Gold IRA vs Physical Gold

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The buzz around gold investment is growing, driven by concerns of a potential financial downturn reminiscent of 2008's crisis. That period saw widespread job losses, evaporated life savings, and foreclosed homes, prompting a heightened sense of caution in asset protection today.

So, how does one safeguard and even enhance their financial assets? Certain assets have a proven track record of maintaining value and liquidity, with gold being a prime example.

However, investing your hard-earned savings is a significant decision. When considering the inclusion of precious metals in your investment portfolio, the challenge lies in identifying trustworthy companies.

To address this, we've conducted thorough research across the industry, pinpointing a select few companies that stand out for their exceptional customer service standards.

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

Gold serves as a secure investment, a shield against inflation, and a safeguard for your portfolio during market fluctuations. But what's the better choice: investing in gold through a gold IRA or purchasing physical gold? This article explores that question.

We delve into the specifics of investing in gold via a gold IRA compared to owning physical gold, highlighting the advantages of each approach.

The Benefits of Investing In Gold

Investing in gold, be it through a Gold IRA or acquiring physical gold coins, is a timeless strategy to diversify wealth and hedge against market volatility. Gold's intrinsic value has perennially bolstered investment portfolios, offering potential returns that are less correlated to the equity and bond markets. This precious metal serves as a safe haven asset, often appreciating during times of economic uncertainty. Adding gold to your investments can provide a tangible form of wealth that has endured through countless market cycles.

Diversification of Your Portfolio

Diversifying a portfolio is a key reason many people invest in gold. Even skeptics acknowledge that including gold in an IRA contributes to a well-rounded investment mix.

The traditional advice is to split your investments among stocks, bonds, and cash - typically 60% in stocks, 30% in bonds, and 5% in cash. True diversification, however, involves investing in various asset classes across different global regions or sectors.

Assets that thrive only when the stock market is strong are not always reliable. In times of financial crisis, these assets often suffer significant losses.

Gold, however, often performs well regardless of the stock market's condition. Its price usually rises when other markets fall, making it an effective hedge against inflation and a valuable component of a diversified, robust investment portfolio.

Mitigation of Risk

Gold has a history of performing well even when the stock market struggles, maintaining its value steadily. Its easy convertibility to cash offers stability, especially when the prices of other assets are dropping.

A Defense Against Inflation

Gold is traditionally seen as a safeguard against inflation, consistently holding its value in an investment portfolio, even in periods of high inflation. In our country, we haven't often faced extreme inflation, but that's starting to change. Inflation rates haven't been this high in over forty years and continue to climb.

During the 1970s, known for stagflation, inflation hit 11% in a sluggish economy. In that decade, gold's annual growth rate exceeded 30%, and even when adjusted for inflation, it was over 20%. These are remarkable figures, particularly in an unstable economy with soaring inflation.


Gold's reliable value and steady performance in difficult economic times make it highly attractive during periods of high inflation. This is why many investors are turning their attention back to gold.

The Growth of Assets

Gold is not only a protection against inflation and a safe option in market downturns, but it also proves valuable in market upswings. Since 2001, gold's annual growth rate has been 9.45%. In comparison, the S&P 500 and the Dow Jones have annualized growth rates of 4.82% and 4.94% respectively since 2002. This shows that gold maintains or increases its value even in a strong economy with low inflation.

The Gold IRA: the Advantages

You might have come across the term "gold IRA" on TV or in advertisements, often referred to as a "precious metals IRA." So, what exactly is a gold IRA?

A gold IRA offers an intriguing way to invest in physical gold. It's a special kind of individual retirement account that lets you invest in physical gold bars and coins.

With a gold IRA, you enjoy the same tax benefits as with any other IRA. The difference is that a gold IRA allows you to hold physical gold bars and eligible bullion coins, leveraging the advantages of gold ownership.

While owning physical gold has its benefits, investing in it through a gold IRA comes with its own unique set of perks. Let's explore them.

Protecting Your Retirement Assets

Your gold IRA has the same tax benefits as other retirement accounts like a 401(k), 403(b), TSP, or traditional IRA. These advantages apply to your gold IRA as well - see our resource on Gold IRA vs 401k for more information.

