Gold Backed IRA: Is It Worth It?

gold backed ira
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Circumnavigating the world of IRAs can be pretty tricky, especially in a world full of complicated rules and regulations like: why do some IRAs allow you to invest in gold while others don't? 

Why would you want to invest in a gold backed IRA in the first place? We can answer these questions and more so you can find out if it's worthwhile for you.

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Are Gold Backed IRAs Worth it?

A gold-backed IRA is a self-directed IRA that allows a qualifying individual to invest in alternative acquisitions, such as gold. Investing in gold can be a relatively safe venture due to the stability of precious metal prices over time and is a great way to diversify one's IRA portfolio. 

There are many advantages and disadvantages to gold-backed IRAs. Keep in mind that you can't invest in gold for regular IRAs; there are extra measures to take and fees to pay if you want to incorporate it into your retirement plan. 

Fortunately, if you know what you are doing, it can be well worth it.

What is a Gold-Backed IRA?

In regular IRAs, individuals cannot invest in things such as precious metals, real estate, or crypto. This can be inhibitory for those who wish to expand their IRA portfolio or protect it with trend-resistant assets. 

Self-directed IRAs break these limitations while still being regulated by the government.  A gold-backed IRA specifically is the purchasing and use of physical gold as a financial asset.

This includes gold bullion and some gold coins.

Why You Should Consider a Gold-Backed IRA

First, let's discuss why you should use gold-backed IRAs in the first place.

Gold Prices Resist the Market

While not wholly immune to the ups and downs of the stock market, gold prices are resistant to significant changes in the economy, making them generally a safe option to invest in. 

According to a chart of gold prices over the past 100 years, there has been roughly a 327% percent increase in the price of gold overall from 1915 to 2022

Considering inflation and the long timeframe, this increase is relatively small in the grand scheme of things.  You may be asking: If there isn't much to return, then what's the point of investing?

Well, while there is some return (albeit not as much as riskier endeavors), the main reason to consider a gold-backed IRA is to protect your finances with an asset whose price isn't at high risk. 

If the market crashes or goes through a recession, backing your IRA in gold can be a saving grace as prices often remain relatively stagnant in such times.


An essential factor in incorporating gold into your IRA portfolio to note is that it adds diversity. As we previously mentioned, gold is resistant to market changes, so having gold in IRA will impede potential disasters. 

It's not the place to put all your money in, but it's an excellent area to have some in.

Tax Benefits

A self-directed IRA will have the same tax deferral and benefits as a regular IRA.

Gold is Valuable

Gold is a limited resource and a precious metal. That means its economic value is high due to scarcity and its use as an industrial resource. 

It won't always be around, and while the dwindling amount of it may be depressing, it can work to your advantage. We've talked about how its price doesn't change very much, identifying it as a stable asset, but that's not entirely true.

Yes, while it's a good way to defend your assets against market trends, gold prices could potentially skyrocket as the number of resources goes down. 

Given the metal's historical significance and numerous uses in science and industry, we certainly won't see its value go down as well.

Disadvantages of a Gold-Backed IRA

Unfortunately, there are some negatives that everyone considering buying physical gold IRAs should keep in mind.


There are numerous fees involved with having a gold IRA. You're going to be reaching out to a non-bank custodian, paying for storage, and covering maintenance. 

Here is a list of possible fees:

  • Custodian account setup and maintenance fees
  • Storage fees
  • Seller fees
  • Insurance fees
  • Withdrawal fees

If you're just looking to invest in gold, opening a self-directed IRA specifically for this might not be the best option. There are other ways to incorporate gold into your IRA, such as investing in gold mining or processing companies.

Little Gain

Unlike paper-backed assets, stocks, and bonds, there is no interest, dividends, or yields. The only increase in your assets will result from the actual price of gold and the money you put in.

While the stable prices of gold can work to your advantage, it can be a disadvantage in this way.

The Bottom Line

Gold IRAs are one of the best ways to protect your finances throughout your life as they have a historically non-volatile market and will likely always be a valuable precious metal. 

While it isn't something everyone will consider due to a costly setup and limited gains, it certainly can be worth the extra steps in the right hands.

In order to safeguard your savings and invest in your future, it's never too late to consider a gold-backed IRA.

Gold Backed IRA FAQ's

Here are a few questions that are frequently asked around the web:

How do I setup a gold-backed IRA?

As mentioned before, you cannot buy gold as an asset for regular IRAs and will need a self-directed account. For this, you’ll have to consult a non-bank custodian to open and manage an account.

You will also need a broker to buy the gold and a depository to hold it. Once you pay the necessary fees and get everything in order, you are also able to roll funds over from your other IRAs to your gold IRA.

How is a gold IRA taxed?

As we mentioned before, gold IRAs are tax-deferred and have the same benefits as any other IRA. Contributions are not taxed and may actually qualify as tax-deductible. 

However, you may have to pay withdrawal fees.

Can I use gold I own in my household as part of an IRA?

Unfortunately, you cannot transfer your gold jewelry or coins to an IRA as all gold purchased must be done through a brokerage and a custodian.

Augusta Precious Metals

This company has proven its commitment to exceptional customer experiences and education to help Americans savers use physical gold and silver in an IRA to gain retirement peace of mind.

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