How to Invest in Gold for an IRA

You can put gold coins minted by the U.S. Treasury into your IRA.

You can put gold coins minted by the U.S. Treasury into your IRA.

You'll need around $1 million in liquid assets to retire on an income of between $40,000 to $50,000 per year, according to a report on If you haven't already started fully funding your individual retirement account, now is a good time to start. You can use your IRA to invest in securities like stocks and bonds, but you can also use your IRA as a hedge against inflation with gold investments.

Prohibited Transactions

Internal Revenue Service regulations prevents you from putting collectibles in your IRA. The IRS includes metals and coins with its list of prohibited investments along with stamps, rugs, antiques, artworks and alcoholic beverages. There are some exceptions to the "no metals and coins" rule, though. IRS rules and regulations specifically allows your IRA to hold U.S. gold coins that were minted by the Treasury Department and certain other gold coins and bullion that meet established purity standards.

Coins and Bullion

You can't put gold coins or bullion that you already own into your IRA. You can only fund your IRA with cash, then your IRA trustee can purchase approved gold coins or bullion for your account. You have to find an IRA trustee who is willing to handle the acquisition and storage of precious metals for your IRA. Most major investment brokerage firms do not offer this service, according to MSN Money. There are a number of precious metals firms that are approved by the IRS to act as IRA trustees, that can handle such transactions for you.

Gold Stocks

There is no IRS prohibition against holding stocks in your IRA. If putting physical gold into your retirement account is too much of a hassle, you can still get exposure to gold by purchasing gold stocks. Gold stocks represent ownership in companies that mine, process, refine or market gold and other precious metals.

Gold Mutual Funds and EFTs

You don't have to be an investments pro to have a diversified retirement portfolio. Investing in a gold stock mutual fund not only gives your IRA exposure to gold, but provides you with instant diversification and professional management of your funds. Gold-oriented exchange traded funds, which typically try to mirror the composition and results of gold indexes, are also acceptable by the IRS for inclusion in your IRA.


About the Author

Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.

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