A gold IRA, also known as a precious metals IRA, is a type of individual retirement account in which physical gold or other approved precious metals are held in custody for the benefit of the IRA account owner. It functions the same as a regular IRA, but instead of holding paper assets, it holds physical bullion coins or bars. The four precious metals allowed to be held in an individual retirement account are gold, silver, platinum, and palladium, provided they are in the form of IRS-approved coin or bar products. Gold is the most commonly purchased of the four, so the term "gold IRA" is often used as industry slang to mean a retirement account containing any combination of precious metals.

To set up a gold IRA, investors can use pretax or after-tax dollars through a special custodian or broker. The IRS permits self-directed IRA holders to purchase gold, silver, platinum, or palladium bars, coins, or other approved physical forms. These accounts generally carry higher fees than ordinary IRAs since they require purchasing and storing the actual metal. Annual contributions are capped by the IRS.

To comply with IRS requirements, all IRAs, including precious metals IRAs, must leave their assets in possession of a trustee or custodian, not the owners individual possession. Several companies promote gold IRA arrangements. The gold IRA custodian is responsible for holding and managing the physical gold in the account. The cost of a gold IRA can vary, and these accounts often have hidden fees that make it important to research and compare different providers.

Investing in gold for retirement can be a smart way to diversify a portfolio and potentially protect against inflation by having a tangible asset. However, gold is still a volatile asset that can lose value, and gold IRAs generally carry higher fees than traditional IRAs. It is important to understand the risks and benefits of investing in a gold IRA before making a decision.