Gold IRA vs Physical Gold: Which is the Better Option?

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Written by Enoch Omololu
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If you’re looking to invest in gold, you have 3 options:

  • Invest in physical gold through the best gold IRAs
  • Purchase physical gold and hold it in a home safe or a bank’s safe deposit box
  • Buy gold stocks and ETFs

In this post, I delve into gold IRA vs physical gold investment and the pros and cons of gold IRA and physical gold so that you can decide which investment option fits your retirement savings plan.

Gold IRAs

A gold IRA is a self-directed retirement savings account that allows you to invest in physical gold and other precious metals.

An IRS-approved custodian stores your bullion and deals with all the paperwork, transportation, insurance, and tax reporting on your behalf, eliminating the hassles of dealing with physical gold.

Gold IRA’s top features

They can only hold alternative assets

Gold IRAs can only hold gold and other precious metals, including silver, platinum, and palladium. The best gold IRAs can also hold crypto and real estate investments.

A gold IRA cannot hold paper assets like stocks, bonds, and mutual funds that are held in regular IRAs.

They are offered by gold IRA companies

Most conventional brokers that offer standard IRAs don’t offer gold IRAs. These precious metal IRAs are offered by gold IRA companies like Augusta Precious Metals.

They have all the tax benefits of regular IRAS

Depending on how you want your gold IRA to be taxed, you need to weigh carefully between a traditional gold IRA vs a Roth IRA.

A traditional gold IRA offers tax-free contributions, but taxes distributions. A Roth IRA taxes contributions, but offers tax-free distributions.

A gold IRA account must be held with an IRS-approved custodian

A gold IRA must be held through an IRA-approved custodian who stores the bullion on your behalf.

You can’t withdraw or physically take possession of the bullion in your gold IRA to hold or store it at home.

They have high management fees

Gold IRAs come with several fees, including IRA set-up fees, storage fees, custodian fees, broker markup fees, miscellaneous transaction fees, and account cash-out fees.

They’re self-directed

You’re at liberty to choose your investment assets and designate a custodian to manage your account. Your custodian or trustee shouldn’t interfere with your investment choices or offer you any financial advice.

They have contribution limits

A gold IRA has the same contribution limits as regular IRAS: $6000 per year for individuals below 50 and $7,000 for those 50 and above.

Visit Augusta Precious Metals

Physical Gold

Purchasing physical gold directly from a trusted dealer gives you the freedom to physically hold your precious metal and store it in a home safe or bank’s safe deposit box.

Physical gold top features

Exist in many forms

You can buy physical gold in many forms, including collectible gold bars and coins, pure nuggets, bullion, jewelry, etc.


The IRS treats physical gold outside a gold IRA as a collectible, hence subject to capital gain taxes. Short-term gains realized within a year are taxed at regular income rates, while long-term gains are taxed up to 28%.

Reporting requirements

Some types of gold require tax filing, while others require immediate reporting. Thus, it’s upon you to learn the IRS gold reporting rules and adhere to them.

Requires full control and responsibility

Physical gold requires you to take full responsibility to store and hold it securely. You’re also responsible for finding a buyer and paying shipping and handling fees.

Gold IRA vs Physical Gold

Withdrawal restrictions

There’s a 10% penalty if you liquidate gold in your gold IRA before age 59.5, and you must take MRDs at age 70-73. Physical gold doesn’t have such restrictions. You can access your bullion and sell it anytime.

Investment options

IRA gold must meet IRS requirements, and you cannot hold gold collectibles in a gold IRA account. Physical gold can be bought in any form, giving you more options.


Gold IRAs have the tax advantages of regular IRAs and don’t attract capital gain taxes associated with collectible gold. Physical gold doesn’t enjoy any tax benefits. It’s also treated as a collectible, hence subject to IRS capital gain taxes.


IRA gold is held by an insured, IRS-approved custodian. Thus, it’s considered safer and more secure. Physical gold outside an IRA requires you to find your own secure storage and insurance.

Reporting requirements

With a gold IRA, your custodian takes care of all the paperwork and reporting. With physical gold, you’re responsible for learning and adhering to IRS rules, reporting sales, and filing & paying taxes.


A gold IRA investment comes with a set-up fee and several maintenance fees. Physical gold doesn’t have such fees, though investors must pay for shipping and handling expenses.

Pros and Cons of Gold IRAs

Tax benefits: Gold IRAs have the same tax benefits as regular IRAsHigh fees: High account setup and maintenance fees than physical gold and regular IRAs.  
Self-directed: You make your own investment decisions and choose a custodian to manage your account.Restrictions: IRA distribution restrictions and penalties restrict you from selling your gold when you want. Again, the IRS restricts the types of gold you can hold in a gold IRA.  
No capital gain taxes: IRA gold isn’t treated as a collectible. Unlike physical gold, it doesn’t attract capital gain taxes.No possession: You can’t take possession of IRA gold. It must be held with a custodian.  
Easy management: Your custodian takes care of all the paperwork, reporting, and disbursements.Not easily accessible: Due to custodian regulations, you can’t access your metals or liquidate them when you want.
More secure storage: IRA gold is held by an insured, IRA-approved custodian, hence more secure than self-storage. 

