Gold Roth IRA: What You Need To Know Before You Start Investing

How do you invest in gold with your Roth IRA?

Buying precious metals in an Individual Retirement Account (IRA) or 401(k) plan is a great way to add diversity to your portfolio and protect your wealth. But most people don't know about it. In fact, according to a recent survey conducted by BullionVault, over half of investors didn't even realize that they could buy physical gold and silver directly from a bullion dealer.

Physical delivery investing in gold is different from purchasing shares of gold companies because you're actually buying actual ounces of gold. Physical delivery investing in gold works like this: You send your money to a bullion dealer, such as BullionVault, and we give you a receipt for the amount of gold you've purchased. Then, you take possession of the gold in your name anywhere in the world.

There are many benefits of physical delivery investing in gold, including:

• Diversification - Owning physical gold helps reduce risk because you're spreading your investments across multiple asset classes.

• Protection - Gold is one of the best ways to preserve value over time.

• Liquidity - Because you own physical metal, you can sell it at any time without penalty.

• Portability - If you move, you can take your gold with you.

What exactly is a gold Roth IRA?

A Roth gold IRA is an alternative investment option that allows you to invest money into precious metals like gold and silver. You don't pay taxes on your gains until you take out the metal.

With a Roth gold IRA, you make annual contributions to the account based on your assets. There are limits to how much you can put in each year, but you can continue making contributions throughout retirement.

You'll want to consider whether it makes sense to use a Roth gold IRA, compared with investing in stocks or bonds. If you're looking for long-term growth potential, a stock or bond fund might be better suited for your needs. But if you're concerned about market volatility, a gold IRA could be a good fit.

Gold Roth IRA guidelines

The IRS says there are limits to how much money you can put into a Roth IRA. If you're over 50, you can contribute up to $6,500 per year ($7,000 if you're married filing jointly). And once you hit age 70.5, you can withdraw money tax free. But you'll still pay taxes on earnings.

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Contributions to a Roth IRA aren't deductible. So if you want to take advantage of the tax benefits, you'll have to wait until next year. And remember, you can't touch your Roth IRA unless you reach age 59.5.

If you do decide to tap into your Roth IRA, here are some things to keep in mind:

• Contributions are limited to no more than $6,500 per person, per year ($7,100 if you're married filing joint returns).

• Once you reach age 70.5, it's okay to pull out funds without paying taxes. But you'll owe income taxes on any earnings.

• Withdrawals are taxed as ordinary income.

• Your contribution room isn't affected by whether you use a traditional or Roth IRA.

Best Roth gold IRA companies

Roth IRAs are great because they allow you to contribute up to $5,500 per year ($6,500 if you're 50 or older), plus catch-up contributions every year. You don't pay tax on earnings, but you do pay income tax on withdrawals. Withdrawals over age 59½ are subject to a 10% penalty.

The most popular form of traditional IRAs is called a "traditional IRA," where you make pre-tax contributions into a retirement savings plan. These plans come with restrictions on how much you can contribute and what kinds of investments you can use. But there are no contribution limits for Roth IRAs.

Traditional vs. Roth IRAs

When it comes to choosing one versus the other, here are some things to consider:

• Taxation: When you withdraw money from a traditional IRA, you'll owe income tax on it. If you take money out of a Roth IRA, however, you won't owe anything.

• Investment options: A traditional IRA lets you invest in stocks, bonds, mutual funds, real estate, and other securities. In contrast, a Roth allows you to put money into just about any investment vehicle.

• Fees: While both traditional and Roth IRAs charge annual fees, the amount charged depends on the type of account. For example, a traditional IRA might cost 0.8%, while a Roth costs 0%.

Oxford Gold Group: Best overall

The Oxford Gold Group is one of the largest precious metals dealers in North America. They are known for offering competitive pricing and exceptional customer service. For over 30 years, they have been helping investors diversify into precious metals like gold, silver, platinum, palladium, and rhodium. Their products include bullion coins, bars, rounds, jewelry, and investment grade numismatic items.

They offer online shopping 24/7 365 days a year. You can shop for gold, silver, platinum and palladium here. They accept all major credit cards including Visa, MasterCard, American Express, Discover, Diners Club, JCB, and Union Pay.

