Gold IRA vs. Direct Delivery: Your Ultimate Guide

When saving for your retirement, why rely on traditional savings accounts? You could use precious metals to ensure a financially-free future. For this, you have two options: gold IRAs and direct delivery. But which one is better? Find out in this ultimate guide.

gold delivery

What is Gold IRA?

IRA stands for Individual Retirement Account, meaning that it’s a tax-free savings account that you can gain access to once you retire from your job. In most instances, this savings account is filled with traditional finances; i.e. money that isn’t linked to gold. A gold IRA is the same concept but the savings account is instead a home for precious metals.

Coins and bars made from gold and other precious metals take the place of traditional money. As they increase in value over time, your IRA does so as well. These metals are stored in a depository until you’re ready to retire and cash them in for their monetary value.

Pros of Gold IRA

For many savvy investors, gold IRAs feel like the obvious choice. You don’t have to handle the gold bars yourself, meaning that their safe storage will be dealt with on your behalf by the gold IRA custodian. This makes it a secure and hassle-free option.

In the case of gold IRAs, funds are taken directly from your retirement savings account. Therefore, you don’t have to find the cash to purchase them directly. It’s a simple process of converting your already existing retirement fund into a gold IRA. Because you don’t have possession of the precious metals, you’ll also be incentivized to hold onto them for longer, earning you more overall.

Cons of Gold IRA

That being said, it’s important to note that there are several downsides to keeping your retirement savings in the form of a gold IRA. First of all, it can be a more expensive option. Because you’re not in possession of the precious metals, you may have to pay extra for the storage and maintenance of the coins and bars.

Furthermore, gold IRAs tend to have a more limited selection of products. They have to meet IRS requirements, meaning that you don’t have complete control over which metals you invest in. Of course, the way in which you store the metals is also limited.

What is Direct Delivery?

Direct delivery is similar to a gold IRA in that it uses precious metals as a way of increasing your wealth. However, these metals aren’t kept in an IRS depository. Instead, you purchase them using cash. Then, they will be shipped to you directly.

You then have access to the gold bars and coins. That means you’re able to store them as you wish, whether that’s at home in a safe or in a private depository. Like a gold IRA, you can sell these precious metals once they’ve gained value and use it to fund your retirement.

Pros of Direct Delivery

Instead, therefore, you may be considering the direct delivery option. It certainly gives you more choice, allowing you to choose any precious metal you like. You’re also able to store it in a location of your choice, whether that’s at home or in a depository. Storing at home is a popular option because you save on storage and maintenance fees.

This process makes it much easier to buy and sell metals as you see fit. If you want to cash in early, you can. Also, the metals can be bought with cash, meaning that this option is open to you even if you don’t have a large retirement fund.

Cons of Direct Delivery

While the benefits of direct delivery are clear, it’s important to note the drawbacks. Although it may be a cheaper option overall, it does require a large upfront cash investment. If you don’t have this money, then this may not be a viable option.

Furthermore, you have to take responsibility for the storage of the metals. This makes it a more stressful and risky venture. Your home might not be a safe place for gold bars. Plus, it can be too tempting to simply sell them when you need a bit of cash, which disincentivizes long-term investment.

Both gold IRAs and direct delivery come with pros and cons. Choose the option that best fits your personal situation. Now that you know what each option entails, you can make a fully-informed decision about your financial future.