To start investing in gold, you first need to fund your gold IRA, often through a rollover from an existing account like a 401(k). This process involves transferring assets from your current retirement account, such as a 401(k), 403(b), TSP, or IRA, into your new gold IRA.

retirement savings

Typically, a gold IRA custodian can handle the rollover process from a 401(k) to a gold IRA. This IRA allows for pre-tax contributions, meaning your contributions are tax-deductible, and gains grow tax-free.

Taxes are only due when you start taking distributions. At that point, you can choose to receive your physical gold or sell it back to the depository in exchange for a check or wire transfer.

Growth of Assets Tax-Free

Gold IRAs are available in two types: traditional and Roth. Both offer the chance for your assets to grow tax-free.

In a traditional gold IRA, you invest in IRA-eligible gold bars and coins using pre-tax contributions. While the gains are tax-free, you will pay taxes on withdrawals later.

With a Roth gold IRA, your contributions are made after taxes. You invest these in IRA-eligible gold, and the gains are tax-free. Additionally, you don't pay taxes on the money you withdraw.

Savings Diversification

Sometimes, retirement plans like 401(k)s or IRAs can feel restrictive with their limited investment options. You might find the choices unappealing, and the combination of fees and average performance can hinder your money's growth.

This is why transferring or rolling over funds from a 401(k) to a gold IRA is becoming popular. A gold IRA opens up a broader range of investment opportunities, including the unique option to physically own gold as part of your portfolio – something not available with other retirement plans.

You also have the flexibility to transfer or roll over just a part of your existing retirement funds, not necessarily the entire amount. An IRS-approved gold IRA custodian can guide you through this process.

Secure Gold Storage Facility

By law, an IRS-approved custodian must manage the assets in your IRA, and this includes a gold IRA. The physical gold in your gold IRA is kept in a secure, IRS-approved bullion depository under the care of an IRS-approved custodian.

gold storage unit

Providers of IRA-eligible gold work with reputable, IRS-approved precious metals depositories. These depositories have a long history and many years of success in securely storing and safeguarding precious metals. With their robust security measures, your gold in the IRA is protected around the clock.

Owning Physical Gold Advantages

Some individuals believe their retirement assets are too small to warrant protection, and not everyone with retirement savings wants to invest in a gold IRA. Everyone's situation is unique, and personal choice is important.

For those who favor tangible assets, physical gold offers several benefits. It can be bought easily and discreetly, and delivered straight to your doorstep.

gold physical

Access Any Time

Receiving gold right at your doorstep can be an extraordinary experience. There's a unique charm in physically handling pure gold. This can also be a memorable moment to share with your children or grandchildren, introducing them to the feel and appraisal of high-quality gold.

Possessing gold provides the advantage of having an instant cash resource. Gold's universal acceptance and its propensity to increase in value during market downturns make it an adaptable asset, particularly useful in navigating through financially challenging periods.

Distribution Management

Owning physical gold puts you in control of its distribution. You have the option to safeguard it in a home safe, or find a unique hiding place such as a cellar or a specially constructed bunker under your house.

Alternatively, you can choose to keep it in a bank safe or a safety deposit box. This ensures that your gold is accessible whenever you, a family member, or a trusted friend needs fast cash or collateral. The practical applications of gold in real-life scenarios are indeed significant.

Highly Portable

Gold bullion coins and bars offer remarkable portability. For instance, IRA-eligible gold bars like the PAMP Suisse are convenient to pack, transport, and convert into cash globally. When you need to move, taking your gold along is akin to carrying your wealth and security.

The ability to physically carry your gold often provides peace of mind. Given that gold's physical size is small compared to its value, its portability is enhanced. You can easily transport a value of hundreds of thousands of dollars in a simple jacket pocket or handbag.

Asset Flexibility

Owning physical gold and investing in a gold IRA are both wise choices in numerous scenarios. Holding gold physically is a strategic method of diversification within your overall retirement plan. Flexibility and diversity are key elements in any investment portfolio.

How flexible and diverse is a gold IRA? While both owning physical gold and investing through a gold IRA are smart investment approaches, they each offer distinct benefits and differences.

