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There’s much talk these days about buying gold as a means to protect one against market volatility and secure generational wealth. You hear it on the news, in commercials, and at work. It’s almost like a neo-California Gold Rush, so to speak. All the talk is quite warranted.
Question: How do you use physical gold as a hedge against inflation and economic downturns? Better still, how do you fund and invest in physical gold, other precious metals, and unique assets with your tax-advantaged retirement plan?
Answer: a gold IRA. In this article, we’ll discuss the mysterious gold IRA. We’ll cover what it is, how to fund one with a rollover, and what assets you can invest in with a gold IRA. Let’s get started with a brief note on a Noble Gold IRA rollover.
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.
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A Noble Gold IRA rollover permits you to withdraw funds from an existing/older tax-advantaged or employer-sponsored retirement plan and redeposit the funds into a gold IRA.
A gold IRA is a self-directed IRA (SDIRA) with which you can invest in gold, other precious metals, and a variety of other assets that are IRS-approved and IRA-eligible.
Although you can purchase physical gold with a Noble Gold IRA, you cannot hold the physical gold yourself. An IRS-approved custodian must hold the physical gold for you.
The IRS has specifications about the types of physical gold you can invest in with a gold IRA.
The Basics of a Noble Gold IRA Rollover
Noble Gold Investments, a leading gold and silver IRA company, makes it simple to fund a new gold IRA via a rollover. To begin, you simply create an IRA account with Noble Gold Investments. The actual setup process takes less than an hour.
After setting up your Noble Gold Investments gold IRA account, you withdraw funds from your existing tax-advantaged or employer-sponsored retirement plan and redeposit the funds into your Noble Gold IRA. Once you fund your account, you’re ready to start investing in physical gold.
Acceptable tax-advantaged and employer-sponsored retirement plans you can use to fund your Noble gold IRA including your 401(k). Depending on the type of 401(k) you have, traditional or Roth, the distribution you use to fund your Noble Gold IRA might be taxable.
A gold IRA allows you to purchase bars and coins in gold, silver, platinum, and palladium. Noble Gold’s stellar inventory contains the who’s who of IRA-eligible gold coins. Noble Gold also has silver, platinum, palladium, and rare coins.
Traditional IRA vs. Roth IRA vs. Gold IRA
What distinguishes a Noble gold IRA from a traditional IRA and a Roth IRA? Each type of IRA has its own IRS specifications about the types of contributions and investments you can make.
With a traditional IRA, you make pre-tax contributions, have lower taxable income, and enjoy tax-deferred earnings. However, you pay taxes on distributions you must begin taking when you hit your early 70s.
With a Roth IRA and a gold IRA, you make post-tax contributions and enjoy tax-free earnings and tax-free distributions later in life. Since your contributions are post-tax, they aren’t deductible. A traditional IRA is a good idea if you expect to be in a higher tax bracket at retirement.
Traditional and Roth IRAs through brokerages, banks with brokerage arms, or other financial institutions with brokerage arms always entail a custodian and a trustee. What’s the difference between them, and how do they impact a gold IRA? The answers are much simpler than you think.
IRA Custodians and Trustees 101
An IRA custodian serves several key purposes. They help you with all the IRS paperwork and reporting necessary to file when you have a tax-advantaged retirement plan used to invest in assets. In the case of a gold IRA, the custodian also purchases and holds all of the physical gold you invest in with your gold IRA.
A custodian can be a depository, a bank, or a nonbank trustee or nonbank custodian. All gold IRA custodians must be IRS-approved.
If you attempt to store the physical gold in your gold IRA at any location that isn’t IRS-approved, the IRS considers this a distribution (withdrawal), and you’ll be taxed. Noble Gold offers custodial services (a secure Texas depository) as well as its ability to purchase IRA-eligible precious metals.
An IRA trustee helps manage the investments within your portfolio, offering advice and guidance. They can help you diversify your portfolio, informing you what to buy, when, how long to keep it, and when to sell/transfer. Many trustees perform double duty as custodians.
A gold IRA is a self-directed IRA (SDIRA), a type of Roth IRA. Noble Gold can serve as the custodian for your Noble Gold SDIRA, but you must be the trustee. This gives you enormous flexibility and control over how to maximize your gold IRA’s earnings potential.
Assets You Can Hold in a SDIRA
The major advantage of a SDIRA is the flexibility it affords you when investing. A SDIRA allows you to invest in both paper gold (exchange-traded funds) and physical gold. In truth, you can invest in physical gold with any type of IRA. The physical gold just has to be IRS-approved and IRA-eligible.
Unfortunately, most traditional and Roth IRA custodians don’t allow you to hold physical gold, and most brokerages and financial institutions with brokerage arms don’t offer this service.
Instead, they only offer custodial and trustee services for portfolios containing stocks, bonds, and mutual funds. These are typically the products they sell, not gold. That’s why the SDIRA, the gold IRA, is so appealing.
In addition to paper and physical gold, your gold IRA custodian can purchase other assets with your funded gold IRA: real estate, for example. You can use your gold IRA to invest in
You can also use your gold IRA to invest in private equity, such as LLCs, private hedge funds, startups/small businesses, and real estate investment trusts (REITs). Private lending is another viable investment. Use your SDIRA/gold IRA to make promissory notes or lend actual funds via a non-recourse loan.
The loans can go toward the purchase of a vehicle, to an actual individual in the form of a personal loan, or toward the purchase of mortgage notes. Your profits go directly back into the SDIRA, and the party who received the loan makes a repayment to the SDIRA, not to you.
