Are Gold IRAs Safe?

Last Updated on 17th June 2022 by Jeffrey Camerda

Are Gold IRAs Safe?

Gold is an attractive investment option for those who do not want to pool all their retirement funds into the traditional paper assets such as cash, stocks, and bonds. In times of economic crisis, these assets can plummet in value. Gold represents an alternative asset that can act as a hedge against turbulent economic times and provide long term wealth protection.

investing in physical goldGold IRA Safety – 4 Key Features

  • Long Term Wealth Protection – gold is regarded as an excellent asset for long term protection of wealth. It represents a very strong hedge against inflation and economic crisis. It has been used successfully for centuries to protect wealth and provide a financial safety blanket as currencies and financial institutions collapsed.
  • Physical Asset – when you purchase gold using an IRA you are getting an actual physical asset. A gold broker will have the appropriate quantity of gold shipped on your behalf and stored in your name at a secure holding facility. Gold is a tangible asset. It has the added assurance that it can be seen and it can be held. It is not just a number at the bottom of a balance sheet.
  • Secure Storage – all gold held in IRA accounts is stored in IRS approved storage depositories. These facilities deliver secure asset storage and have gotten the all-clear from the IRS. In many cases, custodians will offer ‘secure segregated storage’. This means that your gold bars/coins are held separately from anyone else. They are not pooled in with other investors’ assets.
  • Professional Custodians – you will have to employ a company to manage your gold IRA account. This is a legal requirement. And as long as you choose wisely the company acting as your custodians will have many years experience in the industry. They will be able to offer excellent professional advice on how best to manage your portfolio. They will ensure all legal requirements and technicalities are capably taken care of and completed.

green shoot in a glass of coinsHow to Open a Gold IRA

To invest in gold or other precious metals with your IRA you will need to open a Self-Directed account with a custodian that allows gold investment. Not all IRA accounts allow you to invest in gold. Opening a self-directed IRA is easy.

All you need to do is choose a custodian that specializes in precious metal/gold IRAs to manage your account. This is a legal obligation and they will act as your custodian. They will assist you in opening up an account and once it’s up and running, you can have funds held in a 401k or pre-existing traditional IRA rolled over.

There are a lot of companies out there that specialize in managing gold IRA accounts. It is worth spending some time researching the market and choosing one that works best for you. Each company will have a range of specialities and levels of experience.

Spend some time reading the business ratings for each. Check out the online reviews they are getting from their existing customers. This will give you a good idea of how they are performing. When it comes to the management of retirement funds you want to be able to rest assured that you have chosen the best gold ira company out there.  For more information on choosing the right custodian, see our guide: Best Gold IRA Companies 2020.

investing on smart phoneHow to Rollover 401k to Gold IRA

Once you have your new self-directed gold IRA up and running it’s time to move over the funds from your existing account. This is referred to as a gold IRA ‘rollover’. Where eligible, you can rollover to a gold IRA from a 401K, 403b, 457b, TSP, or traditional Roth IRA.

You need to be careful not to infringe on the deferred tax status of the funds when processing the transfer. You can perform the rollover in one of two ways – Direct Rollover, or Indirect Rollover.

  • Direct IRA Rollover:  A direct rollover is the safer of the two options. This way the funds move from one account to the new account without you laying a hand on them. This is the safest method if you do not want to trigger any tax penalties. To perform a direct 401k rollover you will need to contact the administrator of your existing account and instruct them to begin the process of rolling over to the new self-directed gold IRA. They will send you a form to get the process started. Your retirement portfolio will then be transferred over on your behalf and there is no danger of incurring any penalties from the IRS.
  • Indirect IRA Rollover:  The indirect method involves you liquidating your existing account and receiving a check in the post. You will have to contact the administrator of your old account and ask them to send you a check to the full value of the portfolio. Once this happens the clock starts ticking and you have 60 days to lodge the funds into your new self directed gold IRA.

