How to Buy American Gold Eagles for Your IRA

A number of gold coins are popular among investors and collectors. The American Gold Eagle, however, is one of the few that is approved by law for use with individual retirement accounts and is the only one allowed that is under 99.5 percent pure. This is due to the Gold Eagle being the only gold coin whose weight, content and purity is guaranteed by the U.S. government. Adding Gold Eagles to your IRA can help you to diversify your retirement investments in case of future stock market turmoil.

Step 1

Contact your IRA custodian and inform him that you would like to add gold to your IRA. If your current custodian has little experience with gold-based IRAs or doesn't offer precious metals investment, you will need to open a gold-based account with a different custodian.

Step 2

Fill out an application to create a gold-silver IRA or to add precious metals investment to your current IRA if allowed. Though the specifics of the application may differ depending on your custodian, at minimum it will contain identifying information, beneficiary information, rollover information to move funds from your current IRA and authorization to invest in precious metals.

Step 3

Inform the custodian of your gold account that you wish to buy American Gold Eagle coins for your IRA. You may also specify other precious metals investments if desired to diversify your metals holdings.

Step 4

Make contributions to your IRA and your gold-silver IRA, taking care not to exceed Internal Revenue Service limits for IRA contributions. The contribution limit is the total amount that you can contribute to IRAs during a year without penalty, not the amount that you can contribute to each IRA account.

Step 5

Request your custodian to sell your Gold Eagles and other precious metals investments upon reaching retirement age, or ask for the coins to be delivered to you. There may be a delay in receiving the coins or any funds from their sale, as the custodian does not keep the coins himself; by law, precious metals investments must be held by an IRS-approved depository service.

Tips

  • When investing in collectibles, the IRS typically views you as having received a distribution in the year that the collectible item was purchased and may charge you a 10 percent early distribution fee depending on the type of IRA you hold. American Gold Eagles are exempt from this early distribution fee, as are Silver Eagles and certain other precious metal bullions.

Warnings

  • As with all investments, there is risk involved in purchasing precious metals for your IRA.
  • American Eagle coins and other precious metals produce no dividends or interest of their own. The value of your coins when retiring will depend on the price of gold and the amount that you or your custodian can sell the coins for.
  • You must pay administrative fees and storage fees for your coins each year they are included in your IRA, so to make a profit on your investment the sale price needs to be higher than the original cost of the coins plus the amount paid in various charges and taxes.

Photo Credits

  • Peter Macdiarmid/Getty Images News/Getty Images

About the Author

Born in West Virginia, Jack Gerard now lives in Kentucky. A writer and editor with more than 10 years of experience, he has written both articles and poetry for publication in magazines and online. A former nationally ranked sport fencer, Gerard also spent several years as a fencing coach and trainer.

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