More options you can invest in with your gold IRA include:
The list goes on and on. Precious metals fall under the category of collectibles. Generally, you can't invest in collectibles with an IRA. The IRS makes exceptions for certain types of precious metals you can invest in with your gold IRA.
Types of IRA-Eligible Precious Metals: Bars and Coins
Noble Gold Investments takes the guesswork out of hunting for IRA-eligible gold. IRA-eligible precious metals comprise the bulk of its inventory. You only need to set up your account, fund your account and select IRA-eligible coins.
IRA-eligible gold bars and coins must be at least 99.5% to 99.9% pure. Silver, platinum, and palladium bars and coins must be 99.9%, 99.95%, and 99.95% pure, respectively. Further, the IRS stipulates the exact gold coins that are IRA-eligible. The following is a short list for your info.
The American Gold Eagle Coin is among the most coveted U.S. gold coins ever. There are 1/10-ounce, 1/4-ounce, 1/2-ounce, and 1-ounce denominations with face values of $5.00, $10.00, $15.00, and $25.00.
Their intrinsic values far exceed their face values, with the 1-ounce denomination reaching an intrinsic value of more than $1,800.00 in 2012.
There are two types of American Gold Eagle coins: bullion and proof. The U.S. Mint produced the bullion coin for the general public. The mint produced the proof coin for collectors and archival purposes. Proof blanks undergo special treatment.
They receive hand-polishing and a double-strike within a press containing specially polished dyes. The mint then packages proof bullion uniquely to both show off and preserve each coin’s unique appearance and integrity. Noble Gold Investments has access to both bullion and proof American Gold Eagle coins.
Introduced in 1979, the Canadian Gold Maple Leaf coin is fairly recent. Its purity value is 99.9999%. Limited special editions can have a purity value of 99.99999%, some of the purest gold coins available anywhere. There are six weight denominations ranging from 1 gram to 1 ounce.
Occasionally, the Royal Canadian Mint issues design variations to celebrate special occasions, such as the Olympic Gold Maple Leaf coin and the Hologram Gold Maple Leaf coin.
IRA-eligible, the Canadian Gold Maple Leaf coin is popular among coin collectors and still serves as legal tender in Canada, with the Royal Canadian Mint minting it and the Government of Canada issuing it annually.
Easily one of the most charming IRA-eligible gold coins, the Australian Gold Kangaroo coin came out in 1986. Aptly named, its reverse showcases a mother and baby kangaroo leaping across the Australian landscape or the image of a single kangaroo leaping, depending upon the year of minting.
The world-renowned Perth Mint makes this coin out of .9999 gold, a very high purity value.
The coin’s design changes periodically, making it another of those items that coin collectors lust after and seek. There is a wonderful range of denominations up to 1 ounce, including a 1/20-ounce coin, roughly a little over 1 gram.
Every so often, the Perth Mint produces Australian Gold Kangaroo coins in weight denominations of 2 ounces, 10 ounces, and 1 kilogram.
Interchangeably referred to as the Austrian Gold Philharmonic Coin and the Vienna Philharmonic Coin, the Austrian Mint debuted this coin in 1989. In a word, it’s gorgeous, with an obverse showcasing a pipe organ and the reverse showcasing string instruments, brass, and woodwinds.
The obverse and reverse designs are personal illustrations/designs of the Austrian Mint’s chief engraver. The designs have never changed since the Austrian Mint introduced the coin. When it first appeared in 1989, there were only two denominations, a 1/4-ounce, and a 1-ounce.
Today, there are five denominations of the Austrian Gold Philharmonic coin: 1/25-ounce, 1/10-ounce, 1/4-ounce, 1/2-ounce, and 1-ounce. Other notable denominations include a 1,000-ounce coin (called the “big phil”) released in 2004 in celebration of the coin’s 15th anniversary.
Five years later, the Austrian Mint released a 20-ounce coin to celebrate the 20th anniversary of the coin’s mintage.
Gold IRA Contribution Limits
Regardless of IRA type or how many IRAs you have, the IRS caps your total annual contributions. The IRS adjusts and imposes these limits annually according to a variety of factors, namely inflation. In recent years, annual IRA contribution limits ranged from $5,500.00 to $7,000.00 or $450.00 to $580.00 monthly.
Those over 50 years of age can contribute an additional $1,000.00 annually to “catch up.” The contribution limits apply to all of your IRA accounts combined. When you reach your early 70s and become subject to the required minimum distributions from your gold IRA, you can receive distributions in one of two ways.
The Noble Gold Investment depository can ship your physical gold to you. Alternatively, you can sell your gold distribution to the depository and receive payment. If you reclaim possession of your physical gold, you have the option of exploiting its liquidity as a continued hedge against market volatility.
How Much Gold Should You Invest in With Your Noble Gold IRA?
Experts disagree about how much gold you should invest in your gold IRA. The expert advice ranges, suggesting your portfolio contains 5% to 10% gold or 5% to 20% precious metals in total.
Exactly how much of it should be gold isn’t etched in stone. These estimates correspond to a traditional portfolio containing 60% stocks and 40% bonds.
Ultimately, the choice comes down to your personal investing goals, your finances, your level of risk tolerance, and other factors.
Performing due diligence as the trustee of your gold IRA can help you better determine how much of your portfolio should be gold. Fortunately, Noble Gold has you covered when it’s time to start padding your gold IRA and your portfolio with high-quality, authentic IRA-eligible gold.
Remember to read our list of the Best Gold Investment Companies to work with, before investing your hard-earned savings!