insurance for Your Portfolio
Gold IRAs offer disaster insurance for your portfolio in case of unforeseen events that could damage or completely wipe out your investment. The purpose of such insurance is to help protect you and your finances against any potential disasters.
The best gold IRA companies provide this type of insurance free of charge as a part of their services. This is just one more way that they work to protect your investments and help you maintain peace of mind.
With a gold IRA, you own and have complete control over it. You can choose what you want to invest in when to take a profit, and what the terms of your investment will be. Most gold IRA providers offer a variety of investments in different types of metals, such as gold, platinum, and silver. Some also offer to hold gold coins or gold bullion.
In addition to being an investment, gold can also be used as a hedge against inflation and market volatility. It is considered one of the safest investments during economic crises. At the same time, diversification reduces your portfolio’s risk while increasing its potential gain.
Cons of a Gold IRA Account:
Not for People Looking to Get Quick Profits
Sadly, gold IRAs are not suitable investments for people looking for fast profits. In reality, gold IRA companies are only suitable for long-term investors. This is because the fees associated with buying and selling gold are so high that you would barely make any profit in the short term.
Gold IRAs Don’t Pay Interest and Dividends
For most investors, the primary reason for investing is to earn interest and dividends from their investments. But when it comes to investing in gold, that is not the case. If you are an investor in gold, you can only hope that your gold holdings will appreciate over time.
You Are Not Allowed to Inventory Your Gold Holdings Physically
While you’re purchasing physical gold, gold IRA companies do not physically allow clients to manage their gold holdings. Clients are only informed of which depository their holdings are stored in. You will need to go through the company holding your investment assets if you want to verify their existence.
Premiums and Fees
Most gold IRA companies charge fees and premiums. This additional expense is required for the physical storage of your investment. Storage fees vary from company to company. Additionally, some gold IRA providers charge additional commissions for each transaction, decreasing your purchasing power.
Things to Look for in a Gold IRA Company
Choosing the best gold IRA company is crucial for protecting your investment and making the most of your time and money. But it’s hard to know what you should be looking for if you’ve never bought gold before.
At the end of the day, you’re going to have to listen to your gut and choose the company you believe will be the best fit for your goals. But here are a few things to look for in a gold IRA company:
Ease of Setup
When you’re looking to find the best gold IRA company for you, ease of setup is a natural place to start your evaluations. There are companies out there who strive to make the setup process as easy and stress-free as possible. The best will have you set up within a few days or less, while offering expert assistance from investment professionals.
All the gold IRA companies we’ve featured in this article feature easy setup processes.
Setup charges, storage fees, and annual fees
When choosing a gold IRA custodian, one of the first things to consider is whether they charge a flat-rate or sliding scale fee. You’ll also need to know how much the setup fee, storage fee, and the annual fee is. All of these fees can increase the cost of opening and owning a gold IRA.
Diverse Precious Metals Investments
Diversification is a huge factor for those investing in a gold IRA. Taking that one step further and including other precious metals is a popular option for many. However, not all companies offer diverse precious metals IRAs.
Some companies only offer silver and gold coins, while others offer customers the chance to invest in precious metals including platinum and palladium. If investing in physical precious metals beyond gold and silver is important to you, you’ll want to keep this in mind.
Depending on your investment strategy, having some kind of buyback option might be important to you. Furthermore, if you’re unsure about how to invest in a precious metals IRA, you’ll want to work with a company that offers potential buybacks. In a nutshell, buybacks offer customers the chance to sell their investments back without incurring additional fees.
The best gold IRA companies try to make the buyback process transparent and hassle-free.
Anyone can set up a website and call themselves a legitimate business, so you’ll need to do a little extra digging. Check to ensure that the company is licensed before doing business with them.
Length in business
Just because a company is new doesn’t necessarily mean you should exclude them as a possibility. But more time in business does mean that the company has helped more customers, so it’s worth considering.
It’s always helpful to see how other customers rate their experience with a particular company. Check the Better Business Bureau or Business Consumer Alliance to see what kind of customer service rating the company has, and any complaints lodged against it. A Better Business Bureau (BBB) rating lower than a B is generally a cause for concern.
