Gold IRA vs. gold bars and coins: Which is better?

Long-term investors can potentially get a lot of value from incorporating gold into their investment portfolio. Not only is it a longstanding inflation hedge, but gold is a stable asset that tends to maintain value when markets are down, making it a good diversifier. 

But if you're going to invest in gold, you'll need to decide what type of gold investment to make. For those looking to invest directly in the precious metal, there are two common ways to do so: Using a gold IRA or simply buying gold bars or coins outright. 

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Gold IRA vs. gold bars and coins: Which is better?

Deciding between investing in a gold IRA or buying gold bars and coins can come down to your individual goals and financial plan. Here are a few details that can help you decide which option is better for you:

When to invest with a gold IRA

Gold IRAs may be ideal for gold investors focused on retirement. You can open this self-directed individual retirement account as a traditional, Roth, or SEP IRA — just like with a regular IRA. It also carries the same annual contribution limits, rules for distribution and tax advantages.

The difference, though, is that you can use this IRA to invest in gold (or other precious metals, like silver). There are some requirements to keep in mind. The gold you buy must be IRA-eligible, meaning it meets specific weight and purity standards determined by the IRS, and you'll need to work with an IRS-approved custodian to store your gold. 

If you want to take advantage of the benefits of an IRA while investing in gold, this can be a great option. But you should also consider the potential restrictions. It may not be the best choice, for instance, if you have a specific gold bar or coin in mind that isn't eligible. You should also make sure you know the full annual costs of storage and any other fees before you open your account. That will help you accurately calculate the value you're getting from your investment.

An easy way to get started with your gold IRA is by working with a gold investment company to buy your eligible gold and get set up with an approved custodian. Find out more about the process with a free investors kit today. 

When to invest in gold bars and coins

If you're looking for a more straightforward investment plan, buying gold bars and coins directly may be the right choice for you. 

To get started, make sure you find a reputable gold dealer or retailer. This may be online or a local seller in your area. You'll want to do your research beforehand to make sure you're investing in high quality gold and paying a good price. You can start by learning the current spot price of gold per ounce and determining what weight and purity specifications you're looking for. 

Buying gold bars and coins can have a lot of value for investors. You may enjoy the tangibility of your gold and keeping it easily accessible at any time. Gold in this form is also a liquid version of the precious metal — because gold has value across the globe, you can generally buy and sell it for a fair price at any time. 

One drawback to investing directly in gold bars and coins is the potential added costs. Not only will you pay a retail markup over the actual value of your gold, but you'll also need to factor in any transportation costs (especially for online purchases) and the price of insurance and storage. Storage, in particular, may only be a one-time purchase of an at-home safe, or could entail ongoing payments for a safe deposit box or other secure storage facility.

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The bottom line

Both a gold IRA and buying gold bars and coins directly can be worthwhile for gold investors today. You might choose a gold IRA if you'd benefit from retirement tax advantages and are already looking at gold bullion that meets IRS requirements. But if you'd prefer to store your gold yourself and you want the added liquidity, you may prefer buying gold bars and coins from a reputable seller. Before you decide, compare the costs of both of these gold investment types to see which may be the better value, based on how much you plan to buy and how you store it.

Before making any new gold investment, consider speaking with an expert like a trusted financial advisor to determine the best option for your overall investment plan. Get started now with a free information kit.