A Brief Intro to Roth Gold IRA and Recommended Service Providers
Gold has existed as an investment vehicle for decades if not centuries. It has continued to hold charm, not just due to its looks but also for its investment potential. When markets tumble, gold is often the savior as gold prices generally go up or move in the opposite direction, serving as a safety net against all things gone wrong in the stock market. Market volatility concerns have prompted many investors to add gold to their retirement portfolio.
Physical gold can be owned independently, on paper, or through IRA (individual retirement account) arrangements. Some like owning gold in the metal, which explains the popularity of gold bullion coins and bars. Others like digital gold as they’re only concerned about exposing their investments to gold prices. Owning gold or other physical precious metals entails security challenges and storage costs. Paper gold doesn’t have those issues. But it also amounts to actual ownership of gold. For some investors, that can be a bummer.
Those who want to own physical gold but do not want to deal with its storage and safety aspects invariably swerve toward a gold IRA. A self-directed gold IRA is an amalgam of all things good about physical and paper gold. Gold IRAs are relatively broad concepts. This article intends to focus only on Roth gold IRAs. The topics of discussion include:
- A brief intro to Roth gold IRAs and gold IRAs
- Setting up a Roth gold IRA
- The best Roth gold IRA firms
- Things to consider when choosing a Roth gold IRA firm and more
If you are considering investing in a gold Roth IRA, want to learn more about the arrangement, and associate with the right service provider, keep reading.
Table of Contents
What is a Roth Gold IRA? How Does It Work?
A Roth gold IRA is a precious metals or self-directed IRA with a “Roth IRA” twist. A Roth IRA is an individual retirement account with contributions made with post-tax money, or you pay taxes before depositing money into the gold IRA account. The investment grows tax-free, meaning no taxes apply at withdrawal time.
So, how does a gold Roth IRA work? It works similarly to a regular Roth IRA but accepts physical or real gold-related assets, including gold coins, bars, gold ETFs (exchange-traded funds), and gold mining company stocks. Other tangible assets such as antiques, collectibles, arts, and also real estate (for example, REITs) are permissible under a Roth gold IRA.
A Roth gold IRA is the same as a traditional gold IRA except for the tax deduction timing and other things. The gold quality requirements, contribution limits, distributions, penalties, etc., are identical. The annual contributions are usually between $6,000 and $6,500. That, however, can vary based on the account holder’s age and the financial year.
Read more: Gold IRA Depositories
What is a Gold IRA?
A gold IRA is a specialized IRA that lets investors hold gold in a retirement account. Regular IRAs let investors have traditional investments such as stocks and mutual funds in the retirement account. Gold is not allowed, which is why discrete gold IRA services exist. The thought of employing gold, silver, platinum, and palladium as securities for an IRA was birthed in 1997. Also called precious metals IRAs, gold IRAs can be traditional or Roth. Traditional IRAs take pretax funds, and Roth IRAs accept post-tax money, as mentioned above.
Initially, there was scant demand for a gold or silver IRA among investors, and only those willing to go through the setup hoops pursued. The investor had to scout for a custodian, trustee, depository, and dealer. Investors can now only pick the custodian if they choose to. The IRA custodian will set the investor up with the other stakeholders, making it critical to choose a reputable gold IRA company (more on that later).
Setting Up a Roth Gold IRA
Setting up a gold IRA requires choosing a service provider or gold IRA custodian (brokerage firms, banks, credit unions, trust companies, etc.), a precious metals dealer, and a depository to store the invested gold. The three service providers work harmoniously to help purchase, store, and secure gold on your behalf. Although the custodian can help you choose the metals dealer and storage place using their connections or already established business relationships, you make the call ultimately.
The self-directed IRA custodian manages the specialty account (handling documentation, reporting to the IRS (Internal Revenue Service) about taxes relating to your gold IRA, etc.). State and/or federal agencies approve them to offer asset custodial services to financial advisors and individual investors. To learn more about gold IRAs, feel to browse our site and check the various articles. Here is one to get you started.
Note that traditional and Roth gold IRAs aren’t the only types of gold IRAs. There’s one more type: SEP Gold IRA. A SEP (simplified employee pension) gold IRA, like regular SEP IRAs, is a retirement savings provision available to self-employed individuals or small business employees. Investors are taxed on the withdrawn retirement funds alone, unlike a Roth gold IRA.
Differences Between a Roth Gold IRA and Traditional IRA
While the two gold IRAs have some commonalities, there are quite a few differences besides when the dollars get taxed.
- Income: Standard gold IRAs have no income requirements. Anyone employed with a salary can set up and contribute to the account. For a gold Roth IRA, however, an individual’s income shouldn’t be lower than $153,000 or $228,000 for jointly filing married couples. If you’re married and filing individually, your limit will be $218,000. Why the income limit? It could help individuals with low-to-moderate incomes benefit from tax-free withdrawals more.
- Penalty-free withdrawals: A Roth gold IRA allows penalty-free, tax-free, and anytime withdrawals. On the other hand, a traditional self-directed IRA mandates withdrawals only after the account holder becomes 59.5 years old. Withdrawals before that will attract a 10% penalty and taxes.
