Gold Roth IRA: Is it A Good Idea?

Thang Truong
Thang Truong
Updated on:

A gold Roth IRA is just what is sounds like—you’re investing part of your retirement account in gold. You can also invest in platinum, silver, or palladium (palladium is a precious metal, often used in fuel cells). How you feel about a gold Roth IRA is greatly dependent on your stance on investing in precious metals. Is it a good idea? If you already have a Roth IRA, should you convert? We’ll try to answer your questions.

What is a Gold Roth IRA?

Unlike a traditional IRA, or even a Roth IRA that invests in stocks, bonds, and mutual funds, a gold IRA can invest in precious metals. But not ALL precious metals—you have to be careful because the IRS does not allow just anything. Gold, silver, platinum and palladium bars have to qualify and meet a certain purity standard to be allowed. Collectibles and jewelry are not allowed, whether they’re made from gold or not.

>>MORE: Roth IRA: Everything You Need To Know

>>MORE: Best 10 Firms to Open a Roth IRA Account

Why would I Want to Invest in Gold?

The financial world is divided on whether or not investing in gold is a good idea. Let’s look at the pros and cons.


  • Gold (and other precious metals) does tend to hold its value over the long-term
  • Gold can return huge gains
  • Gold can serve as a diversification hedge
  • You’ll need a specialized custodian—not every financial firm allows Gold Roth IRA’s
  • The price of gold will never reach $0

>>MORE: IUL vs. Roth IRA: Which One is Better for Retirement Savings?


  • Gold can also suffer huge losses
  • Gold does not produce dividends or generate any income
  • You’ll incur extra costs for buying, selling and storing gold
  • Gold is illiquid as an investment

>>MORE: How Much Savings is Required to Retire at Age 55?

Is Gold a Good Investment?

Gold can give you great returns, but the price of gold can also plummet. Over the past 40 years or so, gold has been at a high of $2,257.64 on January 1, 1980 and a low of $386.65 on March 1, 2000. So, yes, there has been huge price increases, but also huge losses.

Gold is seen as a bulwark in an uncertain financial future, and as such, Gold Roth IRA’s tend to play to people’s fears. Invest in something tangible, not stocks and bonds, which might disappear with the next economic downturn. There’s also something comforting about having a solid thing to show for your money, as opposed to digital assets that could disappear.

Just like the stock market, gold can be very volatile. You wouldn’t want to invest in gold if retirement is right around the corner, because the market could crash, and you will have lost a chunk of your retirement money. If retirement is further away, then you could invest in gold, depending on your tolerance for risk. Over time, the price of gold will rise, but then again, so will the value of mutual funds.

On the other hand, Forbes predicts that gold will be strong throughout 2021 at least. When the economy is otherwise unstable, gold tends to perform well. So, if your portfolio features some gold and some paper assets, that’s a nice balance, since when one falters the other one tends to do better.

Whichever side of the argument you land on, diversifying one’s portfolio is never a bad idea. Gold or other precious metals could have a place in a well-rounded portfolio.

>>MORE: Backdoor Roth IRA: Step-by-step with Vanguard

How Would I Invest in a Gold IRA?

If you’re still interested, you will need to find a company that has self-directed IRA’s or Roth IRA’s and offers gold as one of the investments. Fees can vary by a lot, so make sure you understand what you’ll be paying. You have to pay someone to store the gold for you—you can’t just take it home and put it somewhere. Be very wary of a company that says this is possible, because the IRS says it isn’t. Some other fees include:

>>MORE: Self-Directed Roth IRA: Its Pros and Cons? How Is It Different from Regular Roth IRA?

  • Retirement account set-up
  • Custodian fees
  • Cash-out costs
  • Seller’s fees
  • Storage fees

Another problem with gold as an investment is that it’s not terribly liquid. It might take weeks or months to find a buyer who will purchase the gold. Companies that buy gold tend to want to buy it for less that they think they can sell it for, so you may not make as much as you thought you would.

Since it’s a self-directed Roth IRA, you won’t have anyone making investment recommendations or offering advice—it’s all on you. Keep in mind that all of the rules of a regular Roth IRA apply.

>>MORE: Best Firms to Open a Self-Directed Roth IRA Account

Converting a Roth to a Self-Directed Roth (Gold)

When you find a good self-directed Roth IRA company, you’ll need a broker to buy the gold and a custodian to administer the account. If you already have an IRA or a 401(k), you can roll the funds over into the self-directed account. If you have an IRA or a 401(k), those are tax deferred. When you go to roll the money over into the Roth, you’ll have to pay taxes on it. Once that’s done, the two custodians will transfer the funds to the new account and then you will tell the custodian of the new account what to buy.

Alternatives to Gold IRA’s

There are many EFT’s (Exchange-Traded Funds) that own a small part of a huge amount of gold bullion. You could invest in these EFT’s for less hassle and with fewer fees than you get with a self-directed Roth IRA. You also won’t have to worry about finding a customer to buy the gold when you want to sell, since EFT’s are easy to trade. There’s no minimum investment and no storage fees. It’s a good way to invest in precious metals while avoiding gold’s downsides.

Here are the top 3 gold EFTs with the highest returns in Q3 2020:

  • The GraniteShares Gold Trust – with expense ratio of 0.17% and 12-month return rate of 31.8%
  • SPDR Gold MiniShares Trust – with expense ratio of 0.18% and 12-month return rate of 31.7%
  • The Perth Mint Physical Gold ETF – with expense ratio of 0.18% and 12-month return rate of 31.8%

Last Thoughts

Gold can be a good inflation hedge and a diversified portfolio is always a good idea. People who want to invest in gold should add it to an already solid portfolio and be at least several years away from retirement. There is a certain sense of satisfaction that comes from owning gold bullion.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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