Can I own Gold in my Self-Directed IRA?

Precious MetalsMany people are under the impression that it is illegal to own gold or other precious metals within your self-directed IRA. This is not the case: The law provides very few restrictions on what IRAs can own – and many forms of gold and other precious metals are among the assets that you are allowed to hold in your self-directed IRA.

Why Own Gold?

The United States is currently running an unsustainable budgetary deficit – especially when you take future entitlement obligations such as Social Security and Medicare benefits into account. Meanwhile, the Federal Reserve continues to pursue an inflationary policy of increasing the money supply – electronically printing money by the hundreds of billions – while keeping interest rates pushed down so low that money market and CD investors are experiencing negative real, inflation-adjusted returns.

Monetary and fiscal policies seem to be conspiring against the dollar, and any paper assets denominated in dollars. Investing in tangible property such as gold and real estate are now vital aspects of a diversified portfolio. And self-directed IRAs are a natural way of including these assets in your retirement account.

The Basics

IRS rules require you to retain a custodian to hold any gold or precious metals you own within your self-directed IRA. This is a separate financial institution – not controlled by you or your immediate family – that holds the gold itself on your IRAs behalf.

Furthermore, the IRS also requires your gold or other precious metal investment to be of sufficient standardization and purity. Not every form of gold or precious metal investment will qualify to be held within your self-directed IRA. Specifically, your coins and other precious metals must meet these purity standards:

  • Gold .995+
  • Silver .999+
  • Platinum .9995+
  • Palladium .9995+

Generally, your self-directed IRA can own bars and rounds that have been produced by a refiner, assayer or manufacturer that has been certified by NYMEX/COMEX, NYSE/Liffe, ISO 9000, LBMA, LME, or a national government mint, meeting these minimum requirements for fineness.

Your self-directed IRA can generally own bullion that meets these standards for purity, as well as most minted coins. However, the coins must not be “collectible.” Their worth must be primarily the result of the intrinsic value of the metal and not due to speculation due to their rarity.

The IRS rules effectively disallow your self-directed IRA from owning the following common coins:

  • Proof American Buffalos (United States)
  • Kruggerands (South Africa)
  • Britannias (United Kingdom)
  • Most gold coins minted or issued by the United States prior to 1986.

What can your self-directed IRA own?

Your self-directed IRA can own any precious metal that meets the above standards for purity, provided you don’t own a collectible in your IRA.

Coins to avoid

IRS regulations effectively prohibit owning these coins within a self-directed IRA or other self-directed tax-advantaged account:

  • Austrian Corona and Ducat
  • Belgian Franc coins
  • Chilean Pesos
  • Columbian Pesos
  • Dutch Gilders
  • French Francs
  • German Marks
  • Hungarian Koronas
  • Italian Lira
  • Mexican Peso and Ounza
  • South African Krugerrands
  • Swiss Francs
  • Any coin considered rare or collectable.

The Process

It’s very easy to create a self-directed IRA for gold or other precious metals (also known as a self-directed Gold IRA). The first step is to call American IRA at 866-7500-IRA (472) to set up and fund your account. American IRA is a third party administrator specializing in self-directed retirement accounts. Once your account is set-up and funded, you are ready to begin purchasing gold and other precious metals with your self-directed IRA.

Note: American IRA does not provide individual investment advice. You are in full control of your self-directed IRA investments. As a third party administrator, we simply work to facilitate your investment decisions, and we work with your advisors to ensure that your instructions are executed swiftly.