Because there are several different gold IRA options available, investors need to understand how the investments work, as well as how they fit into their own personal strategies. Most gold IRA investing programs allow investors to choose from numerous gold investment funds including certificates of deposit (CD) funds and mutual funds that buy and sell gold as part of their investments. Investors may also opt for gold IRA plans that allow them to fund their gold accounts through a self-directed IRA, although this option does limit the amount of gold that any individual investor can buy or sell. In the event of a sell-off, however, investors would only pocket the difference between the price paid for gold during the selling transaction and the price it would fetch in the open market.

Different Gold IRA Options

There are many different kinds of IRAs. One type is the gold IRA. A gold-based IRA allows investors to both invest in gold itself and in other precious metals as well as getting the same tax benefits of an IRA. Like other traditional IRAs, a gold IRA could be a standard IRA where investors contribute pre-tax funds to investments that earn them a modest income, or a Roth IRA where they contribute funds to investments that earn them much greater income tax-free.

Another popular gold IRA investing option is to make use of what’s known as a gold “fund”. A gold “fund” is simply an account that invests in various gold assets. Funds are ideal for those who are new to gold IRA investing because they let investors begin with a relatively small amount of capital and allow them to grow their gold portfolio over time. Like other types of IRA investing, however, some gold “funds” will pay out more than their owners would on their own, such as when the value of the underlying asset increases for the investor. These types of funds generally pay a lower rate of return, but they tend to be less risky than the majority of other IRA investments.