Entrust New Direction Blog

The modern day gold rush is ON! Commercials, neighbors and famous financial advisors tell you to buy gold. Especially in the past six months, many clients and prospective clients have asked us if they can use their retirement funds to buy gold and other metals. The answer is YES, if you have a self-directed retirement plan, your IRA may invest in precious metals. Part 1 and Part 2 of "How to Buy Gold and Other Precious Metals in your (Self-Directed) IRA" will help you answer the next question- what kind of gold and what other metals?

With so many coins and metal choices on the market, making a decision can be confusing. Following is a simple step-by-step way to determine if the metal of your choice is acceptable for an IRA investment. Note that whatever your choice, the IRS will not allow you to hold the metal personally. The IRA custodian or depository will hold the metals for your IRA.

Let's get the basics out of the way first. Your self-directed IRA can only invest in Gold, Silver, Platinum and Palladium. Note that the key word here is invest. Your IRA cannot buy collectibles - your IRA is only investing in the metal itself, not rare or attractive coins. The metal must be in a certain form (usually coins or bars) and/or of a certain purity. The purity or fineness of the metal is how the quality of the metal will be measured for your IRA.

When most of us hear about gold investment we picture the 400 ounce gold bars we have seen in movies. Extremely heavy (25 pounds), those bars are also very expensive items, particularly with the recent price increases in gold. IRAs are often priced out of the gold bar market, but, fortunately, other options exist. One option is smaller units of bullion, provided they meet the fineness, or purity level, requirement. Another option is coins.

We will provide more detail on specific coins in Part II.