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Gold IRA vs Physical Gold

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In today's uncertain economic climate, securing your financial future is more crucial than ever.

With gold consistently shining as a safe-haven asset, many investors are faced with a pivotal decision: should you invest in a Gold IRA or physical gold?

Each option offers unique benefits and challenges, but which one aligns best with your financial goals and risk tolerance?

Dive into this comprehensive comparison to discover the nuances of Gold IRAs and physical gold, and find out which investment strategy will safeguard your wealth for generations to come.

Don't miss out on making an informed choice that could define your financial stability—read on to uncover the ultimate gold investment guide.

Before we get started, investing your savings is a serious task. When it comes to adding precious metals to your portfolio, how do you know which companies to trust?

That is why we have researched every company in the industry and selected the very few with the highest customer service standards.

This way you can easily compare the best companies in the business, and choose one that fits your needs and investment goals.


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Gold IRA vs. Physical Gold: Which is a Better Investment?

Gold is a safe haven, a hedge against inflation, and a form of portfolio protection against market volatility. Is it better to invest in gold with a gold IRA or just buy physical gold? This article answers that question.

We look at the details of investing in gold with a gold IRA vs. owning physical gold. We examine the benefits of both scenarios.

Key Takeaways

  • The benefits of investing in gold
  • Advantages of a gold IRA
  • Perks of owning physical gold

Investing in gold has many benefits. Here are a handful of examples.

Diversification of Your Portfolio

Portfolio diversification is a primary reason most people invest in gold. Even investors who are critical of gold can’t help but admit that investing in some percentage of gold with an IRA brings healthy diversification to your portfolio.

Traditionally, experts recommend dividing your portfolio between stocks, bonds, and cash: 60% stocks, 30% bonds, and 5% cash. Real diversification entails different classes of investments in different world regions or industries.

Assets that perform well only when Wall Street is healthy and strong are fickle. When a financial crisis hits, significant losses follow. Those losses include assets tied to Wall Street’s performance.

Gold, on the other hand, tends to do well regardless of what’s happening on Wall Street.

In fact, the price of gold tends to go up when the rest of the market goes down. This makes gold an excellent hedge against inflation and a useful asset for investors seeking diverse, solid portfolios.

Mitigation of Risk

Historically, gold does well even when the stock market is down. This makes it a steady, strong asset that retains value. You can convert it to cash quickly and easily, affording some stability as prices of other assets fall.

A Defense Against Inflation

Traditionally regarded as an inflation hedge, the asset of gold contributes its steady value to an investment portfolio even during times of extreme inflation. In this country, we don’t have too much experience with times of extreme inflation.

Unfortunately, that reality is starting to change. We haven’t seen inflation this high in four or more decades.

Even worse, inflation continues to rise. Gold’s steady value can sustain you and your portfolio through more inflation and market volatility.

Inflation peaked at 11% in a largely stagnant economy during the 1970s stagflation. Over that decade, the annualized growth rate of gold was more than 30%.

Its annualized growth rate was over 20% when adjusted for inflation.

That’s an impressive number in any economy. It’s especially notable in a tumultuous economy experiencing record inflation. Gold’s steady value and consistent performance during terrible economic times give it widespread appeal during bouts of high inflation. That’s why so many investors are rediscovering gold yet again.

The Growth of Assets

Although gold is a hedge against inflation and a safe haven during market downturns, it’s an equally useful asset during market upturns. Gold’s annualized growth rate since 2001 is 9.45%.

The annualized growth rates since 2002 for the S&P 500 and the Dow Jones are 4.82% and 4.94%, respectively. Even when the economy is strong and inflation is low, gold’s value holds steady or rises.

The Gold IRA: the Advantages

You might have heard about a gold IRA on television? Sometimes called a “precious metals IRA,” it’s on the news and in commercials. What is a gold IRA?

A gold IRA is an exciting way to invest in physical gold. It’s a type of individual retirement account with which you can invest in physical gold bars and coins.