Pros and Cons of Physical Gold

Immediate access: Self-storage gives easy, direct access to your bullionNo tax benefits: Physical gold attracts capital gain tax and doesn’t offer IRA tax benefits.  
Fewer fees: Self-storage means you won’t incur account setup and maintenance fees associated with a gold IRA.Hard to manage: You’re responsible for reporting sales, filing taxes, and handling all the paperwork required to hold and store physical gold. You’re also responsible for the secure storage and insurance of your bullion.  
Many investment options: No IRS restrictions, meaning you can buy gold in the form you want.  Selling hassles: You must find a reputable dealer and buyer, and pay shipping and handling costs.
No withdrawal restrictions: You’re not subject to IRA withdrawal timing or penalties. You can access and sell your bullion anytime. 

Who Should Invest in a Gold IRA?

A gold IRA investment is a good fit for you if:

  • You want to enjoy IRA tax benefits
  • Are looking to hold your bullion for the long-term
  • You also want to invest in other precious metals, like silver, palladium, and platinum
  • You’re interested in other alternative investments, like crypto or real estate
  • You’re comfortable paying the high gold IRA fees in exchange for hassle-free management and top security for your bullion.
  • You don’t mind finding a custodian and managing your IRA

Who Should Invest in Physical Gold?

Physical gold may be a great investment option for you if:

  • You want to store your bullion at home or in a safe deposit box
  • You want to have total control and free choice of the types of gold you invest in.
  • You want to avoid IRA contribution and distribution restrictions
  • You want the freedom to access and sell your precious metal when you want
  • You wish to avoid the high fees of gold IRAs.

Augusta Precious Metals and Gold IRAs

Augusta Precious Metals is a top-rated gold IRA company that allows you to invest in gold and silver and has been named the Best Overall Gold IRA Company 2023 by Money Magazine.

Below is what you get when you choose to invest in gold through Augusta Gold IRA:

  • A personal assistant and guide to gold and silver
  • A team of professionals to give you rare economic information
  • IRA processing aid —they complete 95% of the paperwork with you
  • Augusta’s product professionals to assist you build your gold & silver portfolio
  • Transparent pricing —they disclose their margins and management fees
  • 100% money-back guarantee
  • They’ve got an excellent buyback program
  • Reputable custodians, including Delaware Depository and Equity Trust.
  • Get official phone confirmation to finalize your order.
  • Excellent customer support via phone and live chat

Gold IRA vs Gold ETF

A gold IRA is a retirement savings account for holding physical gold and other precious metals that cannot be held on a regular IRA. It’s a great option for individuals looking to make a gold investment while benefiting from long-term tax-advantaged growth.

A gold ETF is an exchange-traded fund that tracks market indexes that invest physical gold or other gold-related funds. It’s a great option if you want the freedom and liquidity to easily move around your investment.

Gold IRA vs Physical Gold: Conclusion

A retirement account held in gold is more likely to preserve its value, helping hedge against inflation and economic uncertainty. You can invest in gold through a gold IRA, or take the more direct way of purchasing and self-storing your bullion.

Each option has its own upsides and downsides. So, make sure to weigh the pros and cons of gold IRA vs physical gold, then choose the investment option that fits your investment goals.

NB: Information presented here should not be taken as financial advice, and you should consult with a competent financial advisor before you jump.

Visit Augusta Precious Metals


Can I hold physical gold in my Gold IRA?

Yes, gold IRAs allow you to hold physical gold through an IRS-approved custodian. You can also hold other precious metals, like silver, platinum, and palladium in your gold IRA.

Which is better: a gold IRA or physical gold?

A gold IRA is better than physical gold if you want to enjoy IRA tax benefits and skip the hassles of managing physical gold yourself. Otherwise, physical gold will work for you if you want total control over your bullion and the freedom to sell when you want.

Should I move my IRA to gold?

Of course, you’re free to move your IRA to gold. But before you make an IRA rollover to gold, make sure you understand the risks of investing in gold and gold IRAs.

Is a gold IRA physical gold?

Yes, a gold IRA holds physical gold. Your gold bars or coins are held with an IRS-approved custodian who is responsible for the safe and secure management of your gold.

Is a gold IRA tax-free?

No, a gold IRA is not tax-free but is taxed following the same tax rules for regular IRAs. A traditional gold IRA taxes withdrawals, while a Roth gold IRA taxes contributions.

Which Gold ETFs hold physical gold?

Several gold ETFs hold physical gold bullion, bars, and coins, including iShares Gold Trust (IAU), SPDR Gold MiniShares Trust ( GLDM), abrdn Physical Gold Shares ETF ( SGOL), etc.

Who holds the gold in a gold IRA?

Gold in a gold IRA is held by an IRS-approved custodian on behalf of the IRA account owner. A custodian may be a bank, a trust company, a credit union, or a brokerage firm tasked with the safe and secure storage of precious metals.


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Gravatar for Enoch Omololu

Enoch Omololu

Enoch Omololu is a personal finance expert who has a passion for helping others win with their finances. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School and has been writing about money management for over a decade. Enoch has been featured in several leading personal finance publications including MSN Money, The Globe and Mail, Wealthsimple, and the Financial Post.

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