Disclaimer: The information provided on this page is for educational purposes only and is not intended as investment advice. Refer to a professional for investment advice. We may receive a referral fee from some of the companies featured in this article.
Gold has received much attention from investors and has been the source of many financial discussions in recent years. As investors seek to hedge against economic downturns, gold has offered a stable investment to hold onto with the promise that gold will always have some value. However, another should be considered alongside direct investment into gold.
Gold IRAs offer an alternative to traditional IRAs and the direct purchasing of gold and other precious metals that combine the best of these financial instruments. Gold IRAs provide a conservative and stable way to diversify your investments. It has the flexibility and value of investing in precious metals while giving the tax advantage of an IRA.
If you need help figuring out what a Gold IRA is or are trying to figure out how to get started, then read on. This article covers the fundamentals of Gold IRAs and gives you a look at two of the best IRA companies in the industry so that when you are ready to make a decision, you are fully informed.
In this article 2 Gold IRA Companies:
Money Magazine "best overall" Gold IRA Company ⭐⭐⭐⭐⭐
"Company of the Year” by the American Business Awards ⭐⭐⭐⭐⭐
What is a Gold IRA?
A Gold IRA (individual retirement account) is a particular type of IRA that holds its value in gold and other precious metals rather than stocks or mutual funds like in traditional IRAs. The precious metals that are usually traded include gold, silver, platinum, and palladium, and these metals are generally in bullion or coins. Gold IRAs sometimes also invest in gold or precious metal-related ventures, such as stock in mining companies or exchange-traded funds.
Gold IRAs are separate from traditional IRAs, requiring you to work with companies expressly set up to handle precious metals, though these accounts follow the same as traditional IRAs. These accounts require different brokers because of the buying and storing precious metals.
Gold IRAs usually have higher fees due to the specialized custodians required to handle the account. The storage of the precious metals must be at a facility approved by the IRS.
How does a Gold IRA work?
To have a Gold IRA account, you must go through an approved broker to buy or sell gold and other precious metals. You are considered the owner of these metals, while the Gold IRA company acts as the mediator between you and the custodian. Depending on the company, you may have a choice of financial custodians and depositories, or you may be limited to the ones chosen by the company.
When you open a Gold IRA account, you will have options on how to fund the account. This can be done in many ways, including rolling over assets from a traditional IRA account, a 401K, or direct funding through cash, check, or wire transfer.
Unlike most traditional IRA accounts, a Gold IRA account is self-directed. This gives you greater flexibility in controlling when and what you buy, though it will require a higher level of personal involvement and some paperwork.
Advantages of a Gold IRA
Gold IRAs can offer stability and diversification to any financial portfolio. Gold and other precious metals are assets that have historically remained stable or increased in value over time and give you the same tax advantages as a traditional IRA. Let’s break these advantages down and examine why they are essential.
Gold is a highly stable commodity. While its value fluctuates, it has averaged an average change of 11.27% annually in the last ten years, with a general upward trend. Silver and palladium are similarly situated. Of all the precious metals, only platinum has trended downward slightly over the previous ten years, but it has remained relatively stable.
Additionally, investments in precious metals are generally stable because they will always have value. Owning stock in a company is subject to its viability in the marketplace – a company that folds makes that stock worthless. Even mutual funds are subject to market trends and are not recession-proof.
Investments come with risks. When you buy stock in a company, you are risking that stock losing value should that company’s performance take a turn for the worse.
Regarding investments and financial portfolios, the common wisdom is not to put too many eggs in one basket. Instead, you lower risk by having your money in several areas – stocks, bonds, mutual funds, retirement accounts, etc. This is known as diversification.
Gold IRAs diversify your assets by placing your money into a commodity that is not expected to depreciate significantly. If other aspects of your portfolio are not doing well, a Gold IRA will help counterbalance your losses by leaving you with a stable investment.
The value of gold continues to rise each year. Since 2013, gold has increased from $1,201.50 per ounce at the close of the year to around than $1,750 per ounce in 2022, and is expected to close higher by year's end. In addition, gold, platinum, palladium, and other precious metals are required in the technology industry, and their growing scarcity increases the overall value of the Gold IRA holdings.
