Gold Roth IRA- Is It the Best Investment Option?

Gold Roth IRARoth Ira is an investment option where you will invest in gold mining companies stocks, mutual funds and other assets. There are slight differences between gold Roth IRA and traditional IRA accounts. Unlike traditional IRA accounts where contributions are made tax free and the growth of the IRAs is tax free.
In Roth IRA you will be allowed to make tax free distributions but you will only be allowed to make contributions to the Roth IRA after you have paid taxes.

You will not be allowed to deduct contributions from your Roth IRA basing on your tax return. When you retire the tax distributions made in the Roth IRA will not be taxed. Unlike in traditional IRA where you will be required to make withdrawals during your retirement age, in Roth IRA you will not be required to make withdrawals and you can still contribute to the Roth IRA account even if you are over 70 years of age.

History of Roth IRA

Roth IRAs were initially known as IRA plus, they were named Roth IRA after Senator William Roth. The Roth IRAs were introduced through a Taxpayer Relief Act Of 1997. The Roth IRA are available to wage earners independent of where they work. This is unlike a case of 401(k) and traditional IRAs. There is a restriction on who should open a Roth IRA account, only couples earning less than $191,000 and individual who earn less than $129,000 are eligible to invest in Roth IRA.

Roth IRA rules

The Roth IRA allows people under the age of 50 years to make as low as $5,500 contributions to their Roth IRA accounts annually. Those who are about the age of 50 years can make a contribution of $6,600 to their Roth accounts. Just like any other plans, in Roth IRA you will be fined 10% penalty of early withdrawal and 6% for contributions above the set limit in a year.

Roth IRA funds can be rolled over from one account into another but only once in a period of 365 days. You can also decide to rollover the money that you may have in your Roth IRA to a self-directed Gold IRA. There are also penalties put in place in case you decide to take distributions in cash from your Roth IRA.

Types of investments that a Roth IRA account can have

Individual stocks


Individual bonds for example corporates and governments

Mutual fund shares

Certificates of Deposit (CDs)

Exchange Traded Fund (ETF) shares

Money Market Fund shares

Actually in Roth IRA you will not be allowed to invest in physical gold but in assets associated with gold. For instance, you can buy stocks in gold mining companies, gold ETFs and mining ETFs. This options will only provide you with an association with gold but you will not enjoy the benefit associated with physical gold.

Risks associated with gold stocks (gold Roth IRA)

Regulatory Risk

There mining companies will tend to be subjected to more taxes and regulations of the state in which they are located.

Cost of Production Risk

The mining cost, equipment depreciating, increasing labor costs, rising value of land and mining companies valuation will affect the cost of production greatly.

Management Risk

Mismanagement of mining companies can end up being declared bankrupt where they can close shop completely.

Currency Risk

After you decide to sell your stocks in gold or mutual funds, you will be offered value that will be represented in paper currency. In case the paper currency fails, you will stand a chance of losing your investments.

 Why You Should Have Part of Your Roth IRA Investment in Form of Gold IRA

In gold IRA you will have your value stored in Physical gold. This comes with several benefits as indicated below:

Gold does not fluctuate in value

Let’s take an example of Brexit. The value of British Pound swayed significantly. Even from the American history, there are times when the value of the dollar went down. People lost a lot of value in their investments, but from history gold has been on the rise. It will be a great idea if you will have gold as part of your Roth IRA. If by any chance the value of the dollar will go down, you will have part of your investment which will be on the rise. From history, each time the value of paper currency goes down, the value of gold keeps on increasing.

Peace of mind

If you have a lot of money you have saved over time, then you need to look for an investment which will assure you peace of mind. You will not be stressed because with gold you can sell it anywhere in the world. Even if civilization will come to an end, you can still access market for your gold bars or coins. Gold has been in use for thousands of years and it is still in use.

Gold has real value

Apart from being a sure store of value, you can have items made out of gold and are priced highly. This is a pure proof that gold will still have value no matter what happens.

It is found naturally

No man can command gold to be produced in plenty which can increase its supply hence affect demand. The process of mining gold takes a lot of time. It will start with exploration which will take centuries, preparation of the mine fields; the mining process and the process of purify gold. All these steps take time which makes gold a rare commodity.

Benefits of Roth IRA

There are many benefits you can enjoy after you decide to open Roth IRA. Some of the great benefits investors enjoy after they decide to open Roth IRA accounts include the following:

Tax benefits of Roth IRA

You enjoy tax free compounding savings. You can invest in gold companies or any other shares you find profitable. All the assets you will acquire in your account are not taxed hence you stand a chance of growing your wealth without fear of deductions due to tax.

No age restrictions on your savings

If you are below age 59.5, some investment plans will restrict you on the amount you can save. It is not the case with Roth IRA where you can save any amount irrespective of your age.

Quick access to money during emergency

Other IRA accounts will expose you to penalties if you will withdraw your funds before age 59.5. But with Roth IRA you can access the funds anytime you face an emergency or you will like to invest in your children education.