IRA Eligible Gold Coins
Investing in precious metals through an Individual Retirement Account (IRA) can be an effective way to diversify your retirement portfolio. However, not all gold coins qualify for inclusion in an IRA. Understanding which gold coins are eligible and how to properly invest in them is essential for investors looking to add physical gold to their retirement strategy.
What Makes a Gold Coin IRA Eligible?
The Internal Revenue Service (IRS) has specific requirements for gold coins to be eligible for inclusion in an Individual Retirement Account (IRA). Understanding these requirements is crucial for investors looking to diversify their retirement portfolios with precious metals.
IRS Purity Requirements
For gold coins to be IRA-eligible, they must meet a minimum fineness requirement of 0.995 (99.5% pure). This high purity standard ensures that the investment maintains its value and quality over time. There is, however, one notable exception to this rule - the American Gold Eagle coin.
IRA-Eligible Gold Coins
Several gold coins meet the IRS requirements for inclusion in a self-directed IRA:
- American Gold Eagle - These are among the most popular and best-selling bullion coins in the United States. With a fineness of .9167, Gold American Eagle Coins are the only gold coins that are an exception to the purity rule set forth by the Internal Revenue Code. They're available in 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz denominations.
- American Gold Buffalo - Though not the official gold bullion coin of the US, the Gold Buffalo stands out as the first-ever 24-karat gold coin struck by the United States Mint. The American Gold Buffalo has been available since 2006.
- Canadian Gold Maple Leaf - The Gold Maple Leaf issued by the Royal Canadian Mint was the world's second-ever gold bullion coin in the modern age, debuting from the mint in 1979. In 1982, it became the first gold bullion coin issued with .9999 pure gold content.
- Australian Kangaroo/Nugget - These coins from the Perth Mint meet the required purity standards and are accepted for IRAs.
- Austrian Philharmonic - The Austrian Gold Philharmonic coin led worldwide gold coin sales in 1992 and meets IRA eligibility requirements.
- Chinese Gold Panda - The third-ever gold coin of the modern age, the Chinese Gold Panda debuted first in 1981 and is made available each year with a new design of the Panda on one side.
Gold Coins That Are Not IRA-Eligible
Some coins may meet IRS purity standards but be ineligible for an IRA because they are considered collectibles. These include popular bullion coins such as United Kingdom Sovereign coins, French 20 Franc gold coins, and U.S. Liberty coins. The IRS generally excludes numismatic and collectible coins from IRAs.
Gold Proof Coins
For proof coins, the only collectible or numismatic gold coin that can be included in an IRA is the proof version of the American Gold Eagle, and it must be contained within its original packaging with its certificate of authenticity from the U.S. Mint.
Storage Requirements
The IRS does not allow IRA account holders to store their own gold. Doing so could jeopardize the tax benefits that come with a gold IRA. Instead, IRA-eligible gold must be stored in an IRS-approved depository that specializes in protecting precious metals.
IRA-Eligible Gold Bars
In addition to coins, gold bars that meet specific requirements are also eligible for inclusion in an IRA:
Approved gold investments must fall under a pre-approved list, be pure 24-karat gold bullion bars (1 oz – 400 oz.), and secure an appropriate hallmark from a qualified refiner or assayer. For gold bars, as long as the bar comes from an accredited refinery and is at least .995 fine (99.5% pure) gold, it qualifies for inclusion in a self-directed IRA.
Popular IRA-eligible gold bars include:
- Perth Mint Gold Bars - Available from the state-owned mint of Western Australia, Perth Mint Gold Bars are available in weights from 1 Gram up to 10 oz or more. The bars have .9999 pure gold content and feature the Swan logo of the Perth Mint.
- PAMP Suisse Gold Bars - These are highly respected and meet all IRA requirements.
- Credit Suisse Gold Bars - These meet the fineness requirements and come from a reputable refiner.
Setting Up a Gold IRA
If you are buying gold to invest in an IRA, you'll need to take the following steps: Open a self-directed IRA, fund the IRA and select IRA-eligible gold products for investment, then have the gold stored in an approved depository.
You cannot add gold you already own to a self-directed IRA, even if it meets all the requirements set forth by the Internal Revenue Code. Instead, you must add funds to your IRA, then have your IRA custodian use those funds to buy gold through a distributor.
Benefits of a Gold IRA
One of the primary benefits of a Precious Metals IRA is diversification. Holding precious metals in a portfolio can provide investors with a more balanced and diversified portfolio, thereby reducing the potential risk of losses. Gold IRAs can also serve as a hedge against inflation and economic uncertainty.
Conclusion
For investors looking to add physical gold to their retirement strategy through an IRA, it's essential to understand which coins and bars meet IRS requirements. Working with reputable dealers and custodians can help ensure compliance with all regulations while building a diversified retirement portfolio that includes precious metals. Before investing, it's advisable to consult with a financial advisor to determine if a gold IRA is suitable for your specific retirement goals.
