IRA Investing: Roth Gold IRA, Traditional Gold IRA, and SEP Gold IRAs

As you consider your retirement, one of the investment types you may have considered is that of an IRA, which is understandable. It’s always a good idea to have some kind of investment-based elements in your portfolio since even given the risk, the return potential is some of the best that you will see.

However, did you know that there are precious metals variations to these accounts? They are more popular than you may think. We have seen many people looking to establish IRAs backed by physical gold and other precious metals.

Below, we’ll talk a bit about them to help you understand your options and see if any of them fit well into your investment strategy.

Why Might You Consider a Traditional, SEP, or Roth Gold IRA?

One of the biggest things that attract people to an IRA is the tax advantages that they can get. If you use a gold IRA company to open a gold Roth IRA, for example, you will be able to take advantage of the same tax benefits of your standard Roth IRA account, but this time, the backing assets will be gold.

If you know anything about gold and silver investments, you know that precious metals have a way of retaining their value, even in the face of situations that see Fiat currencies losing value.

While we won’t tell you that going for a gold IRA will guarantee that you’ll be in a better position down the line, we wouldn’t advise you to undervalue the level of protection you could be assuring yourself by going this route.

Types of Precious Metals IRAs

Let us take a moment to cover the three types of gold IRAs available. Of course, each will have its own advantages and the requirements will also be unique.

Precious Metals IRAs

Gold Roth IRA

Gold Roth IRA guidelines stipulate that your income needs to be below a certain threshold. For individuals, this is $153,000 and for married couples who are filing jointly for the tax year 2023, the amount would become $228,000.

The money that you’ll contribute to the self-directed IRA is taxed, so the funding is essentially coming from after-tax dollars. Your contribution limit will be $6,500 or $7,500 depending on if you’ll be 50 or older in the 2023 tax year.

You are allowed to withdraw funds at any time from Roth gold IRAs and you are allowed to do so tax-free, which is one of the things that makes the account alluring. Of course, dealing with tax requirements upfront can also be a plus.

We usually recommend that those who expect a higher income at requirement opt for gold Roth IRAs.

Traditional Gold IRA

With a traditional gold IRA account, you don’t have an income ceiling to worry about. So long as there is an earned income to speak of, you can contribute.

This time around, the funding comes from pre-tax dollars, which means that you will not pay taxes at the time of contributions. However, these contributions are tax deductible and you will deal with taxation for any early withdrawal.

Additionally, you must begin to take distributions by the time you reach age 73 and there is nothing you can do to avoid this.

Should you expect your income at retirement time to be lower than your current income, we would advise opting for a traditional gold IRA, since you will not have to deal with taxation until retirement time, assuming that you did not take any early withdrawals.

SEP Gold IRA

This is what is called a Simplified Employee Pension gold IRA, which doesn’t fall under the umbrella of the typical individual options. Instead, the eligibility umbrella here extends to those who are either self-employed or small business owners.

For the tax year 2023, there is a contribution limit of $66,000 or 25% of self-employed compensation. The greater of the two is the ceiling.

While the requirements and applicable parties are different, a SEP gold IRA works functionally the same way as a traditional IRA.

Can You Buy Gold with Your IRA Account to Keep at Home?

Can you buy gold in your Roth IRA? Can you keep the gold from your traditional IRA at home? These are along the lines of common questions that we get. People want to know if gold can be a part of their IRAs and if they can house their gold themselves.

We’ve already answered the first one since that’s the whole point of these kinds of accounts, but what about the second question?

Our advice would be not to get your hopes up. You can’t house your gold at your home. The IRS requires any precious metals associated with an IRA to be kept at an approved depository.

There are several reasons why we can see such a requirement being imposed. One of these is security. The kinds of facilities that depositories have to protect your holdings will likely not be at your home.

Additionally, depositories typically offer an insurance component, which allows you at least some surety that in the unlikely event something happens that costs your precious metals to be lost, there is a method of recourse.

What Does the Process Look Like to Buy Gold in a Roth IRA or Traditional IRA?

If you choose to open an account with Goldco, Augusta Precious Metals, American Hartford Gold, or one of the other reputable gold IRA companies on the market, the steps are very straightforward.

Setup Your Account

Once you’ve chosen your precious metals IRA company, find out what you need to do to have your account set up and walk through the designated process.

Transferring Assets

Most commonly, you’ll be funding the IRA via a transfer or rollover process from your existing IRA. The gold IRA company will tell you what you need to do to have this done.

Purchase and Storage

With your account funded, your custodian will purchase the precious metals on your behalf and have them sent to the approved depository.

Wrapping Up

We covered three gold IRA types in the forms of the traditional, Roth, and SEP options. Pay attention to the eligibility requirements and ensure that you keep the advantages in mind as you choose too since the whole idea is to benefit from your decisions when retirement comes around.

Tim Schmidt

About 

Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.