Palladium, in particular, has had nearly constant growth over the last decade. Palladium went from $713 per ounce in 2013 to about $1,780 in 2022, with an annual average growth of 13.27%. The value of palladium is expected to climb even higher before this year’s end.
4. Tax Advantage
If you buy gold or other precious metals directly, you will have to pay capital gains taxes on the metals you sell. This means you will lose some of your money to taxes yearly.
With a Gold IRA, that tax is deferred until you have closed your account and collected the gains you have made through the life of the report. Your account can grow tax-free; the taxes only come when you withdraw funds to live on during retirement. It also offers you the advantage of traditional IRAs by making investments into the IRA from your income, meaning there is less to tax.
2 Best Gold IRA Companies Reviewed:
If you are interested in a Gold IRA, the next step is finding a reputable company. There are several options to choose from, though there are a few ‘gold’ standards in the industry that are always excellent choices.
Here are the top picks below to help you get started. Augusta Precious metals and Goldco have excellent customer reviews on Google and TrustLink and an A+ rating with the Better Business Bureau. They set the standard for Gold IRA companies and are the top performers in the business.
#1 - Augusta Precious Metals - "Best Overall" Gold IRA Company
Augusta Precious Metals is one of the industry's most reputable Gold IRA companies. They are one of the top recommended Gold IRA companies, holding the “Best of” rating from TrustLink six years in a row and having a Consumer Affairs rating of five out of five.
Money Magazine nominated them as the best overall in 2022 and praised them for their customer education. “…They point out specific scams, such as the “excessive free silver scheme,” and offer other materials that help consumers know what to watch out for, such as their “10 Gold IRA Dealer Lies” and “15 Bad Reasons to Buy Gold” videos.”
If you like celebrity endorsements, Joe Montana, the Hall of Fame Quarterback, is featured prominently on their page as a customer and a paid Ambassador for Augusta Precious Metals. Mr. Montana attended Augusta’s highly regarded one-on-one web conference to learn more about the company and gold IRAs. “I diversified my retirement with precious metals from Augusta,” Joe Montana is quoted as saying. “You can count on them.”
This decade-old company has a reputation for excellent customer service and is competitively priced. They help customers learn about the variety of IRS-approved coins and bars available.
The downside is that there is no way to set up an account online, and they have a relatively high minimum deposit fee of $50,000, but this does make them perfect for customers who have been saving for years. That said, Augusta Precious Metals is still rated among the top Gold IRA companies time and again. Here are some perks of working with Augusta Precious Metals:
A fantastic library of information on investing in gold and silver
Offer gold and silver coins and bars for direct purchase
Award-winning customer service that is the highest-rated in the industry
Online Ratings, Reviews, & Complaints
In their years of business, Augusta Precious Metals has built a strong reputation as a trusted gold IRA dealer. Below we've curated a list of their ratings across all of the trusted verified client review sites.
Better Business Bureau
|5 Star Avrage|
Google My Business
Business Consumer Alliance
Augusta Precious Metals Phone Number: 844-917-2904
Augusta Official Website
Unique, free one-on-one educational web conference designed by Augusta’s on-staff, Harvard-trained economist (A must attend)
Augusta free educational Gold IRA Guide:
#2 - GOLDCO - "Company of the Year” by the American Business Awards
Goldco is another competitor for the top spot, snatching NASDAQ’s number one recommendation as the best overall Gold IRA company. Goldco boasts about being on Inc 5000’s list of Fastest Growing Private Companies and has been selected as “Company of the Year” by the American Business Awards two years in a row.
Goldco has placed over $1 Billion in gold and silver.
Goldco is comparable to Augusta Precious Metals in terms of customer service and length of service in the industry, though it is more accessible to first-timers with a budget. Its minimum deposit is only $25,000, which comes significantly under most of its top-tier competitors.
Like Augusta Precious Metals, Goldco has its champion celebrity endorser as well. TV personality Sean Hannity is there to greet you on the front-page splash of Goldco’s website, with the endorsement “Goldco is the precious metals company that I recommend to my audience, friends and family.” But that’s not all – Goldco also has the support of notables such as Chuck Norris, Ben Stein, and Stew Peters.
