Disclosure: We are reader-supported. If you buy through links on our site, we may earn a small commission. Learn more.

While all investment-grade gold coins make for popular tangible assets to hold, not all of them can be held in a self-directed IRA.

So if you're considering adding gold coins to your IRA, and wondering what gold coins can be held in an IRA, it's very important to understand which ones are eligible for inclusion.

This guide will explain which gold coins can be held in an IRA, how to add them to your account, what is the general eligibility criteria and so on.

We'll also explain all the benefits of holding gold coins in an IRA.

BEWARE OF GOLD IRA DEALER LIEs: Get The Guide

Which Gold Coins Can Be Held in the IRA?

The Internal Revenue Service (IRS) has specific criteria for which gold coins can be held in an IRA. In order to be eligible, gold coins must meet the following requirements:

gold coins

  • They must be at least 99.5% pure gold.
  • They must be produced by a national government mint
  • They must be in bullion form, with the exception of the American Eagle, and free from damage
  • They must be held by an IRA custodian in a secure depository

There are a few exceptions to these rules. 

For example, American Eagle gold coins are only 91.67% pure, but they are still eligible for IRAs. Additionally, proof coins (which are coins that have been specially minted and certified) besides the Eagle are not eligible for IRAs.

What is an IRA?

An Individual Retirement Account (IRA) is a tax-privileged savings account designed to help people save for retirement. There are many types of IRAs, including traditional IRAs, Roth IRAs, Gold IRAs and even gold SEP IRAs (just to name a few).

ira

Traditional IRAs allow you to contribute pre-tax dollars, which can lower your taxable income in a given year. Your contributions and any investment earnings grow tax-free until you withdraw them in retirement. At that point, you'll pay taxes on the money you withdraw.

Roth IRAs work oppositely. You contribute after-tax dollars to your account, which means you don't get a tax break when you contribute. However, your investments grow tax-free, and you can withdraw your money tax-free in retirement.

These two are the ones you'll generally be choosing between when opening a precious metals IRA.

Types of Gold Coins That Can Be Held in an IRA

The following types of gold coins are generally allowed to be held in an IRA:

  • American Gold Eagle: A coin made by the United States Mint that comes in four different sizes- 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz. These coins have a purity level of at least 91.67% gold which makes them both sturdy and pure.
  • Canadian Gold Maple Leafs: Coins produced by the Royal Canadian Mint. They are available in four different weights, 1 oz, 1/2 oz, 1 oz, and 1/10 oz. These coins are made up of 99.99% pure gold which makes them one of the purest coins in the market.
  • Australian Gold Kangaroos: Coins produced by the Perth Mint in Australia that come in many different sizes, namely 1 oz and 1/2 oz. The coins are made with a purity content of at least .9999.
  • Austrian Gold Philharmonics: Coins issued by the Austrian Mint that can be found in four different weight options: 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. These coins are likewise made of 99.99% gold.
  • Chinese Gold Pandas: These coins are produced by the People's Bank of China and are available in 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz weights, and are made of gold that is at least 99.99% pure.

types of gold coins

It's important to note that while these are the most common types of gold coins allowed to be held in an IRA, the IRS may consider other types of coins on a case-by-case basis. Suppose you want to add a different type of gold coin to your IRA. In that case, it's a good idea to consult a financial professional or the IRS to determine its eligibility.

How to add gold coins to your IRA

If you want to add gold coins to your IRA, there are a few steps you'll need to follow:

  1. Choose a gold dealer: The first step is to find a reputable gold dealer authorized to sell gold coins for inclusion in an IRA. You'll want to research different companies and compare prices to find the best deal. Check the dealer's reputation and ask for references before making a purchase. It's also a good idea to compare prices from multiple dealers to ensure you're getting the best deal.
  2. Open a self-directed IRA: Financial institutions, such as banks or brokerage firms, typically manage traditional IRAs and Roth IRAs. However, if you want to hold gold coins in your IRA, you'll need to open a self-directed IRA. This type of IRA gives you more control over your investments and allows you to hold a wider range of assets, including gold coins.
  3. Transfer or rollover funds: Once a self-directed IRA is set up, you'll need to transfer or rollover funds from your current IRA or 401(k) into the new gold IRA account. This process is called a "rollover." You can do a rollover by transferring the funds directly from your current account to the self-directed IRA or by taking a distribution from your current account and depositing it into the self-directed IRA within 60 days. It's important to note that there are limits on how often you can do a rollover, so consult with a financial advisor or tax professional before proceeding.
  4. Purchase the gold coins: Once your self-directed IRA is funded, you can purchase the gold coins you want to add to your account. You'll need to pay for the coins with funds from your IRA, and the purchase must be made through the IRA custodian.
  5. Store the coins: The IRS requires that you store your gold coins in a depository that the agency approves. This is to ensure the safety and security of your investment. The depository will hold the coins on your behalf and charge a fee for their services. Some commonly approved gold IRA companies and depositories include Brink's and Delaware Depository.
  6. Report your purchases: You'll need to report any gold coin purchases to your IRA custodian. They will keep track of the coins and their value for tax purposes. This is usually handled by the gold IRA company you're working with.

