Gold IRA vs. Physical Gold: Which Is Best for You?

January 25, 2023

Are you stuck trying to decide whether a gold IRA or physical gold is the better investment vehicle? Both options lead to gold ownership and add crucial diversification to a financial portfolio, but there are some important differences you should know about before you proceed. 

There’s no right or wrong decision — it all comes down to your personal preferences and financial goals. Let’s take a deep dive into both approaches so you can feel confident moving forward with your decision. As always, if you have any questions, our friendly precious metals experts are just a phone call away.

Start by Analyzing the Benefits of Gold Ownership

In order to accurately weigh the benefits of gold IRA vs. physical gold, you need to be well-versed in the various reasons gold is such an attractive investment. That way, you can determine which aspects of the precious metal make the most sense for your situation. 

For example, Person A buys gold to stabilize a financial portfolio during periods of economic downturn, while Person B uses gold as a nest egg they can return to later in life when it’s time to retire. Person A would typically choose physical gold, while person B may find that a gold IRA makes more sense. 

Consider the following factors when choosing between a gold IRA vs. physical gold:

Stability and Reliability

Whether you choose a gold IRA or physical gold, you’ll enjoy gold’s unwavering dependability. However, you’ll want to consider how gold performs so you can choose the ideal format for your short-term and long-term financial goals. 

Simply put, time has shown that gold is a historically safe investment. A century ago, one ounce of gold would purchase a high-end suit for around $20. Today, one ounce of gold will still purchase a high-end men’s suit. In contrast, you’d be lucky if that $20 bought a decent pair of socks. When fiat currency and other non-tangible investments falter, gold remains strong.

As you choose between gold IRA vs. physical gold, you might want to do some speculating. Of course, it’s impossible to predict the future, but your outlook can help to inform your investment. For example, if you foresee stormy economic weather in the near future, you might want to buy physical gold to stabilize your portfolio. Or, if you don’t trust the dollar to maintain its long-term value, opening a gold IRA could be a great way to live well in your golden years.

True Currency

A variety of gold coins and bars 

Gold has been viewed as the purest form of currency since ancient times. When weighing the pros and cons of gold IRA vs. physical gold, you can compare the differences between a gold IRA and physical gold to fiat money. 

For example, physical gold offers outstanding liquidity — you’ll have no problem selling it if the need should arise. In that sense, you can compare gold bullion bars and coins to cash. On the other hand, a gold IRA is more similar to a savings account. While you can access your holdings if an emergency should come up, there may be fees and a wait.

Regardless of which format appeals to you, owning gold means you own a tangible form of currency with legitimate intrinsic value. When choosing between a gold IRA vs. physical gold, think about how you would store your fiat money based on your financial goals. 

Inflation Hedge

When the cost of living goes up, gold prices tend to follow, while stock prices typically plummet. Simply put, people trust gold as an inflation hedge. They’ve seen how it performs, so it’s a self-fulfilling prophecy in some ways.

Owning gold means that when prices rise, your net worth increases along with them, allowing you to maintain the same standard of life. If all your portfolio is tied up in fiat currency and other non-tangible investments, one rocky economic year can be devastating.

Weigh the Pros/Cons of a Gold IRA vs. Physical Gold

Large gold bullion bars

Now that you have a general understanding of gold’s major benefits, let’s take a look at the upsides and downsides associated with a gold IRA and physical gold.

Investing Convenience: Physical Gold

Buying physical gold is as easy as buying a new pair of shoes. You can shop online, by phone, or in-store, and you simply select your preferred gold products and place your order. 

Storage and Security: Gold IRA

If you prefer to own physical gold, you’ll need to find a secure storage solution. A home safe is usually adequate for most investors. But if you plan to purchase a substantial amount of gold, you may find that choosing a gold IRA is the better choice because your holdings are stored securely in a fortified bank vault.

Product Variance and Collectibility: Physical Gold

For many investors, collecting gold bullion coins and bars (and, in some cases, gold numismatics) is a rewarding hobby. They enjoy hunting pieces from all over the world, building sets, and simply admiring their gold’s beauty. 

A gold IRA requires that you purchase IRA-eligible precious metals. Because they’re stored off-site, you don’t have that same personal connection to your collection. 

Taxes: Gold IRA

Be sure to consider tax implications as you compare gold IRA vs. physical gold. In the United States, physical gold is taxed as a “collectible'' at a 28% long-term capital gains rate. A gold IRA offers the same tax-deferred and tax-deductible benefits as traditional IRAs.

Accessibility and Liquidity: Physical Gold

It’s important to think about whether or not there’s a possibility that you may want to eventually sell all or a portion of your gold IRA or physical gold. With physical gold, you can simply bring your coin or bar to a reputable gold dealer and sell it. With a gold IRA, you may not be able to access your gold immediately in an emergency situation, and there may be fees if you withdraw early.

Which Gold Investment Vehicle Should You Choose?

A man thinking while holding a pen and notebook

Now that we’ve weighed gold IRA vs. physical gold, let’s recap. As you can see, there are quite a few differences between the two options, but there are plenty of similarities too. Here’s a quick look at the differences:

Buy physical gold if you want to:

  • Have a larger variety of product options
  • Buy gold in smaller increments over time
  • Have quick and easy access to liquid assets
  • Maintain full control over your holdings
  • Avoid IRA rules and fees 

Open a gold IRA if you want to:

  • Have peace of mind knowing your holdings are stored in a fortified bank vault
  • Reap the tax-deferred and tax-deducted benefits of a traditional IRA
  • Avoid being taxed at a 28% long-term capital gains rate
  • Hold your gold long-term into retirement

Work With a Tier 1 Precious Metals Dealer

If you have any questions about gold IRA vs. physical gold, please don’t hesitate to contact us. Endeavor Metals is a Tier 1 US Mint bullion dealer. We bring more than 50 years of in-house experience to the table, and our precious metals specialists can help you choose between a gold IRA and physical gold

We take pride in being the precious metals dealer you can trust. Whether you choose a precious metals IRA or physical bullion, working with a reputable dealer is the key to a successful investment. We boast a 4.9 Google star rating and an A+ accredited grade on the Better Business Bureau. Our reviews speak for themselves!

Let’s Get Started

Proceed with absolute confidence, knowing that Endeavor Metals belongs to multiple well-established and trusted organizations, including the Industry Council for Tangible Assets, the American Numismatic Association, the Certified Acceptance Corporation (CAC), and the prestigious Silver Institute. 

Endeavor’s physical products are backed by our 7-day, 100% money-back guarantee, even if the gold market has a downturn.

Now that you’re well-versed in the differences between gold IRA vs. physical gold, it’s time to move forward with your gold IRA or physical gold investment. At the end of the day, as long as you end up owning gold, you’re making a sound decision for your financial future. Diversify into a time-tested store of value today.

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