Gold IRAs: A Golden Opportunity?

By: Dana Udumulla

Key Points 

• A Gold IRA is another name for a Self-Directed IRA (SDIRA) that invests in gold and other precious metals.
• Gold IRAs can provide retirement portfolio diversification, potential inflation hedging, and overall growth opportunities.
• Using a Gold IRA is easy at Madison Trust.

Investors worldwide generally recognize the allure of gold. If you open a Gold IRA, you can potentially grow your retirement with gains from investments in gold and other precious metals. Gold IRAs can be lucrative, but how do you know if this type of account is right for you? Below, we'll break down the basics of Gold IRAs and lay out the potential benefits of investing in gold. 

What Is a Gold IRA?

A Gold IRA is another name for a Self-Directed IRA (SDIRA) that focuses on physical gold, silver, platinum, and palladium. Self-Directed IRAs allow alternative investments including precious metals, while standard IRAs are typically limited stocks, bonds, and mutual funds. 

Gold IRAs take advantage of gold’s historic stability while providing the tax advantages associated with retirement investing. If your underlying setup is a Self-Directed Traditional IRA, you can defer taxes until you take a distribution. If your account is a Self-Directed Roth IRA, any gains are tax-free.

Why Consider a Gold IRA?

If you’re interested in opening a Gold IRA, here are a few of the potential benefits that might inspire you to take the next step:

Retirement Portfolio Diversification

Spreading your investments across asset classes might limit losses if one market underperforms. Physical gold diversifies your portfolio with a tangible asset that doesn't depend on the stock market. 

Hedge Against Inflation

Overextended periods of inflation can possibly sink the value of your retirement account if it's not diversified. Economists consider gold a store of value, or an asset that can potentially keep pace with inflation and buffer your retirement savings. Gold prices often rise as currency weakens. 

Potential for Growth

Gold always has the potential for notable growth, as its value is affected by forces like market demand, scarcity, and political and economic uncertainty. 

Tax Benefits

Gold IRAs provide the same tax benefits as standard IRAs, allowing your investments to grow tax-deferred or tax-free.

Things to Keep in Mind

Before you open a Gold IRA, consider the following factors:

• Potential Fees: Establishing and maintaining a Gold IRA can involve higher fees than those associated with standard IRAs. These fees can include storage, insurance, and custodian fees, which may affect the overall cost-efficiency of your investment.
• Gold Price Volatility: The price of gold can fluctuate significantly due to market conditions, economic indicators, and geopolitical events. While this can offer opportunities for appreciation, it also introduces a level of possible risk
• Liquidity Concerns: Gold is typically less liquid than cash or stocks, potentially complicating quick access to your funds. Selling gold, especially in larger quantities, may require time and could be influenced by prevailing market rates, impacting the speed and value of withdrawals.

How to Get Started with a Gold IRA

Madison Trust simplifies the process of setting up a Gold IRA and investing into a few easy steps:

• Open and fund a Self-Directed Gold IRA with Madison Trust. 
• Open an online account with FideliTrade, a Delaware Depository Company. 
• Visit FideliTrade's Products & Prices page to choose your gold investments and call to lock in your price. 
• Complete FideliTrade’s Trade Confirmation Form and Madison Trust's Investment Authorization Form. 
• Madison Trust will wire your funds to Delaware Depository. 
• Delaware Depository will securely store your gold.

Ready to get started? Schedule a discovery call today!