Gold IRA vs Physical Gold

Gold IRA vs. Physical Gold

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Gold has been a treasured asset for centuries. From the Aztecs to today's savvy investors, people understand that precious metals have value in almost any market. Investors who're curious about buying gold or starting a gold IRA may want to compare these two savings choices.

Discover the difference between gold IRAs and physical gold investments with these expert insights.

Before we get started:

Inflation and rising interest rates has destroyed many people's savings.  Many investors feel defeated and helpless, but you can fight back.

Gold and other precious metals have been used to protect against inflation for thousands of years.  And when you hold physical in a tax-protected savings account, it gets even better.

Opening a gold IRA can sound complicated, but it's really not.  


That is why we created a list of our most trustworthy investment companies, to make comparing and choosing the company best suited to your needs as easy as possible.

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Table of Contents

Learning About Gold's Overall Advantages


Pure gold has always had value in the marketplace. There are specific advantages to gold products, from jewelry to bars, that should be weighed before a major purchase.

  • Long-Term Growth

In general, gold offers asset growth over a long-term period. For example, the stock market might have an overall annual growth of around 4 percent. Gold's annual growth, in contrast, might be as high as 9 percent.

Buying gold at the beginning of the year and selling it off after at least a year provides a solid investment.

Gold is often used during economic downturns too, but it's also useful during stable periods. This fact might tempt investors to try gold investments regardless of the market's conditions.

  • Lowers Financial Risk

Adventurous investors know they can make a lot of money by buying and selling stocks at the right times. They can also lose plenty of money. Gold is different because it's a physical investment.

Investors aren't investing in a company's success. They physically buy the gold and hold onto it. Because gold holds onto its value through both good and tough times, it lowers an investor's financial risk.

They'll have some asset protection when it comes to the gold's value. When stocks drop down to record levels, the gold stays steady.

  • Protection Against Inflation

Inflation was notoriously high in the 1970s, and the 2020s are experiencing sticker shock too. While the dollar may be losing value in the marketplace, gold offers growth. In fact, the 1970s saw gold grow to almost a 30 percent gain after a single investment year.

If investors are concerned about inflation, purchasing gold is a safe way to protect those assets. It can be sold for a profit after several years, which can help an investor stay in the black when it comes to gains or losses.

  • Diverse Investments

Gold provides diversity in a growing financial industry that's typically immersed in the stock market. If stocks, bonds, and other investments significantly drop in value, investors' retirement plans will experience losses. Adding gold into the portfolio provides a life raft for the account.

Ideally, investors should mix their portfolio with precious metals, stocks, bonds, mutual funds, ETFs, and other products. No investor will see their account drop to dangerous levels if the stock market has a major downturn. Gold remains a solid investment through the decades.

Understanding Gold IRAs


A gold IRA is an Individual Retirement Account. Investors might be familiar with traditional or Roth IRAs. A gold IRA has the same advantages as these cash-based accounts, but gold is the asset being held in this case.

Gold bars or coins remain in a secure depository of the investor's choice. They can be transferred or sold just like any asset.

Exploring Gold IRA Advantages


Because gold IRAs are so unique, it's critical to understand how they work. They're similar yet distinctly different from the everyday IRA.

Take a close look at gold IRA advantages that can help investors make a financial decision.


Retirement Savings Diversity


As investors near retirement, they're acutely aware of their savings and growth at this point. They may not be as content with their savings as they would like to be. Investing in a gold IRA might be a solid solution.

Investment choices are few in 401(k)s or traditional IRAs, but a gold IRA has additional selections. Gold, platinum, palladium, and silver are all precious metals that can be part of this retirement account. Investors contribute to 401(k)s, IRAs, and gold IRAs to see their diverse portfolios grow.


Asset Protection


Some investors have so much money tied up in their 401(k)s or other IRAs that they don't have extra funds to put into a gold IRA. Investors are often cautioned to never borrow out of their retirement accounts because they'll lose asset growth. However, investing in a gold IRA protects those assets.

Investors can roll over a certain amount of money from a 401(k) or traditional IRA to fund a gold IRA, for example. The rollover becomes purchase money for the precious metals. Investors end up protecting all of their assets with a safe purchase through a gold IRA custodian.


Safe Storage


Another advantage to a gold IRA is security. Because investors are buying actual gold, it must be held somewhere. Gold IRA custodians work with investors to pick a depository specializing in precious metal storage.

With an account in place, investors know their coins and bars are free from any risk. They're only accessible to the custodian with the investor's permission.


Tax Incentives


A gold IRA has the same tax advantages as a traditional IRA. Any gains within the gold IRA won't be taxed until there's a distribution. In fact, investors aren't required to take any distributions until age 72.

This tax incentive also helps as a deduction on the current tax year. Deposits into the gold IRA from the investor's bank account can be used to lower this year's tax bill. A gold IRA is a great way to diversify and safeguard portfolios while protecting income from additional taxes.

Knowing About Gold IRA Disadvantages


Gold IRAs are certainly attractive on paper. However, focusing on the account's disadvantages is important too. Investors can determine if the pros outweigh the cons.

Learn more about gold IRA disadvantages right now.


Administration Time


There's a bit more administration or paperwork that comes with a gold IRA investment. Investors aren't moving around numbers on a computer screen. They're buying and selling actual gold pieces. Investors cannot perform these transactions on their own, so they must work with a custodian who acts as a middleman.

