Everything you Need to Know about Gold IRA Home Storage

When it comes to financial vehicles to help fund retirement, few pose the unique combination of being reliable and controversial than gold IRA home storage.

This statement requires a bit of explanation, of course. These kinds of IRAs are reliable because they’re based on gold, which always takes on a higher financial profile during periods of market uncertainty and instability.

The controversial part is more intriguing. It’s the “home storage” part of these IRAs that’s both controversial and slightly misleading. That’s because there’s an extensive network of safeguard procedures you need to know about, so if you want to invest in a gold storage IRA, you’ll have to jump through some regulatory hoops.

gold IRA home storage

The Rules and Limitations of a home storage gold IRA

Not surprisingly, it’s the IRS that’s generating many of the rules of the road when it comes to a gold IRA home storage. Some of these rules are hard and fast, while others fall into the category of strong recommendations, and given the power the IRS has it’s generally considered a good idea to take them seriously.

The umbrella rule is that you can only invest in IRS-approved gold, and beyond that the recommendation the IRS goes by is that the gold must be “highly-refined bullion.”

From there the restrictions get more severe. The company selling the gold must be nationally accredited (i.e., no fly-by-nighters allowed), and the gold must be complete and intact in its original packaging. There’s also a certificate of authenticity that goes with all this, and there are further restrictions depending on whether you’re purchasing gold coins or gold bars.

These recommendations are analogous to those of other gold-based IRAs. The coins must be uncirculated and undamaged, and the gold bars must be manufactured to meet a defined weight specification.

The catch-22 in all this is that even though you own the gold, you can’t keep it in your own house in your basement or under a mattress, or anywhere else in your home, for that matter. It has to be stored offsite in a depository that’s approved by the IRS, so home storage is really a misnomer of sorts.

The Benefits of Owning a Gold Storage IRA

Given that the gold is stored in a place where the IRS has primary access, it makes sense to ask the question of exactly what the benefits are to doing something like this.

In many ways, they’re similar to the general laundry list of benefits that can be realized from most other types of gold IRAs.

Owning physical gold can be a solid way of reducing the overall risk level of a portfolio, so in that context they’re a good way to achieve diversification.

They also provide some protection from downturns in a volatile economy, e.g., when the stock market takes a sudden dive for a brief period.

Similarly, they can be used as an inflation hedge, a tactic that’s become especially popular in the last 6-12 months.

Finally, as part of a long-term investment strategy, gold storage IRAs can be a great way to increase overall wealth. Gold prices have climbed over the last decade, and gold tends to do especially well as an investment vehicle during volatile economic times, which certainly describes the last couple of years given the effects of the pandemic.

Funding and Getting Started

The first step in starting a gold storage IRA is to choose a custodian. In this scenario, the custodian is actually a company that manages gold IRA accounts, and they take care of the necessary IRS reporting.

The most obvious type of funding is cash. This is usually done by writing a check or sending a wire payment to the custodian, and it’s by far the simplest way to go.

You can also do a gold IRA rollover, i.e., you can withdraw funds from your existing retirement account and deposit them into your new gold IRA. There’s a 60-day period during which you can do this, and it’s important to check out some of the rules and guidelines for doing this to avoid getting in dutch with the IRS.

The final method is a transfer. This should be done by whoever is administrating your current retirement account so that the funds go to your new custodian, and once again it’s a good idea to check the rules on how to do this.

Finally, there are limits that correspond to the general rules of the road for standard IRAs, i.e., you can only deposit amounts up to $6K in this kind of gold IRA, and the amount goes up to $7K if you happen to be over 50, which is the case for most gold IRA owners these days.