    If you fail to meet this 60-day deadline you are in for some trouble with the IRS. Once the 60 days have elapsed the IRS will view the funds as a taxable withdrawal if they have not been lodged into the new account. Also, a 10% early withdrawal penalty will be applied if you are aged 59.5 years or younger. This is a situation you do not want to find yourself in. Therefore we recommend a direct 401k to gold IRA rollover.

How to Buy Gold with an IRA

Buying gold is easy. Once your self-directed account has been set up and your funds have been transferred over you can begin buying gold. Depending on the custodian you have and how your account is managed it may be up to you to contact a gold broker and agree on a deal. Alternatively, other custodians provide this as a service and once you complete a ‘Direction of Investment’ form they will go ahead and arrange the transaction for you.

Whichever method you choose it will be your custodian that completes the deal for you. The predetermined funds will leave your account and physical gold will be shipped to a secure storage location to be held in your name. You cannot hold it personally, store it at home, or any personal storage location. The gold you buy must be stored in an IRS approved depository.  For more information, read our guide How to Buy Gold with an IRA.

close up of a gold barReasons to Invest in Gold

Gold has been a highly attractive investment option across the world for thousands of generations. The precious metal has been used to protect wealth for centuries. Here are four key points that make gold a smart investment option.

  • Trusted Wealth Protection: Gold is an excellent hedge against inflation and economic crisis. It has been used by investors for centuries to protect wealth during turbulent political and economic times. Global uncertainty is a reality of modern times and the next financial crisis could be just around the corner.History has shown us that savvy investors were able to protect their wealth as currencies collapsed and political structures fell. Gold can be used as a type of financial safety blanket to protect wealth into the future.
  • Asset Diversification: Diversifying your retirement portfolio has never been more important. The decline in the US dollar and spiralling national debt levels across the globe place major question marks over the world banking system. Government debt across the world is at an all-time high and is skyrocketing.The Wall Street Journal is reporting that the U.S. National Debt Will Rise to 98% of GDP by 2030. It is being forecast that deficits will exceed $1 trillion a year for at least the next 11 years. There are some very challenging economic times ahead. Now is not the time to be storing all your wealth in conventional cash, bonds, and stock markets. Diversification has never been more crucial.
  • Strong Demand & Finite Supply: Gold is of finite supply and the volume that is available on the market is fixed. When you couple this with the fact that is is an incredibly popular commodity across the world, then it’s intrinsic value becomes very clear. It has a centuries-long history of storing value.The two growing superpowers of India and China are demonstrating ever-increasing demands for the precious metal. Global central banks around the world are buying up gold bullion to shore up their reserves, underpinning the longterm value of the precious metal. The future of gold looks very good.
  • History of Trading Inversely with US Dollar: Gold bullion is traded around the world in US dollars. As the value of the US dollar contracts, the value of gold bullion increases. They have a history of trading inversely to one another. This makes gold an excellent hedge against inflation of the dollar.Financial experts recommend that at least 10% of any portfolio be held in gold. Those who think an economic crisis is imminent recommend a much higher figure. It is generally regarded as a low-risk, long term, secure asset.

If you are looking to protect your wealth for the decades ahead, a 401k to gold IRA rollover is worth some serious consideration.  For further reading, visit our main review page –

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Certified Financial Planner at Camarda Wealth Advisory Group | 800-262-1083 | Website

Dr. Jeffery Camerda, PhD, is a financial planner who specializes in wealth management and retirement planning.

With a PhD in Economics and Financial Planning, Jeffery represents the highest level of financial planning expertise and achievement in the USA

In addition to preparing you for a career in financial planning, a PhD in economics and finance also prepares you for academic pursuits, such as becoming a university professor in teaching or doing research.

Here at the Wealth Builder, our financial advisory company was founded in 2007 and services all across the USA with over 16 years of expertise.

In order to provide the finest advice and services, we pay close attention to the specific financial circumstances and requirements of each client.

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Jeffrey Camarda, PhD, CFA, EA is also the founder of the Family Wealth Education Institute, is a member of the Financial Planning Association and serves as the Chairman of Camarda Wealth Advisory Group

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