What is IRA Approved Gold? What standards does gold used for the purposes of investment in a gold IRA have to meet? Which type of gold does not qualify for use in an IRA? Join me in yet another interesting post in which we shall take a look at the type of gold that you should purchase upon opening your gold IRA. Read on to expand your wealth of knowledge on this subject.
A gold IRA presents you with an opportunity to invest in a wide variety of alternative assets. The fact that it is a “gold IRA” means that you can also add precious metals to your account. Not all types of gold bars and coins are however eligible for use in your gold IRA.
The Internal Revenue Service ( IRS) has very strict requirements with regards to the purity standards of the types of gold that are allowed in individual retirement accounts. You will be surprised to know that many gold bars and coins you come across today cannot actually be put in a Gold IRA since they do not meet the set purity standards, which are quite high in the case of retirement investment plans.
What are the IRS requirements for Gold?
The IRS allows investors to hold eligible gold products within their tax-advantaged self-directed IRAs ( known as gold IRAs). These accounts allow investors to protect their wealth from market volatility, by purchasing and holding gold, which offers excellent diversification properties.
The main eligibility requirements that the gold used in a self-directed IRA has to meet include:
Gold bullion products used in gold IRAs have to meet the minimum purity requirements, which are set at 0.995-pure. This simply means that the gold coin or bar that you purchase for use in investing in your gold IRA has to be not less than 99.5% pure.
The gold you acquire should be stored in an IRS-approved depository. Depositories are secure storage facilities that are used to store valuable items, including expensive gold products. Not all depositories meet the IRS standards for safety with regards to the storage of gold though, so you should be careful when selecting which company to work with. The good news, however, is that most precious metal dealers and IRA service providers will gladly offer you a list of preferred depositories.
You cannot invest in gold using an IRA if you do not involve a custodian. In a typical scenario, an investor is required to find a bulion dealer from whom they intend to purchase the gold, and then the custodian takes over to complete the transaction. The involvement of the gold IRA custodian ensures that the investor upholds all the set regulations for the opening and operation of their account.
Some popular gold-IRA Approved Coins
Below are some popular gold coins that one can deposit into their Gold IRA:
These 0.9999-gold coins made their debut in this industry in 2006. They are produced by the United States Mint and have proven to be a worthy competitor for the Canadian Maple Leaf, which we shall look at in a moment.
Australian Gold Kangaroos
These coins have been around since 1987 when they were first introduced to the market. Gold Corp is the company behind the production of these coins. One thing about these coins is that they meet the fineness requirements, to the extent that they have qualified for use as legal tender in Australia. They have also become a popular item for investors and collectors alike.
The American Gold Eagle Coins happen to be 91.67% pure. Their weight, however, makes up for the gold content, since they weigh 1.0909 troy ounces. This implies that these gold coins still contain 1 oz of gold, thus meeting the standards set by the IRS.
Canadian Gold Maple Leaf
This gold coin has consistently held its worth in the gold investment industry. Its purity and weight are guaranteed by the Royal Canadian Mint, giving it the desired legitimacy for use for the purposes of investment in a gold IRA.
Austrian Gold Philharmonic
it is not hard to tell apart this classic gold coin with its Musicverein design which consists of several popular musical instruments such as the cello, harp, bassoon, french horn, and violin.
Common IRA-approved Gold Bars
The gold investment industry is also not short of gold bars that you can use when investing for your retirement years through your gold IRA. Here are some popular types of gold bars :
Valcambi Gold CombiBar
This gold bar is 99.9% pure. It has become a favorite asset for large-scale gold investors, owing to the fact that it can be split into 50 detachable minibars. Each of these mini bars weighs 1 gram.
These gold bars are quite popular in this industry. There is a good chance that the IRA Approved Gold Bar you come across when hunting for assets for your gold IRA is a Credit Suisse Gold Bar. These bars are produced by Credit Suisse, based in Zurich, Switzerland. Like the Valcambi Gold CombiBar, this gold bar has a purity level of 99.99%.
Johnson Matthey Gold Bar
Johnson Matthey Gold bars are not as readily available as the other bars described above, but you can still turn to them if you intend to make a massive investment in your gold IRA. With a purity level of 99.99%, these bars are amongst the finest gold bullion bars you can come across
in this industry.
Frequently Asked Questions on “ What is IRA Approved Gold”?
1. What are some examples of Gold Bullion Coins that you cannot put in a gold IRA?
As already highlighted, not all forms of gold can be used for the purposes of investment in a gold IRA, Some of the gold coins prohibited for use in gold IRAs include South African Krugerrand Coins, U.S. Liberty Coins, Turkey Gold 100 Kurush, Chilean 100 Peso Coins, Chinese Panda Coins, Somalia Elephant Coins, Mexican Peso Coins, Israel Tower of David Coins, Swiss 20 Franc Coins, Saudi Arabia Gold One Guinea Coins, United Kingdom Queen’s Beasts Gold Coins, etc.
You cannot also add collector’s coins, commemoratives, or any type of numismatic coins to your gold IRA.
2. Are the gold coins that are sold for a high premium IRA Approved?
Not necessarily. Simply because a gold coin costs an arm and a leg does not mean that it is automatically going to make its way into your gold IRA. If you, therefore, come across a sales rep selling coins to you simply because they are rare, special, or a limited edition, you should decline the offer, until you can confirm that they are approved for use in a gold IRA and that they are not overpriced.
3. Why should I consider investing in IRA Approved
As recent times have proven, it is not a good idea for you to place all your eggs in one basket, moreso if those eggs are what you are looking forward to surviving on during your retirement years. The ongoing dollar depreciation coupled with the rapid rise in the inflation rates has become a menace to investors’ portfolios, often causing the rapid devaluation of their paper assets.
Purchasing and adding IRA-approved gold to a retirement investment portfolio not only enables an investor to store their wealth in such a way that it remains barely unaffected by the dollar depreciation but also presents them with an opportunity to experience overall portfolio growth. This arises from the fact that the price of gold has been seen to rise steadily during stock market crashes.
4. Where should I store my IRA Approved Gold after purchasing it?
IRA Approved Gold is stored in an approved depository. Avoid any sales rep who tells you that you can store your IRA Approved gold in your safe at home. Doing this will, in fact, lead to you being heavily penalized by the IRS.
Also check out some of our other related posts on subjects like self-directed IRAs, rollovers, etc:
Also read: What is a 401(k) to gold IRA rollover?
That will be all for this article on what IRA-approved gold is. I hope that you enjoyed it and that you learned something new from it. This post is just a guide to point you in the right direction, so if you have more questions on this topic, let me know- drop them in the comments section and I will get back to you asap.
I wish you well,
Eric, Investor and Team Member at Gold Retired!