Do you think it’s really ok with the IRS to store gold bars in a safe at your house as part of your 401k?
Some gold IRA companies think it’s ok for you to do just that. In this guide on home storage gold IRA, I’ll take you through the details of what I’d recommend you do for a gold IRA to make sure you’re doing the right thing for your family. If done incorrectly, there can be massive tax implications that you don’t want to deal with in your retirement account. Take a look at how to move 401k to gold without penalty.
In this article:
Best Gold IRA Company
Augusta Precious Metals is a gold IRA company that I highly recommend you consider when looking into getting started with a gold IRA.
They are Money magazine’s ‘Best Overall’ gold IRA company in 2022. Investopedia’s ‘Most Transparent’ gold IRA company in 2022. The reason I like them the best is because I’m a 49ers fan and have been since I was a kid. Joe Montana’s financial team picked Augusta over every other company out there. As you think about getting into precious metals, physical gold and trying to understand the IRS rules, I’d highly recommend reviewing my article on gold IRA scams before making any decisions.
Augusta Precious Metals
There are also is a self directed IRA where you can make sure your alternative investments like setting up a precious metals IRA or a cryptocurrency IRA with BitIRA. IRA assets are important to keep track of and you may want to add in other precious metals as you think about your alternative investments.
If you’re looking for some other potential fun investments that is not trying to pull off a home storage IRA, you can check out my article on what billionaires own and add in some of their alternative investments too.
Can you setup a home storage gold IRA?
If you are known to your friends as a IRS approved nonbank trustee or custodian then you can but otherwise the answer is no. To be safe, you should just assume the answer is no. To qualify to be one is extremely high and unless you fit the criteria to be one it’s prohibited and you’re going to run into issues with the IRS.
If you read through the IRS code, you’ll find that only certain precious metals can be held in an IRA and it must be in the physical possession of a trustee like Equity Trust. If you are going to have IRA purchased gold, you’ll need to make sure it’s IRS approved gold bullion and the best way of doing this in your gold IRA account is through someone like Augusta Precious Metals.
If you read the detailed breakdown from the Industry Council for Tangible Assets’s paper The Prohibition on Home Storage of Bullion Held in an IRA, you’ll find that it directly conflicts with having physical precious metals stored at your home. This clearly means that having home storage gold IRAs is not going to be possible unless you are Equity Trust or another non-bank trustee or custodian. This doesn’t mean you have to have a minimum net worth or have a minimum amount in your individual retirement accounts to participate.
Are there penalties or taxes for incorrectly opening a home storage gold IRA?
Since you understand what the IRS thinks of this, it’s time to dig into what happens if you decide to pile a locker or safe at home with your gold coins.
If you think through the ramifications of home storage IRAs and if you have the physical gold or tangible assets in your position that can be looked at as a distribution since you have it in your hands.
The IRS clearly states in their rules that IRA accounts (whether or not it’s highly refined bullion provided to you) can’t take distributions until you’re 59 1/2 years old without also taking a 10% haircut on your retirement assets.
By doing this, you’ll also be subject to losing all the tax advantages a typical IRA account. You’ll have to pay income taxes on what you thought were going to be retirement funds for your life! Depending on how many gold and silver coins you’ve decided to store as retirement savings, you could end up with quite a bit of taxes owed.
If you get flagged as someone who doesn’t have a trustee corporation managing your gold IRA and you’ve decided a safe deposit box is the best place for your funds – you’ll end up on the audit list.
If you do this, there is a high probability that with the additional hires President Biden is making, they will have plenty of power at the Internal Revenue Service to help find other issues in your IRA that will cause penalty and fees.
The last thing anyone wants is your physical possession of gold to cause a problem with the IRS and have them start to question your reputable financial background.
Example of a Deceptive Advertisement
The first thing I’d do is read up on what the Commodity Futures Trading Commission (CFTC) thinks about the gold IRA scams here.
