When people think of IRA, one thing that is bound to come to mind is “precious metals”. Right from time, investing in precious metals has always been seen as a reasonable investment plan. If you have concluded that this is the right step in ensuring that you enjoy retirement, then other things quickly come to mind. Like which of these precious metals should you put your money into.

Gold is most likely to top every other option because why not, it is gold. But is this a smart choice? Is having a golden egg nest the best decision for you? Well, several factors will determine the answer to that. Therefore, in this article, we will discuss some important things that will help you decide if this is the right path to follow or not.

The Fast Growing Trend of Gold IRA

Gold IRAs became a lot more popular after 2008’s financial crisis that caused the Great Recession. You can read this to learn more about the 2008 financial crisis. However, before then, many people were not interested in this retirement plan as the process involved was considered rather tedious. One must first find a custodian or trustee, and a depository. Afterward, the investor will have to purchase the approved precious metal then transfer it to the approved depository such that the trustee can account for the transaction.

Due to this, only truly persistent investors were interested in pursuing this retirement plan. But since 2008, it appears that people do no longer care for this as more and more people want to diversify their retirement portfolio. The price of gold typically does not move in the same direction that paper assets do. When paper assets drop, the price of gold is sure to increase. Therefore, this plan is a wonderful idea for anyone that wants a hedge over inflation.

Gold’s Ever Shifting Price

Another major factor to consider is the ever-shifting price of this precious metal. Gold’s price has been as low as 255 dollars as of 1999, and as high as 1,937 dollars as of 2020. In March 2021, an ounce of gold went for roughly 1,737 dollars.

This precious metal often experiences massive growth, but major growth decline at the same time. Imagine the loss people who invested in August 2020 had to face barely 7 months after their investment. However, since the price is ever fluctuating, you can be sure to eventually get your profit.

Special Expenses

To own gold Individual Retirement Account, you will have to make some special costs. Some of the fees that you will face as an investor include:

1. Seller’s Fee

Seller’s fee is otherwise known as markups. These are often based on the form the investor wants their gold, such as coins, proofs, or bullion.

Markup may also vary based on vendors. However, it is usually paid just once. You can visit https://economictimes.indiatimes.com/definition/mark-up to read up more about markup.

2. Custodian Fees

Custodian annual costs are normal with every IRAs. However, with a precious metal IRA, these annual costs could be higher. This is especially true when you are using a financial institution that is different from the one where you have your other accounts.

3. Account Setup

An account setup fee is usually paid just once and it is used to set up your precious metal IRA account. The amount required for this is usually based on the financial institution. However, the setup fee for precious metal IRA accounts may be higher than the setup fee for other account types. This is because not all institutions deal with this type of IRAs.

4. Cash-out Expenses

By the time you want to close out your investment, you will have to face some other expenses. This is because, to cash out, you may have to sell your precious metal to a 3rd party dealer. Because the dealer has to make their profit, they may want to buy your gold for a price cheaper than that of the market.

So, if the price of gold hadn’t significantly increased since the time you invested, then chances are you may lose a great deal of your capital.

Another way to close the account will be selling the precious metal back to the IRA Company. However, not all companies offer this service. Even if you are lucky to find one that does, you may still run at a loss from closing your account. This is a downside that does not occur when you open and close a regular IRA account.

5. Storage Fees

Precious metals have to be kept in special storage facilities that are qualified to hold them. These facilities usually have specific storage fees that you as the investor will have to pay for.

Checkbook IRAs

This is a way through which an investor can open an account without needing a custodian or the costs that are associated with having one. Checkbook IRAs are self-directed; therefore, it does not need custodian management. To have your gold metals resource in this account is quite complicated as to own one of these accounts, the investor must be an LLC.

There are also other requirements for owning this account that make it quite unachievable for the average investor.


There are some important factors to consider before you open a gold IRA. In this article, we have discussed some of these important factors to ensure that whatever decision you make is an informed one. If you have further questions and comments, please, do not hesitate to let us know.