You get the same tax advantages with a gold IRA as you do with any other type of IRA account. A gold IRA just allows you to own physical gold bars and special bullion coins and benefit from the perks of owning gold.

Owning physical gold of your own has advantages. Investing in physical gold with a gold IRA has its own specific set of advantages. Take a look.

You’ll Be Protecting Your Retirement Assets

Assets in your gold IRA enjoy the same tax treatment as assets in your other retirement accounts. The tax advantages given to your 401(k), 403(b), TSP, IRA, or other similar retirement accounts also apply to your gold IRA.

Like any IRA, you have to fund a gold IRA before you can start using it to invest in gold. Most new gold IRA accounts begin with some sort of rollover, like a 401(k) rollover.

During this procedure, you roll the assets in your 401(k) account over into your gold IRA. You can also fund gold IRA rollovers with 403(b), TSP, IRA, or similar retirement accounts.

Generally, a 401(k) to gold IRA rollover is a process that your IRA gold custodian can complete. The gold IRA allows pre-tax contributions, so contributions are tax-deductible and any gains accrue tax-free. 

You don’t pay taxes until you take distributions. When you begin taking distributions, you can receive your physical gold “in-kind,” or you can sell your gold to the depository and receive a check or cash (wire transfer).

Growth of Assets Tax-Free

Gold IRAs come in two forms: the traditional gold IRA and the Roth gold IRA. A gold IRA offers the opportunity for your assets to grow tax-free.

When you have a traditional gold IRA, you make pre-tex contributions with which you invest in IRA-eligible gold bars and coins. Gains remain tax-free, but your subsequent distributions incur tax.

When you have a Roth gold IRA, you make post-tax contributions. You use these contributions to invest in IRA-eligible gold bars and coins, also enjoying tax-free gains. You also don’t pay taxes on distributions.

Savings Diversification

Holding assets in retirement plans can sometimes feel like you’re limited to just the available investment options. Sometimes, employer-sponsored retirement plans like the 401(k) or the IRA offer investment options that don’t interest you. Assortments of fees and average performance make it challenging to grow your money.

It’s no wonder that 401(k) to gold IRA transfers and rollovers are becoming so common. A gold IRA exposes your portfolio to a wider array of investment choices. It gives you a chance to own gold physically as an asset in your portfolio, an option you can't exploit with other types of retirement plans.

You don’t even have to roll over or transfer all of the funds in your existing retirement account. You can roll over or transfer a portion. An IRS-approved gold IRA custodian can assist you.

Secure Gold Storage Facility

The law requires an IRS-approved custodian to hold assets owned by your IRA. The same applies to a gold IRA. Your gold IRA’s physical gold remains under the management of an IRS-approved custodian in an IRS-approved, secure bullion depository.

Purveyors of IRA-eligible gold partner with well-established, IRS-approved precious metals depositories. 

These depositories have lengthy, proven track records and decades upon decades of success at housing and protecting precious metals. Thanks to their protection, your IRA gold is safe 24/7.

Icon - Securing the Physical Gold

The Perks of Owning Physical Gold

Some people feel their retirement assets aren’t significant enough to protect. Even people with retirement assets don’t necessarily want to put them into a gold IRA. Everyone’s scenario is different, and everyone has the right to choose.

For people who prefer a handful of hands-on assets, physical gold has many advantages. You can purchase it quickly, discreetly and have it shipped directly to your home.

Around-the-Clock Access

Having gold shipped directly to your home is a spectacular idea. There’s something special about the experience of holding fine gold in your very hands. If you have children or grandchildren, you can introduce them to the experience of holding and appraising gold of high purity value.

Having gold on hand gives you access to an immediate source of cash. Gold is universally acceptable. Its tendency to climb in price when the market goes down makes gold an especially flexible strategy to get through lean times.

Distribution Management

Taking possession of physical gold gives you the power to distribute it as you see fit. You can secure it in a safe. You can designate a special spot in a cellar or a bunker beneath your house.

