“Gold IRAs can be either traditional or Roth options,” says Daniel Sentell, former director of communications at Broad Financial, a Monsey, New York–based financial services company that offers these accounts. Whichever version, a gold IRA can only be invested in actual gold, be it coins or bullion.

According to Brett Gottlieb, a financial advisor and founder of Comprehensive Advisor in Carlsbad, California, the first thing to consider is whether you want to have a physical investment in your portfolio rather than a gold-company stock or mutual fund or an exchange-traded fund (ETF) that tracks a gold index.

If you opt for the actual metal, certain criteria apply for it to be held in an IRA. “The precious metal coins or bars must meet IRS fineness standards and be held by the IRA trustee instead of the IRA owner,” says Moy. “The gold must be stored in an IRS-approved depository.”

In other words, no stashing the bullion or specie in safe deposit boxes, home safes, or closets. “All other rules about IRA contributions, disbursements, and taxes apply,” Moy adds.

Key Takeaways

• A gold IRA is a self-directed individual retirement account that invests in physical gold and other precious metals.
• A gold IRA often comes with higher fees than a traditional or Roth IRA that invests solely in stocks, bonds, and mutual funds.
• A gold IRA can be a good hedge against inflation but is also concentrated in a single asset class.
• Physical gold held in an IRA must be stored in an IRS-approved depository.
• Required minimum distribution rules apply to gold IRAs.