The CFTC also has a great PDF that talks about how you should think about investing in precious metals to be safe here. There are plenty of ads on TV, radio and online that are going to lead consumers down the wrong path with some misleading messaging.
Some of these advertisements may offer some gold coins or allow you to buy physical gold at below market prices if you jump into a gold IRA. Be careful with anyone that is promising guaranteed returns. Nothing is a guarantee.
I would also highly recommend that you make sure you’ve checkout what the Better Business Bureau thinks of the organization you’re thinking about doing business with. That is also a great way of validating that you’re dealing with a reputable company.
How to invest in a gold IRA correctly
The best way to invest in a gold IRA correctly is to go through Augusta Precious Metals, Birch Gold Group and either take a portion of your 401k or entire IRA and move it into precious metals. By doing this there are tax advantages and depending on what the market does – you’ll have some protection against the downside of what the market is potentially doing over the next 3-5 years with inflation at an all time high and our friend Powell continuing to increase interest rates like it’s 1980.
What is a gold IRA?
A gold IRA is an individual retirement account in which physical gold or other approved precious metals are held in custody for the benefit of the account owner. Gold IRAs are permitted by the Internal Revenue Service and offer the same tax advantages as traditional IRAs.
What assets can be held in a gold IRA?
Gold, silver, platinum, and palladium are all allowed to be held in a gold IRA.
What is the benefit of investing in a gold IRA?
The main benefit of investing in a gold IRA is that it provides a way to diversify your retirement savings. Gold has traditionally been a hedge against inflation and economic turmoil, and it can help protect your nest egg from market volatility.
What are the risks of investing in a gold IRA?
The biggest risk of investing in a gold IRA is that the price of gold may fluctuate, and you could lose money on your investment. There is also the potential for fraud if you choose to do business with an unscrupulous dealer. Be sure to research any company you’re thinking of doing business with to make sure they’re reputable and have a good track record.
What are the tax implications of investing in a gold IRA?
Investing in a gold IRA has the same tax implications as investing in any other kind of IRA. You will pay taxes on any profits when you withdraw money from your account, but you may be able to avoid paying taxes on the gains if you roll your account over into another IRA.
How do I set up a gold IRA?
You can set up a gold IRA by opening an account with a company that specializes in precious metals IRAs. Be sure to research any company you’re thinking of doing business with to make sure they’re reputable and have a good track record. Once you open your account, you’ll need to fund it by purchasing gold or other precious metals. You can then use these assets to invest in a variety of ways, including buying stocks, bonds, and other investments.
Can I invest in a gold IRA if I have other retirement accounts?
Yes, you can have multiple retirement accounts, including a gold IRA. However, you’ll need to make sure that your total contribution doesn’t exceed the limit set by the IRS.
How much gold can I hold in my IRA?
There is no limit on how much gold you can hold in your IRA, but there are limits on how much you can contribute to your account each year. The IRS allows you to contribute up to $5,500 per year ($6,500 if you’re over the age of 50).
What happens to my gold IRA when I retire?
When you retire, you can either cash out your account or roll it over into another retirement account. If you cash out, you’ll have to pay taxes on the gains, but if you roll it over, you can avoid paying taxes.
How long does a gold IRA last?
A gold IRA lasts as long as you want it to. You can hold onto your assets for as long as you want, and there are no restrictions on how long you can keep them.
Can I withdraw money from my gold IRA before retirement?
Yes, you can withdraw money from your gold IRA at any time, but you may have to pay taxes on the gains if you do so.
What are some tips for investing in a gold IRA?
Here are a few tips to help you get started:
- Research any company you’re thinking of doing business with to make sure they’re reputable and have a good track record.
- Be sure to diversify your investments by investing in a variety of assets, including stocks, bonds, and other investments.
- Consider working with a financial advisor to help you make the best decisions for your retirement.
- Don’t put all of your eggs in one basket – remember to diversify!
- Keep an eye on the market and be prepared to sell if the price of gold starts to drop.
Andrew's Gold IRA Pick
Augusta Precious Metals is the most trusted gold IRA company