Gold IRA basics: What it is, how it works and who it's for

Gold IRAs let you hold precious metals in a tax-advantaged retirement account, but they won't benefit everyone. Sponsored MoneyWatch: Managing Your Money Gold IRA basics: What it is, how it works and who it's for We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications. Read Full Bio Angelica Leicht March 5, 2026 / 5:04 PM EST / CBS News Add CBS News on Google Before you move a single dollar, it's worth slowing down and getting the full picture of what a gold IRA really is. Nora Carol Photography/Getty Images Gold has spent the better part of the past couple of years rewriting what investors thought they knew about precious metals. With gold prices now hovering above $5,100 per ounce — roughly double where they were just 12 months ago — the metal is no longer considered a niche asset, and investors across the spectrum are now loading up on gold bullion. Everyday retirement savers are paying close attention, too, as many are wondering whether gold has earned a place in their long-term financial plans.That question has pushed one particular vehicle into the spotlight: the gold individual retirement account (IRA). The idea of a gold IRA sounds straightforward enough on the surface — it's a retirement account that holds gold — but the mechanics, rules and costs are meaningfully different from anything you'll find in a standard 401(k) or traditional IRA. And, getting into one without understanding how it really works can lead to unexpected tax bills, hefty fees and a lot of frustration.So before you move a single dollar, it's worth slowing down and getting the full picture on what a gold IRA is, how it really works and who may benefit from opening one. What is a gold IRA and how does it work?A gold IRA is a self-directed individual retirement account that allows you to hold IRS-approved physical gold and other precious metals — including silver, platinum and palladium — rather than being limited to just the stocks, bonds and mutual funds you'd find in a typical retirement account. The "self-directed" part is key. These accounts give you control over what you invest in, but that also means more responsibility falls on you to understand the rules.To open one, you'll work with a specialized gold custodian, which is essentially a financial institution approved by the Internal Revenue Service (IRS) to administer self-directed IRAs. You can fund the account through a rollover from an existing 401(k) or IRA, a transfer or fresh annual contributions subject to standard IRA limits. Once the account is funded, you direct the gold custodian to purchase IRS-approved metals on your behalf. Not all gold qualifies, though. The IRS requires a minimum purity of 99.5% for gold bars and coins. Here's where things get distinctly different from a traditional IRA, though. The physical metal you purchase cannot be stored in your home or a personal safe. It must be held at an IRS-approved depository, which adds ongoing storage fees to the cost of maintaining the account. Those fees can add up, too. Between custodian fees, storage fees and the markup dealers charge on physical metal, gold IRAs tend to carry higher annual costs than conventional retirement accounts. That's not a dealbreaker for most people, but it's a cost-benefit consideration that deserves honest scrutiny before you commit.The tax treatment mirrors whichever IRA structure you choose. A traditional gold IRA offers tax-deferred growth, meaning you pay taxes on withdrawals in retirement. A Roth gold IRA uses after-tax contributions, but qualified withdrawals are tax-free. Required minimum distributions and early withdrawal penalties follow the same rules that govern conventional IRAs.Who should consider a gold IRA?Gold IRAs tend to make the most sense for a specific type of investor. If you're already contributing the maximum to conventional retirement accounts and want additional diversification with a non-correlated asset, a gold IRA can serve that purpose. Gold has historically moved independently of stocks and bonds, after all, which is part of its appeal as a hedge during periods of economic turbulence or elevated inflation. Investors who are particularly concerned about currency debasement or geopolitical instability — both of which have driven gold's price run in recent years — may also find the physical gold component meaningful. There's a psychological dimension to holding a tangible asset that digital holdings don't provide for everyone.That said, gold IRAs are generally not the right fit for investors early in their careers who need aggressive growth to build wealth over decades. Physical gold doesn't pay divi