Finally, when searching for the best gold IRA company, you need to know about their reputation in the industry. Are they known for customer education and transparency? If not, then you may want to stay away.
How to Invest in a Gold IRA
Despite the complex nature of setting up a gold IRA, top-tier firms are dedicated to simplifying this process for their clients. Here’s a step-by-step overview to help you understand what to expect:
Step 1: Registration
Choose a reputable company that specializes in gold IRAs. Once you’ve made your choice, initiate the registration process, either online through their website or over the phone. This step will require some basic personal information.
Following your registration, you’ll typically be contacted by a precious metals expert from the company. This conversation is an opportunity to discuss your investment goals, preferences, and validate your decision to invest in a gold IRA. If you’re ready to proceed, this expert will guide you through the process of setting up an account with an appropriate gold IRA custodian.
Step 2: Fund Transfer
After successfully setting up your account, the next step is to fund your new gold IRA. This can be done by transferring funds from an existing IRA, 401(k), or other qualifying savings accounts.
Whether you opt for a direct transfer or a rollover, there will be paperwork to complete. But don’t worry, the company you’ve chosen is likely to assist you in handling these administrative tasks, making the process smoother.
Step 3: Gold Purchase
With your account funded, you’re now ready to make your first gold purchase. A professional from the company will guide you through this step. Often, this will be the same expert you consulted after registration. They’ll present a range of IRA-approved gold products, manage the purchase process on your behalf, and oversee the secure storage of your assets in an approved depository.
Step 4: Periodic Review and Adjustment
Just like with any investment, it’s beneficial to periodically review the performance of your gold IRA. Based on market conditions, your financial situation, or changes in your retirement goals, you may want to adjust your investment portfolio. Most gold IRA companies provide resources or offer professional advice to help you make informed decisions about such adjustments.
Step 5: Retirement Distributions
Once you reach the age of 59.5, you can start taking distributions from your gold IRA without penalties. Understanding the rules surrounding these distributions, including mandatory minimum distributions that start at age 72, is important to avoid potential taxes or penalties.
FAQs About Gold IRAs
What is a gold IRA?
A gold IRA is a self-directed individual retirement account that holds gold coins, gold bars, and gold bullion. They can also hold other precious metals such as silver, platinum, or palladium. In many ways, a gold IRA is similar to a Roth IRA, only it is self-directed, and you will own the physical assets held in your account.
How does a gold IRA work?
Gold IRAs typically allow for pre-tax contributions and have similar income and contribution limits as well as withdrawal rules. When investors purchase precious metals through a gold IRA, they must be stored outside your home. This is done with a custodian in a secure depository, bank, or a third-party trustee approved by the IRS.
Custodians also help you manage the paperwork and tax reporting to meet the IRS requirements for retirement planning.
What fees are associated with a Gold IRA?
The exact cost and nature of certain fees will differ between companies. There are several standard fees commonly associated with any precious metals IRA. Here’s what you can expect:
- Account Setup Fee: Typically ranging between $50 and $150. This is a one-off fee charged by some gold IRA companies for opening an account.
- Administrative Fee: This is an annual fee that typically falls between $50 and $150, intended to cover the maintenance of your IRA account.
- Storage Fee: This is a standard fee but it can vary depending on your custodian. It usually costs somewhere between $100 and $300 per year to store your precious metal investments with a certified custodian.
- Gold Markup: The majority of gold IRA companies charge a small markup on top of spot gold prices. You’ll have to ask about this fee as they’re not usually disclosed online.
Should I buy gold bullion or gold coins?
Investors can generally choose to buy either gold bullion or sovereign coins. While both are valued per ounce based on the spot price of gold, sovereign coins are popular with new investors for a few reasons.
For starters, sovereign coins such as the American Eagle and Canadian Maple Leaf are easily recognizable and thus easier to trade. They also tend to sell at higher premiums compared to bullion bars, which are slightly harder to sell. Large bullion bars are usually more suitable for institutional investors.
What is the best way to invest in gold?