- Anytime distribution: Unlike a standard gold IRA, gold Roth IRAs don’t require the account holder to become 73 years old before taking out distributions. A Roth gold IRA account holder can draw their contributions for any reason, at any time, without worrying about penalties or taxes.
Best Roth Gold IRA Firms
There’s no dearth of gold IRA companies that can help you set up gold Roth IRAs. But the experiences they provide won’t be the same. It’s, therefore, critical or in your best interest to pick the best gold IRA company or one that suits your requirements to a T. The following are your options (in no particular order).
Augusta Precious Metals
Augusta Precious Metals is a gold IRA firm known for its transparent and competitive pricing. It has been in the precious metals business for over a decade (since 2012). Their customers know the exact sum they pay and the purpose beforehand. There are no unpleasant surprises later. Several gold IRA firms brag about low costs, but only a few publicize their fee structure. Augusta Precious Metals doesn’t make its future clients toil by offering pricing details online.
Besides transparency and integrity, Augusta offers guaranteed fair prices and one-week price protection for new customers. It has a solid buy-back program with zero request refusals to date. The company also reveals its margins on precious metal sales, which is refreshingly honest. Most gold IRA firms hesitate to make known their profits, understandably so. Do read our complete review here for details about the company’s fees (annual, storage, setup, etc.) and more.
Noble Gold Investments
Set up in 2016, Noble Gold is relatively new to the gold IRA space. But it still makes it on our list due to its minimal investment requirement, making it ideal for smaller investors. The extensive educational resources it provides provide much-needed guidance and clarity to new investors. Within a short span, Noble Gold Investments has knocked doors of popular and credible consumer rating agencies, such as BBB and Consumer Affairs.
Besides the learning resources, Noble Gold also does a preliminary consultation with each potential client to understand their requirements, goals, preferences, etc. After the customer agrees to get on board, they are allocated a reliable advisor who informs and guides them about the next steps, not resorting to upselling or other sales tactics. Noble Gold doesn’t charge its new customers a setup fee. But it bills every account a flat $80 and $150 yearly service and storage fees, respectively. To learn more, read our complete Noble Gold review here.
Birch Gold Group
Birch Gold Group is a Burbank, California-based precious metals dealer. It specializes in helping its clients convert their current regular IRAs and 401(k) plans into a gold IRA account. Founded in 2003, the company is known for its industry expertise, personalized service, and authenticity. The establishment is quite transparent with its fees for opening and administrating a gold IRA. There’s nothing hidden or surprise-inducing.
Since opening a gold or precious metals IRA can be scary for first-time users, the company assigns an expert to its clients to help them through the process. The expert, for instance, will help ascertain whether you should transfer an existing traditional IRA or roll over a former employer-sponsored 401(k). Like other gold IRA firms on the list, Birch has also associated with Brink’s Global Services and Delaware Depository to store the precious metals of its clients. To learn more about the business, click here.
American Hartford Gold
American Hartford Gold is among the most highly rated gold IRA companies. It helps you purchase real gold and silver, create a precious metals IRA, perform IRA rollovers, etc. The firm has been in business since 2012 and has delivered over $1.5 billion in precious metals (especially gold and silver investments). The company’s management and administration team boasts decades of experience in the retail precious metals space. The company is known for its customer support and competitive prices.
The gold IRA setup with American Hartford is smooth and brief. The company offers a free guide about precious metal IRAs. It also provides regular gold market news updates, gold and silver price charts, fact sheets, etc., to help existing and future investors stay in the loop. The same commitment reflects in the company’s customer service. In addition to providing online resources (informational articles, a thorough FAQs section, etc.), American Hartford has a support team dedicated to offering all the support its clients require. To learn more about the company, read our full review.
Goldco’s strong suit is its customer support. It leaves no stone unturned to ensure its existing IRA account holders and future clients get all the information required to make informed decisions. Goldco was founded in 2006. The Los Angeles, California-based firm specializes in asset and wealth protection for precious metals (such as gold and silver). Goldco intends to and takes pride in presenting organized and objective investment information to its customers.
Goldco accompanies its clients from the account setup stage to their recent transactions. Customers can directly access a specialist for guidance at every step. The company also provides extensive educational resources on its website that primarily discusses current events and gold ownership. Goldco’s website, however, lacks vital information, such as the various fees. That’s symbolic of the industry pattern or gold IRA companies’ non-willingness to divulge important data in general. Read our review here to learn about the company’s fees, custodians, account minimums, storage, etc.
Oxford Gold Group
The Oxford Gold Group is a California-based precious metals investment company offering self-directed IRAs. The business is primarily a precious metals dealer that helps set up a gold IRA account and other precious metal retirement accounts. It can assist with creating a new IRA account or rolling over an eligible 401(k) or existing IRA to a gold IRA. The company employs Brink’s Global Services and Delaware Depository to store IRA precious metals.
Like every other reputed gold IRA firm, Oxford Gold Group helps set up a precious metals IRA, free guide and educational resources to its clients, etc. The company charges a $175 yearly fee for accounts worth less than $100,000. For IRAs valued above $100,000, it sets a $225 annual fee. There are no percentage fees. Read our full review to learn more about your expenses and other aspects of OGG.
