Deciding whether a gold IRA is a smart choice for your retirement as a senior depends on your financial goals and risk tolerance. Keep reading because we’ll guide you through the benefits and potential drawbacks, helping you determine whether adding physical gold to your IRA aligns with your retirement strategy.
We’ll break down everything you need to know, offering clear, expert advice to help you make an informed decision.
Table of ContentsSkip to Section
- What is a gold IRA?
- How does a gold IRA for seniors work?
- Is a gold IRA a good investment for seniors?
- Are there other ways to invest in gold as a senior?
- Where can seniors open a gold IRA account?
- Make sure to look out for gold IRA scams
What is a gold IRA?
A gold IRA is a type of self-directed individual retirement account that holds gold, silver, and other precious metals. You can also purchase tangible investments with a gold IRA, including real estate and art.
You can fund your account by rolling over or transferring funds from a retirement account or via cash or wire transfer. As long as funds are transferred or rolled over properly into your gold IRA, you won’t pay taxes on them.
You then work with an account custodian—a company or bank approved by the IRS to manage these accounts and handle all the paperwork—to purchase precious metals with the funds.
Only coins, bars, and bullion that meet the IRS’s standards for quality can be purchased for a gold IRA. Your metals dealer should be able to point you to IRA-qualified metals. Once purchased, the metals in our gold IRA are stored in an IRS-approved depository.
Our expert’s take
Crystal Rau
CFP®
Gold IRAs can be fee-heavy and less liquid than you might hope. And taking required minimum distributions can be a headache if your assets are all tied up in a gold IRA. If you’re considering investing in gold, I recommend limiting it to 10% or less of your total investments. Keeping gold outside of an IRA can provide more liquidity and fewer fees.
Read More
How to hold physical gold in an IRA
How does a gold IRA for seniors work?
Gold IRAs work for seniors much like younger investors, but here are the most important points.
Gold IRA contribution rules for seniors
Once you reach age 50, you can contribute $1,000 more to a gold IRA each year than those under the age of 50. Contributing beyond these limits, however, results in a 6% penalty on the excess contributions.
| Age | Annual contribution limit |
| 49 and younger | $6,500 |
| 50+ | $7,500 |
Before 2020, individuals older than 70½ couldn’t contribute to a gold IRA, but that rule has since been phased out. As long as you turned 70½ in 2020 or later, you can continue your contributions as long as you like, making it a smart place to grow and safeguard your money.
Gold IRA distribution rules for seniors
When it comes to withdrawing your funds, gold IRAs work like traditional IRAs. You can start taking distributions from the account when you reach 59½ years of age. If you try to withdraw before this point, you’ll owe a 10% penalty on the distribution amount.
You aren’t required to take distributions beginning at 59½ years. You can continue to let your metals grow in value. Once you reach 72 years of age, IRS rules mandate that you must take your required minimum distributions (RMDs).
You can take RMDs in cash or “in-kind” distributions, meaning the physical precious metals in your gold IRA are sent to you.
You can learn more in our guide to gold IRA rules and regulations.
Is a gold IRA a good investment for seniors?
As you age, safer, more stable investments are often the best place to store your money. Although your earnings on those investments may be less, this approach lowers the risk to your retirement plans.
Here are the risks and benefits.
Pros
Steadily rising prices
Gold and other precious metals can be a solid vehicle for slow and steady growth.
Less market volatility
Gold IRAs can be more protected from market swings than investing in the stock market.
Portfolio diversification
By investing in a gold IRA, you can spread out your money. A stock market turn or drop in savings rates is less likely to have a negative impact on precious metals.
Hedge against inflation
Gold retains value over time, providing protection against inflation compared to other investments.
Cons
Gold IRAs are lower yield
Gold IRAs can offer a lower-risk method for steady fund growth, but you might see lower returns than other investment vehicles. Investing $1,000 in the stock market, for example, may net you much more cash than that same amount in gold bullion.
Fees
Most gold IRAs come with fees, which vary by custodian and depository. You might pay account setup fees, storage fees, annual management fees, and even extra fees and taxes when buying your coins and bullion.
A high-level look at how the pros and cons of gold IRAs compare to other similar investments can help seniors make a decision about where to invest their funds in retirement.
| Investment | Pros | Cons |
| Gold IRA | Rising prices for gold and silver | Account fees, lower-yield returns |
| Real estate | Potential for rental income, long-term appreciation, tax deductions | High initial investment, property management may be required |
| Bonds | Low market fluctuation | Longer maturity rates, low-yield returns |
Everyone’s retirement plans and financial pictures differ, so consider speaking to a financial professional for the most personalized investment advice.
Our expert’s take
Crystal Rau
CFP®
In most cases, if you’re living off your investment accounts in retirement, we’ll want 35% to 60% of your portfolio in more conservative investments and 40% to 65% in equities, so the account will continue growing. It depends on your circ*mstances, including whether you have other income sources, such as Social Security and pensions.
Are there other ways to invest in gold as a senior?
If you choose to invest in gold, an IRA isn’t your only option. Seniors might also consider one of the other methods below:
Buy gold and storing it at home
You can, of course, buy gold bars and other metals and store them at home in a safe or safe-deposit box. If you go this route, make sure you insure your purchases.
This approach can be a suitable investment method if you want something easy, hassle-free, and tangible. You can easily pass down physical gold investments, and the fees and storage costs that come with a gold IRA don’t apply to these purchases.
Invest in gold funds and ETFs
Many mutual and exchange-traded funds focus on gold and precious metals, offering a break from IRA-related fees and costs.
Some of these invest in actual metals and bullion, while others buy stock in companies involved in the gold mining or refining processes. (You can also invest in these stocks directly.)
The former is a higher-risk endeavor, depending on how each company performs over time and various environmental factors, but higher risk may lead to higher rewards.
Buying gold futures
Gold futures allow you to buy gold for a set price later. These require speculating the future price of these metals and are best left to seasoned investors. You’ll also want to be comfortable with higher risk if you go this route.
Most experts don’t recommend riskier investments, including futures, as you get older and closer to retirement.
What is the best gold IRA for seniors?
If you’re a senior looking to open a new gold IRA account, comparing your options is important. Our team has evaluated gold companies to find the best gold IRAs.
The best IRA for you will depend on your goals, so make sure to compare your options and speak to an advisor before making a decision.
Our expert’s advice
Crystal Rau
CFP®
Gold can be a terrific way to hedge against inflation, but so can stocks. Keeping your gold exposure to 10% or less can provide safety in a portfolio without sacrificing returns. It’s important to have exposure to other parts of the market to ensure the portfolio will continue to grow along with having a portion in safer investments.
Look out for gold IRA scams
If you opt to open a gold IRA account, watch out for scams as you go through the process. Scams can be common in this industry, and they could put your money—and entire retirement—at risk.
Here are the most common signs of a scam you should watch for:
- Mentions of rare or collectible coins; these are unlikely to meet IRS approval
- Fake IRAs, where the company takes your funds and uses them to make purchases rather than putting them in an IRA account
- Misleading contracts, which often contain myriad fees and limitations
- “Store at home” IRAs, which tout storing your IRA-purchased gold at home rather than in an approved depository
Other scams exist, so be mindful and ask questions if something looks suspicious. To compare several options, check out our guide to finding the best gold IRA company.
Consulting with a financial advisor is wise to ensure you’re working with a reputable company and making the right moves for your finances and long-term retirement goals.