While a gold IRA can be a popular investment vehicle, there are many ways to invest in gold, each with their various pros and cons.
Buying gold outside an IRA, for example, comes without IRS restrictions over amounts owned, and storage. This also allows you to avoid storage and custodial fees. In addition, a more favorable capital gains tax applies to investors who hold their gold for over one year.
However, young investors with smaller budgets may be better off with a traditional IRA, rather than investing in small amounts of gold.There are also several gold equivalents including gold ETFs, and gold mining stocks.
In general, it’s ideal to use a gold IRA as an accumulation vehicle as part of a broad and diverse investment strategy.
How is gold taxed in an IRA?
Taxes on gains from gold IRAs are due once you cash out. The IRS taxes them the same way as ordinary income; using a marginal tax rate. So, the amount you pay in taxes will depend on your income bracket.
If your investments generate losses, you will not be able to deduct them on your tax filing.
You must start taking distributions from the IRA by the age of 70 1/2.
Is a gold IRA safe?
Gold has a long, proven history as an asset and hedge against inflation. Gold IRAs also offer the same tax perks as regular IRAs.
As mentioned above, the IRS approves secure depositories for storing gold in IRAs. Gold IRA companies must go through a strict auditing process to ensure that the gold they receive is the gold you ordered.
Are precious metal IRAs a good idea?
There are conflicting opinions on this topic. However, precious metals are generally considered a solid investment since it tends to move in the opposite direction of the stock market. That means that if the market is dropping, your precious metals IRA will still be doing well. A precious metal IRA can help you diversify your portfolio.
Can I store my gold IRA at home?
No, unfortunately, home storage is not an option. The IRS actually has strict guidelines about where your physical gold and other precious metals can be stored. They must be stored in an approved, third-party facility.
Can a gold IRA hold other precious metals?
Yes, gold IRAs can also hold silver, platinum, or palladium. According to IRS guidelines, the precious metals must meet a certain purity standard to be held in a precious metals IRA. Here are the purity standards for each precious metal:
- Gold: At least 99.5% pure or higher
- Silver: At least 99.9% pure or higher
- Platinum: At least 99.95% pure or higher
- Palladium: At least 99.95% pure or higher
How much does it cost to start a gold IRA?
The upfront cost will depend on the gold IRA company you end up choosing. Most gold IRA companies will have a minimum required investment, and some investments can be quite high.
For example, Augusta Precious Metals requires their clients to meet a $50,000 minimum investment for gold and other metals. Some of the gold IRA companies on our list have very low minimum investment amounts. Depending on your existing retirement accounts, and your investment budget, it can be worth seeking a gold IRA company with more accessible investment requirements.
You’ll also need to consider storage fees and custodian fees. Make sure you ask many questions when evaluating different companies and keep an eye out for any hidden fees.
Are gold IRAs worth it?
This really depends on your investment goals, budget, portfolio and time horizon. For some, a gold IRA is superior to alternative exposure to precious metals via gold mining stock or gold ETFs. In reality, every investment vehicle comes with its pros and cons.
A gold IRA company will often market a gold IRA as a safer gold investment, but the definition of a safe investment really depends on your own unique risk appetite. But regardless of which of the many gold IRA companies you choose, it’s vital that your gold IRA is just a small percentage of a diverse portfolio.
Working with a reputable gold IRA company is ideal because you’ll receive genuine guidance from qualified experts who know the ins and outs. These experts know how to manage gold IRA accounts and will work hard to ensure your investment needs are met as far as possible.
Can I choose a gold IRA rollover?
Yes, a gold IRA rollover is how many new investors get started. A self-directed IRA custodian can help you do a rollover or transfer your existing traditional IRA or 401(k) into a gold IRA.
Opening a gold IRA can be a good way to diversify your portfolio and protect yourself from inflation. However, the process of opening a gold IRA can be tricky. So, you want to select the right company to assist you during this process.
The best gold IRA companies outlined in this article could all be suitable options as you’re getting started. Make sure you consider all your options and ask plenty of questions. Then, choose the gold IRA company you believe will be the best fit for your gold investment goals.