Advantage Gold is arguably the best option if it’s your first time investing in a gold IRA (Roth or otherwise). Its low investment requirement, vast educational resources, low-cost fee structure, hands-on customer support, etc., are a few hallmarks. Advantage Gold deals with gold IRA arrangements and recommends Strata Trust Company for custodian services. The company was founded in 2014 and has continually strived to create a reputation for superior customer service. Its highly trained staff and the management team’s collective experience are differentiating factors.
Advantage Gold’s true highlight feature is its asset comparison tool. It shows how various investment sums performed during different periods, comparing gold, oil, a savings account, S&P 500, Dow Jones, NASDAQ, etc. The company’s buy-back program is quite liberal, reportedly providing repurchases at existing market rates, greater than competitors' prices. All transactions come with a 24-hour cancellation provision in case there’s a discrepancy in cited figures or other concerns. Advantage Gold works with Delaware Depository and Brink’s Global Services to meet its clients’ storage requirements. To learn more about the business, check out our review.
Things to Consider When Choosing a Roth Gold IRA Company
The right Roth gold IRA company is the one that’s transparent, flexible, and responsive. The gold IRA firm you pick must let you choose the custodian of your choice if it doesn’t provide its own services. It must have at least a couple of options to share. Do not entertain hidden fees, which could inflate your annual or account maintenance costs. Check the company’s prices and compare. It might entail some work but shall be worth it in the end.
Perhaps the most important quality is the company’s integrity and reputation. If you don’t trust the firm or are unsure, the above attributes fizzle away. Trust is paramount if you hand over the responsibility of storing and managing your physical gold possessions to a third party. Luckily, there are different ways to determine a company's credibility online. A Better Business Bureau (BBB) rating is one key parameter. A five-star or A+ rating must always be given priority. Checking out the company’s official website, reviews of past customers, social media following, etc., are key indicators of credibility.
Is a Roth Gold IRA Worth It?
How valuable Roth gold IRAs are over traditional gold IRAs depends on multiple things. If you expect your retirement income to be lower, go with the traditional arrangement since you’ll be taxed less when your income is lower. If it’s the other way around, choose a Roth IRA. Besides future and current tax brackets, early withdrawal possibilities and required minimum distributions (RMDs) are other things to consider. A Roth gold IRA has substantial estate planning advantages too. In other words, since Roth gold IRA owners are not subjected to RMD requirements or can grow the assets tax-free for long, the inheritance can be passed on to the next generation in the family or other loved ones.
Read more: IRA Approved Gold
Few investment vehicles or assets are low-risk propositions—gold is one of them. It doesn’t matter the form or type of investment, gold is always a safe bet. Indeed, gold is not the growth driver of any investment or retirement portfolio. But it provides the vital safety net your other, more volatile assets require during inflation or other economic irregularities.
Although gold investments are a good hedge, whether real or on paper, physical gold offers the maximum reassurance. And when you own the gold through an IRA arrangement, your retirement period is all the more secure.
But investing in gold through a traditional or Roth IRA is not as straightforward as standard IRAs since there are multiple pieces to the puzzle. Therefore, engage with the right stakeholders to rest assured of your investment and see them grow long-term. If you don’t want to research, pick any of the abovementioned companies. But as always, investments are subject to market risks. Talk to your financial advisor before making a gold purchase for Roth IRA investing reasons.
Does a Roth gold IRA allow other precious metals?
A Roth gold IRA permits other precious metal assets, even though the name implies a sole focus on gold. As mentioned earlier, Roth gold IRA is also called a “precious metals IRA,” meaning you can add silver, platinum, and palladium to the account as investments. Real estate, valuable art, collectibles, etc., can also be part of a gold Roth IRA.
What are Roth gold IRA costs?
A Roth gold IRA’s primary cost elements are an account setup fee (one-time; $50 to $150), a custodial or administrative fee (annual; $50 to $150), a storage fee (annual; $50 to $300), and an assets management fee (percentage-based). Note that the given ranges are estimates. Your costs could be lower or greater. Also, you’ll have to pay those fees separately to the various stakeholders and not a single entity. To be crystal clear about the costs, read through the gold Roth IRA guidelines carefully before setting up a gold Roth account or doing a gold IRA rollover.
Should you buy gold coins or gold bars for a Roth gold IRA?
The IRS allows gold bullion coins and bars, provided they meet the minimum fineness and other requirements. If you want to buy bullion gold in smaller sizes, opt for sovereign currencies such as the Canadian Maple Leaf and American Eagle gold. They are more recognizable than small bullion bars and, therefore, easier to trade. Bullion bars are better suited for large-size gold items. You may also add silver coins or platinum coins to your gold Roth IRAs.
Are gold IRA companies reliable?
If you pick a Roth gold IRA firm after much deliberation and checking its history and reputation, you shouldn’t have trust issues. The firms discussed above are among some of the best gold IRA companies and fully trustworthy. Things become dicey when you opt for a relatively obscure self-directed IRA account service provider, which has no pedigree or zero ratings from trusted review agencies, maybe in the lure of low costs or multiple freebies.