What is a Gold IRA?

So you’re thinking of starting up a retirement fund, and you’re not sure what you should use. Two of your main options are a traditional IRA account and a gold IRA account. What are the differences and similarities, and which one should you choose?

In reality, they’re both very similar. When you have a standard IRA account, currency is just put aside and stored in this account. It’s typically paper currency; if you emptied out the account, you’d get bills, which can then be spent or put into the bank. The account earns interest over time, and more cash is added to it as it is earned.

A gold IRA is the same, but the paper currency is swapped out for gold bars or goal coins. The value is still declared in dollars and cents, as with a standard IRA, but no cash is kept on hand. In order to get money out of the account, you have to sell the gold. You can do this remotely so that you are given cash, but you’re still selling gold at the going rate. You can also ask to take the gold itself out, if you would rather have the physical metal, though most people never actually see the gold, which is kept in a safe on their behalf.

You can use either account, but the advantage of a gold IRA is that the price of gold moves differently than cash. As the value of gold on the open market goes up, your account could increase in value even faster than the interest you’re earning on it; each bar and coin simply becomes worth more than when you bought it. Additionally, you can get around some of the drawbacks of inflation that will definitely impact the value of cash over the years.

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