Considerations for Holding Gold Coins in an IRA

While gold coins can be a valuable addition to an IRA, there are a few considerations to keep in mind:

  • Cost: Gold coins can be expensive, especially if you purchase larger quantities. It's important to carefully consider the cost of the coins and how they fit into your overall investment strategy.
  • Storage: Gold coins must be stored securely to protect them from theft or damage. Your custodian will handle the storage of your coins, but you may be responsible for any associated fees.
  • Taxes: When you sell gold coins from your IRA, you will be subject to taxes on any profits you make. This is in addition to the taxes you will pay on your overall IRA distribution when you begin withdrawing in retirement.

Benefits of Holding Gold Coins in an IRA

what gold coins can be held in an IRA

There are several benefits to holding gold coins in an IRA. Here are a few:

  • Diversification: Gold is a unique asset class that doesn't move in the same direction as stocks, bonds, or other financial instruments. Including gold in your IRA can diversify your portfolio and potentially reduce your overall risk.
  • Hedge against inflation: Gold has a long history of maintaining its value over time, even during economic instability or inflation. By holding gold in your IRA, you can help protect your retirement savings from the effects of inflation.
  • Tax benefits: Depending on your IRA type, you may enjoy tax benefits on your gold coin investments. Traditional IRAs allow you to contribute pre-tax dollars, which can lower your taxable income in the current year. Roth IRAs allow you to withdraw your money tax-free in retirement.
  • Portfolio stability: Gold has a low correlation with other asset classes, which means it tends to move independently of stocks, bonds, and other financial instruments. This can provide a stabilizing effect on your portfolio, especially during times of market volatility.
  • Liquidity: Gold coins are highly liquid assets that can be easily bought and sold. This can be a useful feature if you need to access your funds in a pinch.
  • Potential for appreciation: While there are no guarantees in the investing world, gold has a long history of appreciating over time. This can be a potential source of long-term growth for your portfolio.

Risks of Holding Gold Coins in an IRA

While holding gold coins in an IRA can offer some benefits, it's also important to be aware of the potential risks. Here are a few things to consider:

  • Market risk: Like any investment, gold is subject to market fluctuations. The value of your gold coins may rise or fall depending on various factors, including economic conditions, political events, and supply and demand.
  • Storage risk: If you opt to store your IRA-eligible gold coins in a depository, you'll rely on that facility to keep your coins safe. Some worry that there is a risk that the depository could be robbed or otherwise compromised, but in reality, these vaults are both highly secure and insured.
  • Cost risk: Gold bars and coins come with various costs, including the purchase price, storage fees, and the spread between the buy and sell price of gold. These costs can eat into your investment returns and reduce your overall profit.

It's also worth noting that gold coins are just one option for investing in gold through an IRA. Another option is gold bullion, which refers to gold in the form of bars or ingots. Gold bullion is also subject to the same eligibility requirements as gold coins, as it must be 99.5% pure and stored in an approved depository.

One advantage of gold bullion is that it's typically less expensive than gold coins, and more correlated to gold spot prices, since it doesn't have the added cost of being struck into coin form. However, gold bullion may not have the same potential for appreciation as gold coins since it doesn't have the same collector value.

Ultimately, whether or not it's a good idea to invest in a gold IRA depends on your financial goals and risk tolerance. It's a good idea to do your research and carefully consider the pros and cons of each option before making a decision. By understanding the eligibility requirements and risks involved, you can make an informed choice about whether gold is a good fit for your retirement savings plan.

Frequently Answered Questions

Which approved precious metals can be used in a self-directed IRA?

The Internal Revenue Service (IRS) approves certain precious metals for investment in a self-directed IRA.

The four physical precious metals allowed to be held are gold, silver, platinum, and palladium. The metals must meet certain requirements to be eligible for inclusion in a self-directed gold IRA. For example, gold must be at least 99.9% pure, while silver must be at least 99.9% pure.

Platinum and palladium both require a minimum 99.95% purity. The metals must also be in the form of coins, bars and rounds and must be stored in an approved depository.

Are precious metals IRAs safe?

Precious metals IRAs, also known as self-directed IRAs, can be a safe investment option for diversifying portfolios and hedging against economic uncertainty. However, like all investments, there are some risks to consider.

One is market risk, which refers to the potential for the value of precious physical metals to fluctuate due to economic conditions, political events, and other factors. Another risk is storage risk, which refers to the potential for the precious metals to be lost or damaged while in storage. To minimize this risk, choosing a reputable dealer and an approved depository with a track record of safeguarding investments is important.

It's also worth noting that self-directed IRAs are subject to the same tax rules and contribution limits as traditional and Roth IRAs. This means that you'll need to pay attention to income limits, contribution limits, and distribution rules when investing in a precious metals IRA.

Overall, approved precious metals IRAs can be a safe investment option for those willing to carefully consider the risks and understand the applicable rules and regulations.

About the author 

Sam Rexford

Get The Dungeon Newsletter & Join Our Community 

When you join our newsletter, you'll also get access to The Dungeon community where you can get support and find like minded entrepreneurs and hustlers just like you to network with.