IRA in Precious Metals – Approved Precious Metals for a Gold IRA

When planning for retirement, most people get a 401(k) or conventional IRA, which includes stocks, bonds, and/or mutual funds. However, many people are foregoing an IRA funded by stocks, and instead, they are choosing more tangible assets like precious metals.

Precious metals IRAs are self-directed IRAs, and to get one, you must work with one of the many gold IRA companies. These companies allow you to set up a gold IRA account, and once that’s done, you can include physical precious metals, including gold, silver, platinum, and palladium.

The IRS has very strict rules on which metals are “IRA allowable,” and here, I’m going to share some information about gold and other precious metals that are allowed to be included in precious metals investments. I am not a financial advisor, but I will also touch on how to properly structure a precious metals IRA in order to remain compliant with the Internal Revenue Service rules.

Why Precious Metals in an IRA?

Precious metals, including gold and silver, have been used for many years as assets that are not often affected by inflation, economic uncertainty, or currency devaluation. Because of this, investors often turn to these assets for stability.

There are many benefits to including precious metals in a retirement account, including the following:

Diversification

Adding things like physical gold bullion, coins, bars, and more can reduce your reliance on paper assets and market volatility.

Hedge Against Inflation

Precious metals also tend to serve as a hedge against inflation. This means, that it will hold, or even increase, in value in many cases when fiat currencies lose value.

Safe-Haven Asset

Finally, metals like gold have historically performed well during times of financial crises or geopolitical tension.

With a self-directed IRA, you can choose alternative assets, including precious metals, as long as they meet the criteria set by the IRS.

IRS Guidelines for IRA-Eligible Precious Metals

There are only certain precious metals allowed for inclusion in an IRA. The IRS has set specific purity standards for these metals, and the metals must come from approved refiners or mints, like the National Government Mint.

Here are the minimum fineness standards:

In addition to the purity, any precious metals included in an IRA must be in the form of IRS-approved bullion bars or coins. Collectible coins, rare numismatic coins, and some foreign coins do not qualify.

IRA-Eligible Gold Products

Gold is the most common precious metal in an IRA. You can hold gold in an IRA as long as it meets IRS guidelines, and you can purchase gold for your IRA from gold IRA companies.

Here are some of the most popular IRS-approved gold coins and bars:

• American Gold Eagle (bullion only, not proof or uncirculated)
• American Gold Buffalo
• Canadian Gold Maple Leaf
• Austrian Gold Philharmonic
• Gold bars produced by approved refiners (e.g., PAMP Suisse, Credit Suisse, Valcambi, etc.)

Interestingly enough, the American Gold Eagle coin contains less than 99.5% gold purity, however, it is allowed as IRA approved gold by the IRS due to its legal tender status and U.S. Mint production.

IRA-Eligible Silver Products

In addition to being able to hold physical gold, you can also hold silver. Approved silver includes:

• American Silver Eagle
• Canadian Silver Maple Leaf
• Austrian Silver Philharmonic
• Australian Silver Kookaburra (specific years)
• Silver bars and rounds from NYMEX- or COMEX-approved refiners

Keep in mind that collectible silver coins, commemorative editions, and proof coins often do not meet IRA requirements unless explicitly allowed.

IRA-Eligible Platinum and Palladium

Certain platinum coins, platinum bullion, and palladium are less commonly used, but they are still great for diversification in an IRA. Here are some of the most common:

Platinum products:

• American Platinum Eagle
• Canadian Platinum Maple Leaf
• Platinum bars from accredited refiners

Palladium products:

• Canadian Palladium Maple Leaf
• Palladium bars from approved refiners

Like gold and silver, these must meet IRS purity requirements and come from accredited sources.

What Is Not Allowed?

Just because something meets exact weight specifications and minimum fineness requirements, the IRS doesn’t approve every type of metal. Some that are always excluded from being included in individual retirement accounts include:

• Jewelry, even if made of pure gold or silver
• Rare or collectible coins like pre-1933 U.S. coins, Krugerrands, or British Sovereigns
• Graded or certified coins (unless they meet specific conditions)
• Home-stored bullion (must be held in an IRS approved depository)

Attempting to include disqualified assets in your IRA can result in tax penalties, disqualification of the account, and forfeiture of tax benefits.

Storage Rules and Custodian Requirements

There are also storage rules when considering a specialized individual retirement account for retirement savings. The IRS only allows precious metals held in an IRA to be stored in an approved depository. You cannot keep the coins in your home or a bank vault, and you cannot have physical possession of the metals. You can, however, buy gold to store at home, like a Canadian maple leaf or Buffalo bullion coins, but they can’t be part of your IRA.

A custodian generally partners with IRS-approved depositories, and you can choose to store your metals in segregated or non-segregated storage.

Some of the most common and well-regarded include:

• Delaware Depository
• Brink’s Global Services
• IDS of Texas

These depositories have insured and highly secure facilities.

How to Open a Precious Metals IRA

If you are considering a gold IRA, there is a basic set of steps that you can follow:

First, choose an IRA custodian. There are many custodians out there, so make sure to do your research. I have reviewed many of the most well-known custodians, and I invite you to read those reviews before moving forward. Look at things like account fees and other costs, as some of these have higher fees than others.

Next, you should fund the account. Most people do this by rolling over an existing IRA or other retirement account, but you can also do it through a new contribution. Just keep in mind that the IRS has contribution limits in place.

Once your IRA is funded, you can then choose which metals to include. Remember, there are minimum purity requirements, and you can only add IRA-approved metals.

Finally, you store your IRA approved metals. There are usually approved depositories that a custodian prefers, but many times, you can choose your own.

Tax Advantages of Precious Metals IRAs

As with conventional IRAs, there are tax advantages to precious metals IRAs. At some point you have to pay taxes, but there are benefits, too:

Traditional IRA

Contributions may be tax-deductible, and earnings grow tax-deferred until withdrawal. Then, they are taxed as income.

Roth IRA

Contributions are made with after-tax dollars, but qualified withdrawals are tax-free.

Risks to Consider

Like any investment, there are risks to investing in a precious metals IRA:

Market Volatility

Prices of gold, silver, platinum, and palladium can fluctuate.

Liquidity

Selling gold and other metals might not be as quick as selling stocks.

Storage Fees

Annual fees apply for custodial and depository services.

Scams and Fraud

Some dealers push overpriced or ineligible physical metals to unsuspecting investors.

Final Thoughts on IRA Precious Metals

Investing in precious metals through an IRA can be a smart way to diversify your retirement strategy and protect against economic instability. However, only some other investments, you must follow IRS guidelines regarding purity, product type, and storage. Otherwise, there are penalties. There are also things to remember like these accounts, like other IRAs, are subject to things like required minimum distributions. Speak with financial professionals before starting account setup, and make sure any new accounts are IRS approved.