Details of a Gold IRA

physical gold

Investing in a Gold IRA offers investors the perks of precious metals IRAs, with the backing of internal revenue regulations. This investment vehicle involves a depository that securely stores your gold, requiring detailed accounts management. There is a framework of paperwork and fees to establish and maintain your IRA. Nonetheless, the gold IRA shines as an investment strategy, providing tax-advantaged growth of assets and savings diversification. Navigating the nuances between different accounts is crucial for optimizing the benefits of your gold IRA.

Gold Kept in a Depository

When you invest in gold through a gold IRA, the IRS mandates that your physical gold be stored with an IRS-approved custodian at a secure depository. This location holds your IRA gold.

If you take physical gold out of your IRA, it's considered a distribution, much like a regular IRA withdrawal. The IRS treats this as taxable income, and you may face taxes and potential penalties.

Since your IRA gold stays in a remote depository until you withdraw it, you might not see your gold in person for a long time. If this is a concern for you, then buying and personally holding physical gold could be a better option.

Paperwork and Fees

Gold and its management come with a price. The custodian who manages your gold IRA charges fees, which are both unavoidable and essential.

Your gold IRA custodian plays a crucial role in keeping your account compliant with IRS regulations. They assist in completing and filing important tax documents and carry out your investment instructions, like buying or selling.

Apart from the custodial fees, there are also account fees to consider, including depository charges. These fees can be annual or may follow different schedules.

Details of Owning Physical Gold

The intricacies of owning physical gold entail considering aspects such as theft or damage to assets, driving many to buy gold coins for their tangible value. Physical gold represents not just a precious metal but a resilient asset amidst market volatility. Individuals value physical gold for its asset flexibility and the option to hold gold coins as part of their precious metals portfolio. However, possessing gold also involves safeguarding these assets, highlighting the importance of meticulous planning against potential theft or damage.

Gold Kept at Home

Buying gold to keep at home means its authenticity isn't officially verified. When you want to sell such gold, proving its authenticity can be challenging. Remember, not all gold is of the same quality.

Purchasing high-quality, collectible bullion and proof coins is a complex task, usually best handled by experts. The IRS specifies strict criteria for what qualifies as IRA-eligible gold. This gold must be 99.5% pure, and only certain coins and bars from top-tier mints meet the standard.

Buying gold from unverified or non-reputable vendors, or those without a Better Business Bureau (BBB) rating, carries risks. And keeping gold at home brings its own set of considerations.

The Possibility of Theft or Damage

Keeping valuables like gold at home makes them susceptible to theft and damage. This is the reason many of us invest in security features like video doorbells and surveillance systems. Your gold at home faces significant risks from theft, fire, bad weather, and natural disasters.

Moreover, just having gold in your home can draw unwanted attention. If people find out, it could attract those with bad intentions. The thought of losing your gold through theft or damage is a worry nobody wants to deal with.

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

A good question to ask is, why not have both? Investing in gold through a gold IRA is a smart way to secure your future. And having physical gold at home gives you the flexibility of having quick access to cash for emergencies or when the market isn't doing well.


Guard against the financial setbacks reminiscent of the 1970s stagflation or the 2008 economic crisis by proactively reinforcing your investment strategy. The resilience of your portfolio is paramount, particularly because once investment losses occur, recovery can be fundamentally arduous—if not altogether elusive. Such an emphasis on readying oneself can't be overstated; the diligence you demonstrate today in safeguarding your assets inherently positions you more favorably for the post-crisis landscape.

Procrastination in the realm of investment protection is a luxury you can ill afford. It's crucial that you strategize the diversification of your portfolio without delay. Contemporary investment diversification avenues, such as integrating a gold IRA or acquiring physical gold, offer substantial benefits, including hedging against inflation and potential enhancement of financial stability. These investment vehicles, relative to other asset classes, may serve as a bulwark for your savings amidst volatile market conditions. Delve into the myriad benefits and consider the comparative merits of a gold IRA versus physical gold today to anchor your financial future.

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Carson Ash

After earning my degree in Economics from Princeton University, I started on the Wall Street grind, working for J.P. Morgan as a Financial Analyst and a Professional. Over those years, I learned a lot about investment banking and how to diversify portfolios. I later developed a strong passion in Precious Metals and Gold IRA investing companies, helping hundreds of clients reach retirement earlier than ever before.

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