Goldco offers a wide range of storage options. If you are interested in buying gold and silver directly, Goldco is also a reputable industry leader and can assist you in finding what you are looking for. If you are new to investing, Goldco offers a blog that helps you invest smartly and provides news articles to keep you updated on the latest precious metals news.
Goldco is a solid choice for anyone looking to get started with a Gold IRA. Here are some cool features of working with Goldco:
If you invest $50,000, you get 5% back in free silver; for investments of $100,000 or more, you get 10% in free silver back.
Deals in Gold, silver, platinum, and palladium bars and coins for Gold IRAs and trades gold and silver coins and bars directly
Uniquely minted coins, such as the Chuck Norris “Five Principles” silver coin
Guarantees the highest buyback price on your precious metals.
Gold IRAs are a tangible way of financial diversification for people looking to expand their portfolios into precious metals without paying the tax burden every time they sell. Precious metals are a conservative financial risk, meaning they are not expected to offer rapid or significant returns. However, some precious metals like palladium will see tremendous growth throughout the life of your Gold IRA.
A Gold IRA is self-directed, giving you more control over your finances than a traditional IRA. In periods of market uncertainty, precious metals, particularly gold, perform strongly and are a good choice for hedging against economic losses.
If you are considering investing in precious metals, remember to keep your investments to 5% to 15% of your total assets. Augusta Precious Metals and Goldco are some solid Gold IRA companies that can help you on your journey, regardless of whether you are a new investor or an old hand. Take some time and look into them today and see if setting up a Gold IRA is right for you.
Frequently Asked Questions
Are there risks to investing in Gold IRAs?
Gold IRAs have the downside of not paying dividends or earnings to your account while you are holding it, nor is its value expected to appreciate quickly. In addition, the money that you have invested is not liquid – there may be fees or penalties associated with withdrawing your funds too early.
In addition, the value of gold and other precious metals within a Gold IRA depends on scarcity. When you pay into the Gold IRA, you buy gold and other precious metals and store them in vaults, creating an artificial scarcity that drives up their value. Until you move these metals out of storage and are used in industry, they supply nothing to your account.
Finally, the stability of the precious metal’s value also works against its appreciation. While individual years from 2013 to 2022 saw growth as high as 24.43%, the average 10-year annual change has been only 1.61%. Gold performs well during recessions but slows down when the market performs well.
Should I invest in Gold IRAs?
Opening a Gold IRA is a sound decision if you want to add diversity to your portfolio. Gold and other precious metals are not generally considered highly liquid assets, which makes managing them through Gold IRAs all the more viable.
Both IRAs and precious metals are long-term investments. This means that once you park your money in precious metals, you will let it sit for a while as it appreciates. If you are looking into precious metals as a way to expand your portfolio, then Gold IRAs are the way to go.
That said, diversity is critical. Not only should you spread your financial risk with other instruments, but a Gold IRA should make up only a tiny portion of your portfolio – between 5% to 10%. This includes all precious metals within that Gold IRA – diversification of precious metals. At the same time, a good idea is not diversification of finances since you are investing in the same financial class.
Can I store the gold at my house?
No. The gold must be stored in facilities approved by the IRS, as per Internal Revenue Code Section 408(m).
What are the costs of opening a Gold IRA?
You can expect to pay an average of $100 when opening your Gold IRA and in annual maintenance fees. Depending on the company and the size of your investment, you may also have fees when purchasing and storing precious metals.
Is investing in a Gold IRA better than buying gold?
While buying and holding gold directly have different considerations, both can have a place in your portfolio. Buying gold does not offer you the tax advantages of a Gold IRA. However, there are no fees associated with opening or maintaining a Gold IRA, and you have more flexibility in the type of gold you purchase and how it is sold.
Why do the purchase instruments come in coins or bars?
Buying coins can sometimes return more profits due to their valuation, which tends to be higher than the spot price of bullion. That said, there is no guarantee that the coins will have a higher worth, which will be determined by the collector.
Money Magazine "best overall" Gold IRA Company ⭐⭐⭐⭐⭐
"Company of the Year” by the American Business Awards ⭐⭐⭐⭐⭐
* What is a Gold IRA & 2 Best Gold IRA Companies Reviewed
View source version on newsdirect.com: https://newsdirect.com/news/what-is-a-gold-ira-and-2-best-gold-ira-companies-reviewed-674216761