The paperwork involves authorizations and notifications of gold movement, trading, or purchases. Most custodians and gold depositories make this process as streamlined as possible, but there are still some time constraints that cannot be avoided. Patience with transactions is key with a gold IRA.


Unique Fees


Every retirement account has some fees, but gold IRAs are unique. Investors are holding onto real assets in a secure environment. As a result, there are fees associated with the gold itself.

Investors can expect maintenance, shipping, and storage fees for the gold. There are also administrative fees that often go to both the custodian and depository. Although no investor likes fees, the overall gain on the investment should cover these costs. The fees are often linked to the account, which can be paid for every month.


Physical Access Concerns


Precious metal depositories don't operate like self-storage facilities. Investors cannot physically walk in the door and pick up their gold. Any transactions, including complete account withdrawals, must go through the custodian.

Investors might have their gold or monetary equivalent is given to them within days. Because there's no real physical access to gold IRAs, some investors don't feel comfortable with this fact.

These regulations are in place because the federal government wants to protect this tax-incentive investment. Allowing access to everyone can compromise the security and quality of the metals themselves.

Discovering Physical Gold Advantages


Buying physical gold to hold at a home or business is another investment choice. It heralds back to an era when people hid cash in their mattresses so that they always had financial security.

Get familiar with the advantages of physical gold for investment purposes. There's a lot of freedom bound to this purchase.


Purchasing Choices


Investors may want more purchasing power when it comes to precious metals. There are other valuable items besides gold coins and bars. When investors purchase physical gold, they can select different types in the marketplace. They may want to invest in gold or silver jewelry, for instance.

There are many items made of precious metals that can be considered investments. These investors have a different outlook on this financial opportunity. Gold bars and coins might be part of the collection, but investors branch out with other items for even further diversification.


Location Control


Physical gold can be secured anywhere an investor desires. They might have a safe, basement, or other areas in mind. Some investors go as far as spreading the investment around to several properties. Gold stashed in safes on various properties provides incredible security to an investor's financial future.

They might even give some gold to their loved ones for safekeeping. These options are simply impossible with a gold IRA. Location control for the gold gives investors real peace of mind.


No Access Issues


Investors appreciate the fact that access isn't an issue with physical gold. Lack of access can add stress to an investor's life. They feel better about where the gold is located, which allows them to diversify their other investments.

They might start a gold IRA account with a small investment. Investors see where this growth goes over time. In the back of their minds, they know their main investment of physical gold is safe at a location of their choice. The gold IRA is a side investment in their eyes.


Pick up and Go


There's an aspect to investing in physical gold that's truly freeing. If there's ever an emergency, investors can immediately take their gold and take off. This freedom reminds investors of frontier days when every person took care of their own property, family, and business.

Gold will always have value, which allows the investor to sell or reinvest the metal as he or she sees fit. Being able to pick up and go is a real advantage to physical gold.


Breaking Down Physical Gold Disadvantages


Every asset has its downside. Physical gold isn't an exception. Look carefully at these complications that might hinder a solid investment.


Theft Concerns


Physical gold doesn't have to be in a secure location. Investors can hold it wherever they please. Issues arise about theft in these cases, however. If any person hears of where the investor keeps the gold, it can be taken by any curious party. Household break-ins and even safe theft can occur at any time.

A gold IRA places the gold in a safe depository. It's nearly impossible to breach by criminals. Although investors' access to gold in the depository is a concern, the fact that no one can take the precious metal is an important consideration. Thefts occur in any neighborhood at any time.


Authenticity Questions


A real concern that's associated with physical gold purchases is authenticity. Investors might research a purchase as thoroughly as possible, but forgeries are rampant in the industry. There are many fake pieces in the marketplace today.

If an investor pays for a counterfeit item, there's no recourse for the loss. It's simply lost money. Coins, bars, jewelry, and other items can be difficult to authenticate without a professional's assistance.

Gold purchased through a gold IRA has been vetted and moved through a mint or other official business. Every item is certified for the investor so that there are no authenticity concerns. Buying physical gold as an individual investor takes some risk.

Choosing the Right Investment


It can be difficult to predict how well the stock market will perform over time. Experts across the globe will always try to figure it out, but it all comes down to economics. There will always be ups and downs as investments go through their cycles.

Choosing the right investment comes down to diversifying every purchase. For instance, some investors may want a mixture of 401(k)s, gold IRAs, and physical gold. Other investors try both traditional and gold IRAs exclusively.

The right investment allows the investor to have some freedom to buy and sell while gaining some returns. There will never be a sure thing in the investment world. Investors should mix up their portfolios as much as they can to see the overall growth across the years.

The economy will always have its ups and downs. Using gold to protect those investments into retirement is simply a clever financial move. Choosing between a gold IRA and physical gold is a subjective decision.

Investors should select the best investment for their situation. The value should remain solid and grow from there.

Remember to read our list of the Best Gold Investment Companies to work with, before investing your hard-earned savings!

>> CLICK HERE to read our list of the Top Gold IRA Companies. <<

Charles Turner


Hi, I'm Charles Turner, founder of Turner Investments.  I created Turner Investments to provide education and guidance to individuals interested in personal finance.

My goal is to make Turner Investments a valuable resource for anyone looking to learn more about personal finance and make smarter investment decisions.

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