You can also store it in a bank safe or a bank deposit box. That way, your gold is there when you, a family member, or a very good friend require quick cash or collateral. The real-world uses for gold can’t be overstated.

Highly Portable

Bullion coins and gold bars are highly portable. Certain IRA-eligible gold bars, such as the PAMP Suisse gold bar, are easy to pack, transport and turn into cash anywhere in the world. When it’s time to pack and leave, taking your gold with you is like taking your wealth and your security with you.

In many circumstances, being able to carry your gold with you puts your mind at ease. Since gold amounts are so small relative to their prices, gold is even more portable. You can carry hundreds of thousands of dollars worth in a mere jacket or a purse.

Asset Flexibility

There are many cases in which it’s advisable to own physical gold and invest in gold with a gold IRA. Physical possession is just another diversification strategy in one’s overall retirement planning. Flexibility and diversity are important factors in a portfolio.

How flexible and diverse is a gold IRA? Owning physical gold and investing in gold with a gold IRA are both intelligent investment strategies, but they have differences.

Details of a Gold IRA

Gold Kept in a Depository

When you invest in gold with a gold IRA, the IRS requires you to keep your physical gold in the care of an IRS-approved custodian. An IRS-approved depository is a physical location that maintains possession of your IRA gold.

Any physical gold you withdraw from your IRA counts as a distribution. The IRS considers this an actual IRA withdrawal. They treat it as income. You’ll be taxed and you might incur penalties.

Since the gold you invest in with your IRA remains at a remote depository until you withdraw it, you might not see your gold in person for years and years. If that bothers you deeply, then purchasing and keeping physical gold might be more to your liking.

Paperwork and Fees

Gold costs money. The custodian who oversees your gold IRA costs money, too. These fees are unavoidable and necessary.

Your gold IRA custodian makes sure you remain in good standing with the IRS. They help you complete and file key tax forms. Custodians also fulfill the investor’s wishes: buy, sell, etc.

In addition to various custodial fees, there are account fees. Depository costs are among the most critical account fees. Some fees are annual. Others recur on their own unique schedules.

Details of Owning Physical Gold

Gold Kept at Home

Gold purchased and kept at home has no verifiable authenticity. When it’s time to transform such gold into cash, how do you satisfy answers about its authenticity? Not all gold is created equal.

The purchase of fine, collectible bullion and proof coins is an art form best left to professionals. The IRS has a long list of criteria that determine IRA-eligible gold.

Reasons to have a gold ira

IRA-eligible gold must have a purity value of 99.5%, and only certain gold coins and bars from the world’s most highly respected mints are acceptable.

Purchasing gold from vendors who aren’t vetted, reputable, or don’t have a BBB rating is a risk for buyers. Even so, keeping gold at home calls other scenarios to mind.

The Possibility of Theft or Damage

Valuables stored at home are vulnerable to theft and damage. That’s why we spend so much money annually on video doorbells and home surveillance systems. Theft and damage (owing to fire, weather, and natural disasters) are major threats to your home stash of gold.

Sometimes, just having gold stashed in your home can attract negative attention. If the information gets out, it might tempt the wrong person. By theft or damage, losing a home stash of gold is everyone’s least favorite outcome.

Should You Get a Gold IRA or Just Purchase Physical Gold?

A better question is, why should you have to choose? Investing in gold with a gold IRA is a proactive method to take control of your future. At the same time, having physical gold on hand means you always have liquid cash available for rainy days or at times when the market is underperforming.


Don’t get caught in another 1970s stagflation or another 2008 economic crisis. The harder a hit your investments take, the harder it is for your investments to bounce back.

Sometimes, investments don’t bounce back at all. That’s why preparation is so vital. Today’s prep can put you in a better place when the crisis passes tomorrow.

Don’t wait too long before you start protecting your savings. Diversify your portfolio today. Explore investing in gold with a gold IRA, purchasing physical gold, and the numerous advantages of gold ownership.

Remember to read our list of the Top Gold Companies.

>> Click HERE to read our Best Precious Metals IRA Companies list <<


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