If you hold a gold IRA, the precious metal must be deposited with an IRS-approved custodian.

 If you attempt to take physical possession of the gold, that will count as a distribution and will be taxed accordingly.

The Bottom Line

Gold IRAs are normally defined as alternative investments, which means they are not traded on a public exchange and require special expertise to value. While gold has the potential for a high return, it’s easy to be blinded by its glitter. Gold prices can plummet unexpectedly. When gold is rising, you also have to decide whether you’d be buying at—or close to—the top of the market if you invest at that point.

If you’re considering a gold IRA, consult a financial advisor to determine how the metal would fit with the overall goals of your portfolio. In general, it’s never a good idea to put all of your eggs in one asset basket. If gold seems like a solid choice for you, Sentell suggests putting no more than one-third of your retirement funds into a gold IRA. Gottlieb recommends you have no more than “10% to 15% of a personal total portfolio invested in gold, whether in the paper form [which is not permitted in a gold IRA] or the physical holdings.

Withdrawing From A Gold IRA

The rules for withdrawing from a gold IRA are similar to those of other retirement accounts. Like other IRAs, a gold IRA is available as either a traditional or a Roth IRA.

For Traditional Gold Iras

• Contributions are made with pretax dollars.
• All distributions are taxed as ordinary income.
• Distributions before age 59½ face a 10% penalty.
• You must take RMDs after you reach age 73.768

For A Gold Roth IRA

• Contributions are made with after-tax dollars.
• There are no taxes due on withdrawals.
• Distributions before age 59½ face a 10% penalty.