Gold IRA vs Holding Physical Gold: Which is the Better Investment Option?

Many people wonder if there is a difference between investing in a gold IRA and physically buying an ounce of gold. This article will examine some significant differences you should consider when deciding which type of investment would suit your needs. We'll also explore the benefits, how to get started, and the downsides to each method.

What is a gold IRA?

A gold IRA is an individual retirement account that you invest in using gold as the investment vehicle. You purchase physical gold from a dealer and store it with a custodian, who will oversee the transaction. The custodian will then hold your gold, and it can be accessed when needed via check or wire transfer.

How does a gold IRA work?

When you first set up a gold IRA, you need to decide if you plan on investing in gold bullion coins like American Eagles or Canadian Maple Leafs. When the gold is in your physical possession, it's called "bullion." You can also choose to invest in specific gold bars and more than one bar at a time if you wish. Once your money has been deposited into the account, you can choose to buy physical gold from another certified vendor that accepts gold IRA deposits. You can also have your investment firm buy the gold and store it at a secure location.

What is a gold IRA rollover?

A gold IRA rollover is an option that allows people who have existing gold IRAs to transfer their assets from a previous custodian to a new one. It's essentially the same as opening a new account, but you aren't required to buy physical gold this time around. Even if you don't have any IRA assets to transfer, you can still consider rolling your retirement funds into a new account for more investment options and advantages, like tax breaks.

How can you invest in a gold IRA?

If you are interested in investing in a gold IRA, you can sign up for an account with a broker. They will help you set up the account and choose the best gold items for your investment goals. You can also invest in this firm's mining stocks, ETFs, and mutual funds, but gold IRAs have traditionally been the most popular option among investors.

Key Differences Between a Gold IRA and Physical Gold

Before you choose one over the other, it's essential to understand the differences between a gold IRA and physical gold. You may not realize any actual differences until you invest in each and have tried both. Here are some key points that you should consider when making your decision:

Pros and Cons of a Gold IRA


  • Liquidity: Gold IRA investments are liquid, which means you can sell them anytime. It is a benefit of investing in gold bullion coins or bars. You can also sell your mining stocks and mutual funds, but it might have unwanted consequences if you attempt to sell other investments.
  • Diversification: It's always a good idea to invest in more than one type of asset when saving for retirement. When investing in a gold IRA, you can invest in gold bullion coins or other types of bars and coins.
  • Tax Advantages: When you purchase physical gold, it's often taxed according to your tax bracket. Since many people sell gold at a loss, it can also result in capital gains that are not reported as income on your taxes. When you invest in a gold IRA, your capital gains on selling gold items at a loss are not taxed.
  • Arbitrage: Since you can sell gold at any time, you can be more selective about where you trade it. Arbitrage is buying something at a lower price and selling it at a higher price, which causes the money to travel from one party to another to have the same amount of money in your pocket.


  • Liquidity: You can't always sell your gold at a moment's notice. The value of the metal has to change, and you have to find a buyer who is willing to pay close to the item's current market value.
  • Storage Concerns: Physical gold should be stored securely in an IRA custodian. It's important to avoid keeping the gold in your home because it could be stolen or damaged. The same is true for mining stocks and mutual funds, not in a physical location.
  • Possible Storage Fees: You might pay a small fee for storage and other maintenance fees and have insurance coverage on your gold. Many gold IRA vendors also charge a premium for this service. Comparing these fees and deciding which fits your investment needs best is best.
  • Certainty: It would be more specific if you had the money to invest in physical gold immediately. People who do not have that kind of money might be apprehensive about investing in something that isn't as physically solid as gold bullion coins or bars.

Pros and Cons of Holding Physical Gold


  • Storage: If you have physical gold in your possession, it's not vulnerable to storage fees or potential theft.
  • Certainty: There is no way that the value of your gold can change, and you will always have the same amount in your possession. It won't ever be taxed if you are careful only to buy the coins or bars when they are sold at "market rates."


  • Storage Fees: You have to ensure the precious metal, and it might be necessary to pay a storage fee. You might also have to pay a small price to the person storing the gold. These costs can add up, but they are still cheaper than having a traditional IRA or 401k.
  • Custody Concerns: There is always a chance of losing your gold if you don't store it in a secure location like Brinks or another IRA custodian. Without your physical possession of the gold, you can't sell it or be sure it is still there.
  • Tax Advantages: You will pay a lower tax rate on the money you contribute to a gold IRA than if you were to buy gold bullion coins to hold onto it. If you are planning only to purchase physical gold, that is the best option.

How to Hold Physical Gold in an IRA

Having physical gold in an IRA can be a solid decision, but there are still some things that you need to consider.

Any limitations on how I can hold physical gold?

You should be able to hold as much gold as you want in an IRA. If a gold IRA has a limited amount of physical gold, you aren't able to invest enough to take advantage of its benefits.

The benefits of owning physical gold in an IRA account

The flexibility is probably the most significant benefit of holding physical gold in an IRA. You can sell it anytime, and the value will not fluctuate dramatically as long as you are smart about where to buy it. You also get to avoid paying capital gains taxes and penalties throughout the life of your investment. Gold IRAs have been popular for a long time because they offer considerable flexibility and benefits to investors.

Finding a Broker or Custodian to Fund a Gold IRA Account

If you are setting up a gold IRA, you don't need to look for the most traditional options. You can use a broker or custodian and invest in physical gold without problems arising from investing in other types of gold IRA investments. It is not liquid doesn't make it any less useful for your retirement. There are many different ways to invest in physical gold without moving it from one place to another.

Where can I open a Gold IRA account?

Many companies will allow you to open a gold IRA account. There is no right or wrong choice when choosing the right provider for your gold investments. Before making your investment, you should consider which company has the best interest rate, fees, and customer service. The same is true for physical gold you consider buying to invest in your retirement fund.


The Bottom Line

You shouldn't be afraid to invest in physical gold if you have the money to do so. If you cannot buy the coins or bars personally, it might be better to go with a gold IRA or other investment option that provides more flexibility. Not every investment type is equal, but physical gold is still valuable no matter how it is held or where it is stored.

About the Author

Since 2008, Savary Gold has been one of the world's leading mining exploration & investment resources for gold and precious metals.'s mission is to provide proven insider knowledge resources about retirement investing to its readers to make informed investment decisions and better manage risk.

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