Gold IRA Vs. Physical Gold

Gold is, without question, a must-have in the investment portfolio of any investor. Its value does not depreciate over time and is not negatively affected by the economy. The pertinent question most investors have to answer is how should they invest.

There is the obvious option of buying physical gold. Having tangible gold is one of the best and most popular ways to own gold. But there is another, lesser-known option; gold IRA.

Gold IRA is an individual retirement account with gold as the investment vehicle. They are less common, but they still offer all the advantages of gold ownership.

Now that we have two options, we are faced with another question; which of the two options is better? Should you buy physical gold or invest in a gold IRA?

The answer is more complicated than we might like. It depends on your budget and your tolerance for risk.

This article will look at these two options side by side to see which would better suit your needs.

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What Is A Gold IRA?

We cannot talk about gold IRA without defining IRA. IRA stands for Individual Retirement Account. It allows you to plan for your retirement in a way that offers you a tax advantage. You can hold stocks and cash in your IRA.

A gold IRA is an IRA where you can hold physical gold. According to the IRS, you can hold gold bars, bullion coins, certificates, and other alternatives in your gold IRA.

Here are a few things to know about investing in a gold IRA:

  • You must have a custodian. When you invest in a gold IRA, you do not have access to physical gold. Your custodian serves as a bridge between you and your investments.
    They are responsible for disbursements, compliance issues, and other concerts you might have.
  • Your gold IRA is self-directed, which means you have to manage your account. Although you have a designated trustee to manage your account, they cannot offer you financial advice of any form.
  • Your gold IRA can also hold other assets apart from gold. You can hold other precious metals in your gold IRA.
  • You enjoy tax benefits. You get tax deductions for all your investments and can defer your tax until you want to sell your assets.
  • Gold IRAs come with contribution limits and fees. The fees for a gold IRA are higher than the standard IRA because gold is a tangible asset.

How Do You Invest In A Gold IRA?

Having your own gold IRA can be achieved in several simple steps. The first thing to do is find the right gold IRA company to work with.

You need to be careful because not all IRA companies offer gold accounts. A reputable company will handle the account opening, purchase your metals, and store them in a safe depository.

Gold IRA companies also provide you with a custodian who will handle all necessary paperwork during the duration of your retirement account. If you pick the right gold IRA company, you will save a lot of stress.

What Is Physical Gold?

Physical gold is the most common way to invest in gold. You buy and hold your gold assets. Physical gold comes in many forms, each offering gold’s intrinsic value.

Buying physical gold gives you versatility. You can store your gold or wear it as jewelry while retaining its value as an investment asset. However, you should know a few things before buying physical gold.

  • You have control over your investments. The responsibility of purchase, storage, security, and insurance falls solely on you.
  • The price of gold fluctuates, and profit isn’t always guaranteed.
  • You should know where to buy from and the best place to sell if the need arises.
  • Understand how tax works in relation to gold. The IRS considers gold in any form as a collectible and taxes it as such.

How Do You Invest In Physical Gold?

The best way to invest in physical gold is to buy gold bullion. If you have enough money, seek a trustworthy dealer and buy from them.

You can buy gold coins or bars. Gold bars offer all the benefits of gold at the lowest premium possible. It is also easier to sell, and you will get the most profit.

Another option open to anyone who wants to invest in physical gold is a gold ETF. ETF stands for exchange-traded fund. Buying into an ETF is like buying shares of a particular amount of physical gold.

An ETF allows you to own physical gold without the stress of storage issues. You do not have to pay for storage or insurance, and you do not have to worry about security.

So Which One Should You Invest?

Which of these two options should you invest? Is one better than the other? We can’t objectively tell you that one option is better than the other. People who want to buy gold all face different situations and have different needs.

The option they choose will be based on which one meets their needs or is best for the situation they find themselves in. To help you make a decision, we will look at the pros and cons of each option and, in the end, tell you the option most fit for you.


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Pros And Cons Of Gold IRA


  • Tax Benefits: This is probably the most sought-after advantage of a gold IRA. They come with all the tax benefits of a standard IRA. Your investments can accrue gains without incurring tax until you decide to withdraw or sell.
  • A Different Kind Of Flexibility: With gold IRA, you might not get the exact flexibility that comes with physical gold, but it does offer its flexibility.
    With your gold IRA, you can invest in other metals asides from gold. You can also include other alternative investment options in your portfolio.
  • Custodians Handle Everything: A custodian takes charge of your account when you invest in a gold IRA. They will buy and hold the gold. Custodians also come with insurance which means your investment is secure.
    A custodian will also handle all necessary paperwork, and when you decide to disburse your assets, they will take care of that too.