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Their customer support team is available Monday – Friday 8am – 4pm EST via phone and email. If you have any questions about buying gold or silver, call them today at (877) 546-5223.

Goldco: Best for customer support

The best way to find out what it takes to become a Goldco client is to talk directly to us. We are happy to answer questions about our firm, our products, our services, and our culture. Our goal is to make sure you know exactly how we work and why we do things the way we do. If you want to learn more about us, please contact us today.

Patriot Gold Group: Best for keeping costs down.

The Patriot Gold Group offers three plans, one of which includes a free trial period. All three include unlimited calls, texts, data and international calling. You can choose whether you want to pay per month, per day, or per call. The monthly plan costs $10.99/month; the daily plan costs $4.99/day; and the per-call plan costs $0.40/minute.

You can sign up here.

Orion Metal Exchange: Ideal for accounts with a low balance

The metal exchange offers free checking, no monthly fees and low transaction costs. There are no hidden fees and there is no minimum deposit amount. You can choose whether to use paper checks or electronic transfers. Withdrawals are processed within one business day. There are no ATM fees either.

You can set up automatic withdrawals, and the site provides 24/7 customer support via phone, email and live chat. If you want to transfer funds out of your account, it takes just three days.

There are no foreign currency conversion fees, and there are no overdraft charges. The exchange allows you to make deposits directly into your bank account, and there are no limits on how much money you can deposit.

Roth gold IRA vs. other account types

Traditional IRAs are great because you don't pay taxes on contributions during your working life. But once you retire, you'll want to make withdrawals from those accounts—and that could mean paying hefty taxes. A traditional IRA allows you to contribute up to $5,500 per year ($6,500 if you're 50 or older), plus another $1,000 catchup contribution for individuals age 50 or over. You can also put money into a Roth IRA, which lets you contribute aftertax dollars into an investment account. When you take distributions in retirement, there's no income tax due. And unlike a traditional IRA, you won't owe taxes on your earnings while you're still employed.

A SEP IRA works like a traditional IRA except it's designed specifically for self-employed people. You can set up a SEP IRA and contribute up to 25% of your net profit each year. If you work for yourself, you can deduct the amount you contributed to the SEP IRA from your taxable income. You can also open a SEP IRA for your spouse and/or dependents.

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Is it worthwhile to invest in a Roth gold IRA?

A Roth gold IRA is one of the best ways to build longterm wealth because it allows you to invest in precious metals without paying taxes. This article explains why a Roth gold IRA could help you retire early and how it works.

Frequently Asked Questions

Where Should I Store My Gold?

When you open an IRA, you can choose whether to invest in physical gold or silver. If you decide to go with gold, there are three ways to do it: buy actual gold bars, purchase gold coins, or invest in gold shares. Each option offers different benefits and drawbacks.

If you choose to invest in gold coins, you'll likely end up storing the precious metal in a safe deposit box at a bank. This method allows you to keep track of your holdings and protect them from theft. However, since you're not actually owning the gold itself, you won't benefit from price appreciation. You could lose money if the value of gold goes down.

Gold bars offer investors a way to own the physical metal without having to worry about keeping track of it. They come in many sizes, including one ounce, half-ounce, quarter-ounce, and even larger versions. But because gold bars aren't insured against theft or loss like coins, they require special handling and storage. And although you can sell your bar anytime, you won't see a gain if the price of gold rises.

How do I recharacterize a regular IRA contribution?

To recharacterize a regular individual retirement account (IRA) contribution, you must submit a request to your IRA custodian to change the designation of the account. This process typically involves transferring money from one IRA to another IRA held at the same financial institution. You cannot make a contribution to a different type of account (Roth or Traditional), even if it is held at the same financial institutions.

The IRA contribution is treated as having been made to the second IRA during the year. However, if you are required to file a federal income tax return for 2018, you cannot claim a deduction for the contribution because it was recharacterized. For example, if you had $1,500 contributed to a Traditional IRA and then transferred it into a Roth IRA within 60 days of making the contribution, you could still deduct up to $6,000 ($1,500 + $5,500 $6,000) for contributions to a traditional IRA. But if you did not include the contribution in your 2018 return, you cannot take a deduction for it.

If you are required to file Form 8606, Recharacterization of Certain Contributions, you must attach it to your 2018 tax return.