  • You Do Not Have Physical Access: When you invest in an IRA, your gold is securely stored, but you do not have direct physical access to your gold, except you decide to disburse your assets.
    Gold IRA is not a good idea for people who want to have their gold within reach in an emergency.
  • Fees: When buying into a gold IRA, you are required to pay certain fees. You need to pay custodian storage fees and other fees that come with the IRA account. These fees will take a bite from any profit you make.
  • Regulations: Investing in a gold IRA means you have to follow all the rules and regulations set by the IRS concerning IRAs. This can be stressful, and the repercussions of breaking them might be too much.

Pros And Cons Of Physical Gold


  • You Have Immediate Access To Your Assets: The most appealing advantage of owning physical gold is you have immediate access to it. Physical gold is tangible, so they are delivered to you when you buy them. You can decide to store them in a vault or in that false bottom in your wardrobe.
    This instant access also means you can use your gold whenever and wherever you want. Do you want to bequeath it to your family members? Or gift it to a friend? All these are easily achievable with physical gold.
  • Complete Control Over Your Assets: Another advantage of buying physical gold is the complete control it gives you. Gold IRA gives you some control, but nothing gives you freedom than owning your Gold bullion.
    It offers you privacy because you do not have to deal with a custodian or consult any third party before you make any decision. Your gold is, literally, yours to do with as you please.
    Any regulations on timing do not restrict you, nor do you have to pay for liquidating before time. You can sell your gold whenever you want.
  • You Do Not Pay As Many Fees: You must pay for handling and shipping when you buy physical gold, but that is all you must pay for. There are no related fees like the ones that come with gold IRA. However, depending on the amount, you might have to pay for storage and insurance.
  • Physical Gold Is Portable: Physical gold comes in three major forms: jewelry, coins, and bars. No matter the option you choose, you still get maximum portability.
    Because they come in small portable sizes, you can easily store and move them. This portability also means you can carry your gold anywhere without anyone knowing. Some gold bars even come in sizes you can store in your wallet, like an ATM card.
  • You Get More Options: Physical gold comes in different forms. You can wear your investments when you buy jewelry, enjoy the historical and intrinsic value of gold coins, or take advantage of the efficiency of gold bars.
    Another important advantage this flexibility offers you is control over pricing options. This is not something you get with your gold IRA.


  • Comes With Risk: When you buy physical gold, you incur certain risks. Physical gold can be stolen, lost, or damaged.
    Theft is a constant fear of people who own physical gold, which is why they invest a lot of money on storage options. However, the risk is still there; if your physical gold is stolen, you are left to shoulder the responsibility alone.
    You could also lose your gold in a single freak accident or natural disaster. A fire, tornado, or accident might be all it takes to make your investments disappear.
  • Purchasing Authentic Physical Gold Is Difficult: Gold is expensive, so imagine spending that money and realizing that someone has made a dupe out of you by selling inauthentic goods to you.
    If you are not a seasoned buyer, purchasing gold comes with the risk of buying counterfeits. To avoid this, look for trustworthy and reputable vendors. Do not just buy from anyone.
  • The Responsibility Of Storage and Security Falls On You: When you buy physical gold, it is up to you to find how to store it and ensure its safety. It is also left to you to offer some kind of insurance. In the case of theft or damage without insurance, you will lose all your investments.
  • Liquidating Is Not As Easy: When you buy physical gold, you take control of your investments. But because your assets are not part of a controlled environment, it will be difficult to liquidate when needed. You will have to look for buyers and negotiate the price yourself.
  • Fewer Fees But No Tax Benefits: Gold IRA comes with tax benefits but buying physical gold does not. All profits from selling your physical gold are capital gains, and the corresponding tax will be paid.
    Although buying physical gold comes with fewer fees, if you decide to sell a bulk of your physical gold, you might have to pay tax than the fees you would incur with gold IRA.


Are you still wondering whether you should buy physical gold or invest in an IRA? The best option for you is the one that meets your needs.

A gold IRA might be the best option if you want to take advantage of tax benefits or plan on including other investment options. Gold IRAs are also great for a long-term secure investment.

However, buying physical gold will be best for anyone who wants complete control and independence over your asset. It is also a great way to avoid the fees of hiring an IRA custodian.

Whichever option you choose still gives you all the benefits of gold investments.

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